A3 v B3 [2019] ADGMCFI 0004 (04 July 2019)

A3 v B3 [2019] ADGMCFI 0004 (04 July 2019)

Clause 32.2.2 of the Lease gave A3 a unilateral option to amend the arbitration clause upon the establishment of an arbitration centre in the Abu Dhabi Global Market. The condition precedent for exercise of the option was satisfied when the centre was established before December 2018. A3 exercised the option by written notice in November 2018, making reasonable and incidental changes to the arbitration provisions. The agreement, as amended, is sufficiently certain, reasonable, and in writing as required by law. B3's failure to countersign does not invalidate the exercise of the option. Therefore, there is a valid and binding arbitration agreement between A3 and B3 for disputes arising...

Citation
[2019] ADGMCFI 0004
Parties
Claimant: A3; Defendant: B3
Jurisdiction
United Arab Emirates
Judgment Date
04 July 2019
Procedural Posture
Arbitration Claim (declaration of Arbitration Agreement) / Judgment After Hearing; Defendant Did Not Participate
Outcome
Declaration granted in favour of A3; valid and binding arbitration agreement exists.
Legal Topics
Arbitration Agreement Validity, Unilateral Option Clauses, Reasonableness in Contract Modification, Condition Precedent, Written Arbitration Agreements
Arbitration Contract Law Property Law Arbitration Agreement Validity Unilateral Option Clauses Reasonableness in Contract Modification Condition Precedent Written Arbitration Agreements

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Parties

A3

Claimant

B3

Defendant

Procedural Posture

Arbitration Claim (declaration of Arbitration Agreement) / Judgment After Hearing; Defendant Did Not Participate

Legal Issues

  1. 1 Whether there is a valid and binding arbitration agreement between A3 and B3 under the Lease
  2. 2 Whether A3 validly exercised a unilateral option to amend the arbitration clause
  3. 3 Whether the replacement arbitration provisions were reasonable and within the scope of the option

Ratio Decidendi

Clause 32.2.2 of the Lease gave A3 a unilateral option to amend the arbitration clause upon the establishment of an arbitration centre in the Abu Dhabi Global Market. The condition precedent for exercise of the option was satisfied when the centre was established before December 2018. A3 exercised the option by written notice in November 2018, making reasonable and incidental changes to the arbitration provisions. The agreement, as amended, is sufficiently certain, reasonable, and in writing as required by law. B3's failure to countersign does not invalidate the exercise of the option. Therefore, there is a valid and binding arbitration agreement between A3 and B3 for disputes arising...

Court Disposition

Declaration granted in favour of A3; valid and binding arbitration agreement exists.

Orders

  • There is a valid and binding arbitration agreement between the Claimant and the Defendant that disputes arising under a lease between them dated October be subject to arbitration under the Rules of Arbitration of the International Chamber of Commerce and that the seat or legal place of arbitration is the Abu Dhabi...
  • The Claimant must not seek to enforce the declaration or take steps regarding arbitral proceedings in reliance upon it before a specified period has elapsed after service of the judgment and order on the Defendant.