ET Plus SA & Ors v Welter & Ors

An arbitration clause referring disputes regarding the performance or interpretation of a contract may extend beyond contractual claims. It can include closely connected tortious and competition-law claims arising from the same alleged non-performance. The question is one of construction, assisted where appropriate by the commercial expectation of one-stop adjudication.

Under art 6(1) of the Council Regulation (EC) No 44/2001, a broad commonsense approach applies. Jurisdiction may be founded on an English anchor defendant where there is a real issue to be tried against that defendant and the claims are sufficiently connected to avoid irreconcilable judgments. The employment jurisdiction rules do not generally extend to directors sued for breach of fiduciary duty.

The claimants, companies involved in marketing Eurotunnel freight tickets, brought claims against former directors and employees and against Eurotunnel entities. The claims concerned alleged misuse of confidential information, breaches of employment contracts and fiduciary duties, procuring breaches, competition-law infringements, unlawful interference and conspiracy.

The defendants sought stays for an ICC arbitration in Paris, challenges to jurisdiction, and strike-out orders. The court had to determine the scope of the arbitration clause, whether claims against foreign-domiciled individual defendants could proceed in England under art 6(1) of the Council Regulation (EC) No 44/2001, and whether the surviving proceedings should be stayed for case management.

1. Scope of arbitration. Clause 24, governed by French law, covered disputes regarding the performance, non-performance or interpretation of the contract. The words extended beyond the contract’s four corners. Closely connected tortious claims concerning misuse of confidential information, unlawful interference and conspiracy therefore fell within the clause. The same applied to the claims under arts 81 and 82 of the EC Treaty, which arose from the same factual complaints. Those claims against Eurotunnel were stayed under s 9 of the Arbitration Act 1996.

2. Jurisdiction under art 6(1). The provision codified the Kalfelis test. The court adopted a broad commonsense approach and avoided over-sophisticated analysis. The claimants needed a real or serious issue to be tried against the English anchor defendant, together with a sufficient connection between the claims to avoid irreconcilable judgments. This test was satisfied for the claims against Welter, Buscher and Barrie concerning misuse of confidential information, and against Welter, Delaplanque and Barrie concerning fiduciary duty.

3. The mandatory employment provisions of arts 18(1) and 20(1) prevented pure employment claims against foreign-domiciled employees from proceeding in England. They did not generally protect directors against claims for breach of fiduciary duty. The court considered the substance of the alleged foreign-law duties rather than their labels. The fiduciary-duty claim against Buscher failed for want of evidence of a real issue to be tried, but those against Welter and Delaplanque proceeded.

4. The art 81 claim against the first to fourth defendants had no real prospect of success because they could not realistically be treated as independent undertakings on the pleaded facts. Claims against Morrison were struck out. Claims against Broek were struck out because any liability arising from his conduct in the course of employment would realistically lie against Eurotunnel.

5. The surviving claims were stayed under the court’s inherent case-management jurisdiction pending the Paris arbitration. Costs were reserved.