Inherent Jurisdiction To Stay Proceedings In Favour Of Foreign Arbitrations - The Decision In A v B

English court proceedings against parties including the

arbitrator, B were commenced by A alleging he was induced to

enter the arbitration agreement by fraudulent

misrepresentation. B and the other parties applied to stay

those proceedings. A had tried unsuccessfully to restrain B

from determining its jurisdiction under the arbitration

agreement (see Weissfich v. Julius).

The circumstances were unique. B as the arbitrator could not

rely upon s.9 of the 1996 Act. Would the court grant a stay

under its inherent jurisdiction in favour of Swiss

arbitration?

Yes. The reasons can be summarised.

The allegations by A related to the validity of the

agreement and fell within the arbitration exclusion in

Art.1(4) of EC Reg. 44/2001.

The court retains an inherent jurisdiction to stay

English proceedings in favour of a foreign arbitration where

there is an issue as to whether the parties entered a binding

agreement to arbitrate. Whilst the court has jurisdiction to

decide the "threshold point"; that is the issue of

whether there was a binding arbitration agreement,

circumstances dictated that the court still retains an

inherent jurisdiction to stay the proceedings to enable the

foreign tribunal to decide that issue: Al Naimi v Islamic

Press Services Inc [2000] 1 LLR p.522

The Court of Appeal in Weissfich v. Julius already stated

that this was a matter of Swiss law and not to grant a stay

involves the court interfering with the Swiss arbitration

process, and the supervising jurisdiction of the Swiss court.

The obvious forum was Switzerland. To order otherwise would

be contrary to the New York Convention.

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