Monde Petroleum SA v Westernzagros Ltd

Monde Petroleum SA v Westernzagros Ltd

The exclusive jurisdiction clause in the Termination Agreement superseded the arbitration agreement in the CSA, and all disputes, including those relating to the CSA, are to be resolved in the Commercial Court. The arbitral tribunal correctly held it had no jurisdiction over WZL’s counterclaims for declaratory relief. Security for costs is appropriate and must be provided by payment into court or a first-class London bank guarantee.

Parties
Claimant in 2013 Folio 308 & 2014 Folio 1060, Defendant in 2014 Folio: Monde Petroleum SA; Defendant in 2013 Folio 308 & 2014 Folio 1060, Claimant in 2014 Folio 975: WesternZagros Limited
Jurisdiction
England and Wales
Judgment Date
22 January 2015
Procedural Posture
Commercial/arbitration Related Applications / Judgment on S.67 Arbitration Act 1996 Appeal, Enforcement of Arbitral Award, Jurisdiction Challenge, and Security for Costs
Outcome
WZL’s s.67 appeal dismissed; tribunal’s lack of jurisdiction confirmed; WZL’s application to set aside enforcement order fails; security for costs ordered against Monde.
Legal Topics
Jurisdiction Clauses, Arbitration Agreements, Settlement Agreements, Security for Costs, Misrepresentation, Duress
Arbitration Commercial Law Contract Law Jurisdiction Clauses Arbitration Agreements Settlement Agreements Security for Costs Misrepresentation +1 more

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Parties

Monde Petroleum SA

Claimant in 2013 Folio 308 & 2014 Folio 1060, Defendant in 2014 Folio

WesternZagros Limited

Defendant in 2013 Folio 308 & 2014 Folio 1060, Claimant in 2014 Folio 975

Procedural Posture

Commercial/arbitration Related Applications / Judgment on S.67 Arbitration Act 1996 Appeal, Enforcement of Arbitral Award, Jurisdiction Challenge, and Security for Costs

Legal Issues

  1. 1 Whether the arbitration agreement in the CSA survived the Termination Agreement and covered WZL’s counterclaims for declaratory relief
  2. 2 Whether the exclusive jurisdiction clause in the Termination Agreement superseded the arbitration clause in the CSA
  3. 3 Whether the arbitral tribunal had jurisdiction over WZL’s counterclaims

Ratio Decidendi

The exclusive jurisdiction clause in the Termination Agreement superseded the arbitration agreement in the CSA, and all disputes, including those relating to the CSA, are to be resolved in the Commercial Court. The arbitral tribunal correctly held it had no jurisdiction over WZL’s counterclaims for declaratory relief. Security for costs is appropriate and must be provided by payment into court or a first-class London bank guarantee.

Court Disposition

WZL’s s.67 appeal dismissed; tribunal’s lack of jurisdiction confirmed; WZL’s application to set aside enforcement order fails; security for costs ordered against Monde.

Orders

  • WZL’s s.67 appeal is dismissed.
  • Order for costs made in the arbitration stands; enforcement order not set aside.