Fiona Trust and Holding Corporation and others v Privalov and others: CA 24 Jan 2007

The court was asked whether when contracts have been induced by bribery and have been rescinded on discovery of the bribery, that constitutes a dispute which can be determined by arbitration in the context of a common form of arbitration clause.
Held: a dispute whether the contract can be set aside or rescinded for alleged bribery does fall within the arbitration clause on its true construction. ‘If arbitrators can decide whether a contract is void for initial illegality, there is no reason why they should not decide whether a contract has been procured by bribery, just as much as they can decide whether a contract has been procured by misrepresentation or non-disclosure. Illegality is a stronger case than bribery which is not the same as non est factum or the sort of mistake which goes to the question whether there was any agreement ever reached. It is not enough to say that the bribery impeaches the whole contract unless there is some special reason for saying that the bribery impeaches the arbitration clause in particular. ‘ and ‘we see no reason why the charterers should be prevented from arbitrating these claims; if the arbitration tribunal decides that the charters were indeed procured by bribery they will be able to decide what consequence that conclusion has on any claims which the charterers might otherwise legitimately have. ‘

Tuckey, Arden and Longmore LJJ
Times 29-Jan-2007, [2007] EWCA Civ 20, [2007] Bus LR 686, [2007] 1 CLC 144, [2007] 2 Lloyd’s Rep 267, [2007] ArbLR 22, [2007] 1 All ER (Comm) 891
England and Wales
CitedHeyman v Darwins Limited HL 1942
An arbitration clause will survive a repudiatory breach: ‘I agree with the Lord Chancellor in thinking that the true ground of the decision in Jureidini v National British and Irish Millers Insurance Co Ltd was the narrowness of the field of . .
CitedMackender v Feldia AG CA 1966
A clause provided that an insurance policy should be governed by Belgian law and that ‘any disputes arising thereunder shall be exclusively subject to Belgian jurisdiction.’ The underwriters avoided the contract for non-disclosure of material facts . .
CitedEmpresa Exportadora de Azucar v Industria Azucarera Nacional S.A, The Playa Larga CA 1983
There had been a theft by Cuban sellers of one cargo of sugar, property in which had already passed to the buyers, and non-delivery of a second combined with trickery whereby the intended buyers were nonetheless induced to pay its price. The first . .
CitedUnion of India v Aaby’s Rederi A/S, The Evje HL 1975
Lord Dilhorne said of the words ‘to be settled in London’: ‘At first sight those words appear to me to mean no more and no less than that the contributions to be made have to be determined in London and paid there, and that implies determined in . .
CitedSamick Lines Co Ltd v Owners of The Antonis P Lemos HL 2-Jan-1985
The House was asked as to the effect of the section.
Held: Since the provisions of the statute under consideration were designed to give domestic effect to an international convention, a broad and liberal construction should be given to them . .
CitedThe Eschersheim; The Jade HL 1976
The 1956 Act implemented as part of the domestic law the treaty obligations of the United Kingdom under the International Convention Relating to the Arrest of Seagoing Ships signed at Brussels on 10 May 1952 (the Arrest Convention).
Held: The . .
CitedFillite (Runcorn) Ltd v Aqua-Lift CA 1989
The court considered whether claims arising from misrepresentation or breach of a collateral contrat were claims arising ‘under’ the contract so as to be governed by the disputes provisions in it.
Held: The disputes did not arise ‘under the . .
CitedThe Ermoupolis 1990
A claim for the tort of conversion fell within the phrase ‘any dispute arising in any way whatsoever out of this bill of lading’. . .
CitedAggeliki Charis Compania Maritima SA v Pagnan SpA The Angelic Grace QBD 1994
The court considered whether a claim for a collision between two ships was governed by an arbitration clause which read ‘all disputes from time to time arising out of this contract shall . . be referred to the arbitrament of two arbitrators carrying . .
CitedHarbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd CA 7-Apr-1993
An action was brought by re-insurers for a declaration that reinsurance policies were void for illegality, and that the plaintiffs were not liable under them. The illegality alleged was that the defendants were not registered or approved to carry on . .
CitedOverseas Union v AA Mutual International Insurance Co Ltd 1988
Evans J said that there was a broad distinction between clauses which referred ‘only those disputes which may arise regarding the rights and obligations which are created by the contract itself’ and those which ‘show an intention to refer some wider . .
CitedEthiopian Oil Fields v Rio del Mar 1990
A dispute about rectification came within the words ‘any dispute arising out of or under this contract’. The phrase ‘out of’ must add something to ‘under’, even though the words ‘out of ‘ were in fact the words which appeared first in the clause. . .
CitedHarbour Assurance Co (Uk) Ltd v Kansa General International Insurance Co Ltd 1993
The Court said that older (pre Heyman v Darwins Ltd) authorities about the width of arbitration clauses had to be approached with some care and that the words ‘arising from the contract’ have almost invariably been treated as ‘words of very wide . .
CitedDelos, Owners of Cargo v Delos Shipping Ltd ComC 31-Jan-2001
Claims for breach of duty and bailment could be brought within the phrase ‘any disputes under’ the contract. . .
CitedChimimport Plc v G d’Alesio SAS 1994
The phrase ‘arising under’ in a clause referring matters to arbitration is narrower than ‘arising out of’ and the court doubted whether a tortious claim could easily give rise to a dispute ‘under the contract’. . .
CitedLogicrose Ltd v Southend United Football Club Ltd CA 5-Feb-1988
The agent required the contractual counterparty to pay a bribe of pounds 70,000 to an offshore account.
Held: The bribe was held to be recoverable by the principal whether the principal rescinded or affirmed the contract because it was a . .
CitedFrancesco Benincasa v Dentalkit Srl ECJ 3-Jul-1997
A contract which forms a part of the customer’s arrangements for pursuing his trade or profession is not a consumer contract and a choice of jurisdiction clause in a distribution agreement was valid.
Europa . .
CitedCredit Suisse First Boston (Europe) Ltd v Seagate Trading Co Ltd 1999
An oral contract for the sale of Russian Notes was followed by a Trade confirmation with an English jurisdiction clause. It was said that this document was fraudulently presented by Credit Suisse as a mere perfunctory confirmation (which it was not) . .
CitedLaw Debenture Trust Corporation Plc v Elektrim Finance Bv and others ChD 1-Jul-2005
A bond contained an arbitration clause subject to a further clause giving the claimant an ‘exclusive right at its option to apply to the courts of England to settle any disputes which may arise out of or in connection with these presents’. The . .
CitedAhmad Al-Naimi (T/a Buildmaster Construction Services) v Islamic Press Agency Incorporated CA 28-Jan-2000
The court has an inherent power to stay proceedings. The court could refer a matter to arbitration where there was an arbitration clause, but could also do so under its inherent discretion, where this was not quite clear, but it was clear that good . .
CitedBirse Construction Limited v St David Limited TCC 12-Feb-1999
There are four approaches to deciding whether an arbitration agreement exists to which section 9 applies:- (1) to determine on the evidence before the court that such an agreement does exist in which case (if the disputes fall within the terms of . .
Appeal fromFiona Trust and Holding Corp and others v Privalov and others ComC 20-Oct-2006
The parties disputed whether their claim should be arbitrated.
Held: A claim as to whether the contract itself had been made was not one which could be arbitrated by provisions in that contract. It does not arise ‘under’ the contract. The . .
See AlsoFiona Trust Holding Corporation and others v Privalov and others ComC 19-Jan-2007
. .

