Noble Denton Middle East & Anor v Noble Denton International Ltd

On an application under section 18 of the Arbitration Act, the court’s role is ordinarily limited to deciding whether there is a good arguable case that an arbitration agreement exists. The court should not finally determine that jurisdictional issue under section 18 where the statutory scheme gives the arbitrator power to rule on his own jurisdiction. That approach respects party autonomy and Kompetenz Kompetenz. A party denying the arbitration agreement retains statutory protection through sections 67, 72 or, where appropriate, section 32. An arbitration clause is treated as at least equivalent to an exclusive jurisdiction clause for a stay sought on lis alibi pendens or forum non conveniens grounds. A stay therefore requires exceptional circumstances or strong or very strong reasons.

The claimants applied under section 18 of the Arbitration Act for the appointment of a sole arbitrator. The defendant disputed the existence of an arbitration agreement and sought a stay because related proceedings were pending in Texas. The parties’ competing cases concerned whether the Dubai work was governed by a 2003 agreement or by an acknowledgement of order containing an arbitration clause.

The central questions were whether section 18 required proof of an arbitration agreement or merely a good arguable case, and whether the Texas proceedings justified a stay.

1. Section 18 was a gateway for appointing an arbitrator in default of agreement. It required only a good arguable case that an arbitration agreement existed. The final jurisdictional issue remained for the arbitrator.

2. The statutory scheme respected party autonomy and permitted the arbitrator to determine his own jurisdiction under section 30. Sections 67, 72 and 32 provided safeguards for jurisdictional challenges. A section 72 application could justify court determination of the issue.

3. It was inappropriate to direct a trial of the arbitration-agreement issue under section 18. Sir Anthony Colman was appointed as arbitrator.

4. The stay application was refused. An English arbitration clause was equivalent to, or stronger than, an exclusive jurisdiction clause. Exceptional circumstances or strong or very strong reasons were required to override it. The existence and competence of the Texas court did not satisfy that standard.

5. The claimants paid the costs of the substantive applications. The defendant received the costs arising from the defective service order.