Implied horizontal contract prompts stay of proceedings S9 AA 1996

In Mercato Sports v Everton[1], the English High Court found that two parties were bound by an implied horizontal contract containing an arbitration clause. Accordingly, it granted a stay of proceedings under section 9 of the Arbitration Act 1996 (‘S9 AA 1996’). In this case, a football agent (the Claimant)[2] sought payment for bringing a player to the attention of Everton (the Defendant) and by doing so, it enabled them to sign the player. While Claimant and Defendant had no direct contractual relationship, the Court established that both were bound by the Football Association’s Rules (‘FA Rules’), in particular by the arbitration agreement therein. While the Court emphasized that such arrangements would not always automatically lead to an implied horizontal contract, the parties’ dealings in this case did lead to an implied contractual relationship, governed by the FA Rules.

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HONG KONG COURT OF FIRST INSTANCE STAYS COURT PROCEEDINGS TO ARBITRATION, REITERATES S.20 PRINCIPLES

In Leung Kwok Hung trading as Kaiser (M&E) Decoration Engineering Company v. Johnson Controls Hong Kong Limited [HCCT 56/2017], the Hong Kong Court of First Instance granted the Defendant’s application under s.20 of the Arbitration Ordinance, staying Court proceedings in favour of arbitration. In doing so, Justice Mimmie Chan noted that the principles for granting such a stay were clear and had not been disputed by the parties.

In light of the termination of the parties’ subcontract containing the arbitration clause, the Court reiterated that the arbitration agreement is separable from the underlying contract and confirmed that the matters in dispute between the parties relating to alleged breach, termination of contract and payment fell within the scope of the clause.

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Parallel court and arbitration proceedings: English High Court grapples with further case management issues in Panama Canal dispute, clarifying that service of a defence pending appeal on refusal to grant a stay will not constitute “a step towards answering the substantive claim”

In our previous blog post on Autoridad del Canal de Panama v Sacyr, S.A. & Ors, we considered a failed application to stay English court proceedings brought in a dispute in which related ICC arbitration proceedings are also on foot. In a subsequent judgment, the English Court considered further the practical implications of the parallel proceedings. The Court rejected the Consortium’s application for permission to appeal the decision refusing to grant a stay under s9 of the Arbitration Act 1996 and refused to stay the proceedings pending an application to the Court of Appeal for permission to appeal.  In so doing, the Court held that service of a defence in the proceedings by the Consortium would not constitute a “step […] to answer the substantive claim” within the meaning of s9(3) of the Act which would deprive the Court of Appeal of its jurisdiction to grant a stay on appeal. Consequently, it allowed the proceedings to proceed pending the review by the Court of Appeal of the Consortium’s application for permission to appeal.

Autoridad del Canal de Panama v Sacyr, S.A and Others [2017] EWHC 2337 (Comm) Continue reading

English High Court refuses stay of proceedings despite possible overlap with issues subjected to parallel ICC arbitration proceedings.

A consortium of construction companies (the Consortium) was unsuccessful in obtaining a stay of court proceedings pending before the English High Court (the Court), even though parallel related ICC arbitration proceedings are ongoing. The Court rejected the application for a stay under section 9 of the English Arbitration Act 1996 (s9) on the basis that the proceedings, which concerned advance payment guarantees governed by English law and containing exclusive English jurisdiction clauses, concerned a “matter” outside the scope of the arbitration agreements. The Court found further that there was no compelling case for a stay to be granted under its inherent jurisdiction.

This decision illustrates the practical difficulties, costs and delays, caused when parties agree that disputes related to the same construction project are to be determined in different fora.

Autoridad del Canal de Panama v Sacyr SA and others [2017] EWHC 2228 (Comm) Continue reading

Should I stay or should I go? Singapore High Court declines to stay arbitration pending review of jurisdictional ruling

Overview

In a recent ex tempore judgment in the case of Loblaw Companies Limited v Origin & Co Ltd & Another [2017] SGHC 59 ("Loblaw v Origin"), the Singapore High Court declined to exercise its discretion under s10(9) of the International Arbitration Act ("IAA"), and refused to stay an arbitration pending final determination by the Singapore courts of a separate application by Loblaw to review the Tribunal's finding on its jurisdiction.

In its decision the High Court acknowledged the lack of authority on when and how a court shall exercise its discretion under s10(9) of the IAA, finding that "[u]ltimately, very much depends on the unique facts and circumstances of each case". However, an applicant would generally be required to show "special circumstances" justifying a stay, over and above the (alleged) merits of the jurisdictional objection or the obvious risk of wasted time and costs.

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Singapore Court of Appeal provides guidance on applications to stay proceedings in favour of arbitration and scope of arbitrability

In Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2015] SGCA 57, a distinguished panel of the Singapore Court of Appeal considered an application to stay court proceedings in favour of arbitration under section 6 of the Singapore International Arbitration Act ("IAA"). They confirmed the appropriate standard of review to be adopted in respect of the existence and scope of the arbitration agreement as a prima facie standard.  The Court of Appeal also provided guidance on determining whether the subject matter of a claim is arbitrable or not, holding that minority shareholder claims under s.216 of the Companies Act (Cap 50, 2006) are arbitrable.  Finally, the Court of Appeal demonstrated flexibility in exercising its case management powers to regulate the conduct of court proceedings involving multiple parties, not all of whom are party to the arbitration agreement.

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