Law Debenture Trust Corporation Plc v Elektrim Finance BV & Ors [2005] EWHC 1412 (Ch) (01 July 2005)

Law Debenture Trust Corporation Plc v Elektrim Finance BV & Ors [2005] EWHC 1412 (Ch) (01 July 2005)

Clause 29.7 of the trust deed gives Law Debenture and bondholders an exclusive contractual option to litigate disputes in the English courts, notwithstanding the general arbitration clause. Law Debenture did not participate in the arbitration within the meaning of section 72 of the Arbitration Act 1996 and is entitled to seek relief in court. The court, not the arbitral tribunal, should determine the jurisdictional issue, and Law Debenture is not obliged to arbitrate the present disputes.

Citation
[2005] EWHC 1412 (Ch)
Parties
Claimant: The Law Debenture Trust Corporation PLC; First Defendant: Elektrim Finance B.V.; Second Defendant: Elektrim S.A.; Third Defendant: Concord Trust
Jurisdiction
England and Wales
Judgment Date
01 July 2005
Procedural Posture
Commercial/trust/arbitration Dispute / Interlocutory Application for Stay and Jurisdictional Determination
Outcome
Application by Law Debenture granted; application by Elektrim defendants for stay refused.
Legal Topics
Arbitration Agreements, Jurisdiction of Courts Vs Arbitral Tribunals, Interpretation of Trust Deeds, Stay of Proceedings, Bondholder Rights
Arbitration Commercial Law Trusts Arbitration Agreements Jurisdiction of Courts Vs Arbitral Tribunals Interpretation of Trust Deeds Stay of Proceedings Bondholder Rights

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Parties

The Law Debenture Trust Corporation PLC

Claimant

Elektrim Finance B.V.

First Defendant

Elektrim S.A.

Second Defendant

Concord Trust

Third Defendant

Procedural Posture

Commercial/trust/arbitration Dispute / Interlocutory Application for Stay and Jurisdictional Determination

Legal Issues

  1. 1 Whether the court or arbitral tribunal should determine jurisdiction over disputes under the trust deed
  2. 2 Whether Law Debenture is entitled to litigate rather than arbitrate under clause 29 of the trust deed
  3. 3 Whether Law Debenture participated in the arbitration so as to be barred from relief under section 72 of the Arbitration Act 1996

Ratio Decidendi

Clause 29.7 of the trust deed gives Law Debenture and bondholders an exclusive contractual option to litigate disputes in the English courts, notwithstanding the general arbitration clause. Law Debenture did not participate in the arbitration within the meaning of section 72 of the Arbitration Act 1996 and is entitled to seek relief in court. The court, not the arbitral tribunal, should determine the jurisdictional issue, and Law Debenture is not obliged to arbitrate the present disputes.

Court Disposition

Application by Law Debenture granted; application by Elektrim defendants for stay refused.

Orders

  • Declaration that the court has jurisdiction to hear and determine the claims.
  • Order restraining the second defendant from pursuing or taking further steps in the arbitration proceedings commenced by notices of arbitration dated 7th January and 21st January 2005.