A contractual dispute arguably involved an arbitration clause. Before the proceedings the Defendant denied the contract.
Held: That assertion was a repudiation of the agreement to arbitrate, and the Claimant issued proceedings in Court. The issue of those proceedings was acceptance of the repudiatory breach with the result that the agreement to arbitrate was at an end. Accordingly the application by the Defendant for a stay failed as the agreement had become inoperable. The Court approved the application of ordinary contractual principles to the agreement to arbitrate.
Potter LJ said: ‘it is of course the position that the existence of an arbitration agreement does not prevent either party from instituting court proceedings in respect of the underlying dispute. That is a principle based upon the rule that the parties may not agree to oust the jurisdiction of the court: see Scott -v- Avery (1856) 5HL Cas 811. However, it is inaccurate to speak of a right to commence proceedings in any more general sense. Whether or not such commencement is a breach of the arbitration agreement by the party instituting the proceedings will depend upon the circumstances. If satisfied that a breach is involved, as it usually will be, then the court will grant a stay. If not so satisfied, but the position is arguable, the court will grant a stay on the basis that the issue raised is not clear and that the arbitrator has the power to rule upon his own jurisdiction (see s.30 of the 1996 Act). However, the fact that a party is in broad terms free to commence proceedings despite the existence of a valid arbitration clause, at the risk of stay being granted, does not mean that, in the circumstances of a particular case and in the light of pre-writ correspondence, such commencement cannot constitute an acceptance of the defendant’s previous refusal to arbitrate, so that the court is satisfied that a stay should not be granted.’
Judges:
Potter LJ, Keene LJ, Sumner LJ
Citations:
[2002] EWCA Civ 721, [2002] 2 All ER (Comm) 545
Links:
Statutes:
Jurisdiction:
England and Wales
Cited by:
Cited – Delta Reclamation Ltd v Premier Waste Management Ltd QBD 24-Oct-2008
The claimant sought a stay of the matter and a consolidated arbitration. The defendant said that the litigation having been started by the claimant it was too late to refer the issues to arbitration.
Held: Correspondence between the parties . .
Lists of cited by and citing cases may be incomplete.
Arbitration
Updated: 20 August 2022; Ref: scu.172234