NDK Limited v HUO Holding Limited (No 2)

NDK Limited v HUO Holding Limited (No 2)

A party who proposes to take a transfer of shares and executes and delivers a Deed of Adherence in the prescribed form becomes a party to the SHA and the LCIA Arbitration Agreement, even if not a registered shareholder. The arbitration agreement is sufficiently wide to cover disputes as to the validity of the share transfer and the party status of the transferee. Therefore, HUO was a party to the arbitration agreement and the tribunal had jurisdiction.

Parties
Claimant (arbitration Respondent): NDK Limited; Second Defendant (arbitration Claimant): HUO Holding Limited
Jurisdiction
England and Wales
Judgment Date
14 October 2022
Procedural Posture
Arbitration Challenge (commercial Court) / Judgment on Threshold Issue in S.67 and S.68 Arbitration Act 1996 Challenges
Outcome
NDK's challenges under s.67 and s.68 of the Arbitration Act 1996 are dismissed.
Legal Topics
Separability of Arbitration Agreements, Deed of Adherence, Jurisdiction of Arbitral Tribunal, Shareholder Agreements, Interpretation of Contracts
Arbitration Commercial Law Contract Law Separability of Arbitration Agreements Deed of Adherence Jurisdiction of Arbitral Tribunal Shareholder Agreements Interpretation of Contracts

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Parties

NDK Limited

Claimant (arbitration Respondent)

HUO Holding Limited

Second Defendant (arbitration Claimant)

Procedural Posture

Arbitration Challenge (commercial Court) / Judgment on Threshold Issue in S.67 and S.68 Arbitration Act 1996 Challenges

Legal Issues

  1. 1 Whether HUO Holding Limited became a party to the LCIA Arbitration Agreement in the SHA despite not being a registered shareholder
  2. 2 Whether the execution and delivery of a Deed of Adherence is sufficient to accede to the arbitration agreement
  3. 3 Whether the arbitral tribunal had jurisdiction over HUO under s.67 Arbitration Act 1996

Ratio Decidendi

A party who proposes to take a transfer of shares and executes and delivers a Deed of Adherence in the prescribed form becomes a party to the SHA and the LCIA Arbitration Agreement, even if not a registered shareholder. The arbitration agreement is sufficiently wide to cover disputes as to the validity of the share transfer and the party status of the transferee. Therefore, HUO was a party to the arbitration agreement and the tribunal had jurisdiction.

Court Disposition

NDK's challenges under s.67 and s.68 of the Arbitration Act 1996 are dismissed.

Orders

  • NDK's challenge to the Consolidated Award under s.67 of the 1996 Act is dismissed.
  • NDK's outstanding s.68 challenge to the PFA is dismissed.