Company 1 v Company 2 & Anor [2017] EWHC 2319 (QB) (20 September 2017)

Company 1 v Company 2 & Anor [2017] EWHC 2319 (QB) (20 September 2017)

The English court has jurisdiction under s44 Arbitration Act 1996 to grant interim relief in support of foreign-seated arbitration only if the application is urgent and necessary to preserve assets or evidence, and only if it is appropriate for the English court to intervene. In this case, although the urgency and necessity tests are met for the freezing order or payment into a joint account, it is not appropriate for the English court to exercise its powers given the foreign seat of arbitration, the existence of parallel proceedings in the BVI, and the tenuous connection to England. Disclosure orders are not appropriate as they are a matter for the arbitral tribunal.

Citation
[2017] EWHC 2319
Parties
Claimant: Company 1; First Defendant: Company 2; Second Defendant: A
Jurisdiction
England and Wales
Judgment Date
20 September 2017
Procedural Posture
Arbitration Claim (interim Relief) / Application for Interim Orders Pending Arbitration
Outcome
Application dismissed
Legal Topics
Interim Relief in Support of Arbitration, Jurisdiction of English Courts Under Arbitration Act 1996, Freezing Orders, Disclosure in Arbitration Context, Appropriateness of Forum
Arbitration Commercial Law Interim Relief in Support of Arbitration Jurisdiction of English Courts Under Arbitration Act 1996 Freezing Orders Disclosure in Arbitration Context Appropriateness of Forum

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Parties

Company 1

Claimant

Company 2

First Defendant

A

Second Defendant

Procedural Posture

Arbitration Claim (interim Relief) / Application for Interim Orders Pending Arbitration

Legal Issues

  1. 1 Whether the English court has jurisdiction to grant interim relief under s44 Arbitration Act 1996 where the seat of arbitration is Switzerland
  2. 2 Whether the application is urgent and necessary for the preservation of assets or evidence
  3. 3 Whether it is appropriate for the English court to exercise its powers given the foreign seat and parallel proceedings

Ratio Decidendi

The English court has jurisdiction under s44 Arbitration Act 1996 to grant interim relief in support of foreign-seated arbitration only if the application is urgent and necessary to preserve assets or evidence, and only if it is appropriate for the English court to intervene. In this case, although the urgency and necessity tests are met for the freezing order or payment into a joint account, it is not appropriate for the English court to exercise its powers given the foreign seat of arbitration, the existence of parallel proceedings in the BVI, and the tenuous connection to England. Disclosure orders are not appropriate as they are a matter for the arbitral tribunal.

Court Disposition

Application dismissed

Orders

  • Application for payment of $236,725 and $360,000 into joint account or for a freezing order is dismissed as inappropriate for the English court to grant under s44 Arbitration Act 1996.
  • Application for disclosure of sales management agreements and bank statements is dismissed for lack of jurisdiction and as a matter for the arbitral tribunal.