Cited by:
See AlsoFiona Trust and Holding Corp and others v Privalov and others ComC 20-Oct-2006
The parties disputed whether their claim should be arbitrated.
Held: A claim as to whether the contract itself had been made was not one which could be arbitrated by provisions in that contract. It does not arise ‘under’ the contract. The . .
Appeal fromPremium Nafta Products Ltd (20th Defendant) and others v Fili Shipping Company Ltd and others; Fiona Trust and Holding Corporation v Privalov HL 17-Oct-2007
The owners of a ship sought to rescind charters saying that they had been procured by bribery.
Held: A claim to rescind a contract by reason of bribery fell within the scope of an arbitration clause under which the parties had agreed to refer . .
CitedScottish and Newcastle Plc v Raguz HL 29-Oct-2008
The lease had been assigned by the claimant to the defendant and on again to a tenant who became insolvent. The landlord had recovered sums said to be due from the claimant who now sought an indemnity from the defendant. The defendant said that the . .
See AlsoFiona Trust Holding Corp and others v Privalov and others ComC 21-May-2007
Allegations were made of different varieties of fraud. Applications were made for freezing orders. . .
See AlsoFiona Trust and Holding Corporation and others v Privalov and others ComC 22-Jul-2008
. .

Lists of cited by and citing cases may be incomplete.

Contract, Arbitration

Updated: 19 November 2021; Ref: scu.248016