The parties disputed the coverage agreed under a distribution agreement.
Held: ‘The counterclaim operated as a defence by way of set off. In order to establish that defence the defendant will have to prove the losses pleaded . . . Until the end of the trial it may not be known whether in total those cross claims, if made out, will exceed in value the amount of the claim. If they did, then the court would find the amount proved under the various heads and then, if Mr Eder were right, refer the question of excess to an arbitration. At the arbitration, there would be an issue estoppel and the arbitrators would simply be asked to endorse the Court’s decision as to the excess. That cannot make commercial sense. If the cross claim did not amount to a transactional set-off, then I can quite understand that the Court would be obliged to refer such a claim to arbitration under section 9 of the Act. But the question is how clause 18.3 should be construed and I consider that Mr Dye’s emphasis on the word ‘action’ as apposite to cover both claim and cross claim, which is a partial set-off, makes commercial sense. The courts will, when construing an arbitration agreement seek to give it business sense against the likely background that parties will incline to what might be called a one-stop litigation process.’
Judges:
The Honourable Mr Justice Morison
Citations:
[2004] EWHC 1897 (Comm)
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Glencore Grain Ltd v Agros Trading Co Ltd; Agros Trading Co Ltd v Glencore Grain Ltd CA 1-Jul-1999
Even though a debt under commercial washout agreements between the parties was acknowledged, it was not enforceable in the context of unrelated arbitration awards between the parties. The non-payment of the washout agreement invoices created a . .
Cited – Aectra Refining and Marketing Inc v Exmar NN CA 15-Aug-1994
A time loss claim can found a legal set-off claim against ship owners, provided that the loss claim can be made in the same court. The court referred to a ‘transaction set-off and independent set-off’. Cross-claims must both be due and payable, and . .
Cited – Bim Kemi v Blackburn Chemicals Ltd CA 3-Apr-2001
The question was the degree of connection which must be shown between (1) a claim for unliquidated damages for breach of a contract and (2) a cross-claim for unliquidated damages for breach of a different contract between the same parties, in order . .
Lists of cited by and citing cases may be incomplete.
Agency
Updated: 11 June 2022; Ref: scu.200250