Fiona Trust & Holding Corp & Ors v Privalov & Ors [2006] EWHC 2583 (Comm) (20 October 2006)

Fiona Trust & Holding Corp & Ors v Privalov & Ors [2006] EWHC 2583 (Comm) (20 October 2006)

The principal issue of whether the charterparties were procured by bribery and thus void ab initio is not a dispute arising under or out of the charterparties for the purposes of the arbitration clause. The arbitration clause does not confer jurisdiction on the arbitrator to determine whether the contracts were ever validly entered into. The claimants have a good arguable case for rescission and restitution, and the proceedings should not be stayed under section 9 of the Arbitration Act 1996. The court, not the arbitrator, should determine the existence and effect of the arbitration agreement in these circumstances.

Citation
[2006] EWHC 2583 (Comm)
Parties
Claimants: Fiona Trust & Holding Corporation & 20 Others; Defendant: Yuri Privalov; Defendants: Third to Seventeenth and Nineteenth Defendants
Jurisdiction
England and Wales
Judgment Date
20 October 2006
Procedural Posture
Commercial Court Proceedings / Interlocutory Applications Regarding Amendment, Joinder, and Stay Pending Arbitration
Outcome
Applications by claimants to amend and join additional parties granted; applications for stay of proceedings pending arbitration refused.
Legal Topics
Arbitration Clauses, Rescission for Bribery, Jurisdiction, Stay of Proceedings, Fraud and Conspiracy, Restitution
Commercial Law Arbitration Contract Law Arbitration Clauses Rescission for Bribery Jurisdiction Stay of Proceedings Fraud and Conspiracy +1 more

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Parties

Fiona Trust & Holding Corporation & 20 Others

Claimants

Yuri Privalov

Defendant

Third to Seventeenth and Nineteenth Defendants

Defendants

Procedural Posture

Commercial Court Proceedings / Interlocutory Applications Regarding Amendment, Joinder, and Stay Pending Arbitration

Legal Issues

  1. 1 Whether disputes concerning bribery and rescission fall within the scope of the arbitration clause
  2. 2 Whether the arbitration clause survives rescission of the charterparties for bribery
  3. 3 Whether the claimants have a good arguable case for rescission and restitution

Ratio Decidendi

The principal issue of whether the charterparties were procured by bribery and thus void ab initio is not a dispute arising under or out of the charterparties for the purposes of the arbitration clause. The arbitration clause does not confer jurisdiction on the arbitrator to determine whether the contracts were ever validly entered into. The claimants have a good arguable case for rescission and restitution, and the proceedings should not be stayed under section 9 of the Arbitration Act 1996. The court, not the arbitrator, should determine the existence and effect of the arbitration agreement in these circumstances.

Court Disposition

Applications by claimants to amend and join additional parties granted; applications for stay of proceedings pending arbitration refused.

Orders

  • Permission to amend claim form and particulars of claim granted
  • Permission to join additional claimants and defendants granted