Leibinger & Anor v Stryker Trauma GmbH

Issue estoppel may prevent a party from relitigating jurisdictional issues decided by a competent foreign court, even where that decision is under appeal and the foreign court applied its own law. The estoppel is not avoided by asserting that the arbitration agreement is governed by a different system of law.

Challenges to an arbitration award must identify the grounds with sufficient specificity and comply with the statutory time limit. Extensions, particularly retrospective extensions, are not lightly granted because of the policy favouring the finality of arbitration. Material non-disclosure when obtaining permission to serve proceedings out of the jurisdiction may justify setting that permission aside.

The claimants challenged an arbitral tribunal’s jurisdiction and constitution in proceedings concerning an arbitration seated in London. They sought permission to serve detailed grounds of challenge and supporting evidence after the statutory period had expired.

The defendant applied to strike out the claim and challenged permission to serve out of the jurisdiction. The claimants had previously raised substantially the same jurisdictional issues before the German Court of Appeal, which rejected the joint-claim and appointing-party arguments. An appeal in Germany remained pending.

The issues included the effect of the German decision, the adequacy and timing of the claimants’ grounds and evidence, the nationality of the arbitrators, the governing law of the arbitration agreement, and the appointment of the chairman.

1. Foreign issue estoppel. The German Court of Appeal was a court of competent jurisdiction and had finally and conclusively determined the joint-claim and appointing-party issues on their merits. Those issues therefore could not be raised again in England. The fact that the German decision was under appeal did not prevent it being final and binding unless and until altered. The German court’s application of German law did not prevent issue estoppel arising under English private international law.
2. Service out. The claimants had failed to disclose the German proceedings when seeking permission to serve out of the jurisdiction. That omission was grave and material because the proceedings had already determined two of the proposed grounds and raised forum and parallel-proceedings considerations. Permission to serve out was set aside.
3. Late grounds and evidence. CPR 62.4(1)(b) required the claimants to state the challenged parts of the award and the grounds with sufficient specificity. The claim form did not fairly and squarely raise the appointment-of-chairman or proper-law points. The claimants also required permission to rely on evidence served after the claim form.
4. The statutory time limit and the policy favouring finality in arbitration weighed heavily against retrospective extensions. There was no adequate reason for the delay and no substantial injustice requiring an extension. The late grounds and evidence were therefore not admitted.
5. The arbitrator-nationality challenge had no realistic prospect of success. The claimants had themselves appointed a German arbitrator and thereby waived reliance on the contractual nationality restriction. The arbitration agreement, read with the share purchase agreement, was governed by German law.
6. The appointment-of-chairman argument was not hopeless. Although the clause could literally be read as transferring the power to the President of the Law Society after 120 days, the tribunal’s commercial construction was arguable. It did not require determination because the other matters had been decided against the claimants.
7. The action was an abuse of process concerning the joint-claim and appointing-party points. The permission to serve out was set aside, and the claimants were ordered to bear the costs, subject to any further submissions.

First-instance decision of the High Court (Commercial Court). The judgment records that the claimants had appealed the German Court of Appeal’s decision to the German Supreme Court, but that appeal was not determined in these proceedings.