A v B

A challenge under section 67 of the Arbitration Act 1996 is a rehearing on jurisdiction, without permission being required. In construing an arbitration clause, the court asks what the words would convey to a reasonable person with the relevant background. A clause referring to one party filing a claim against another at an identified arbitral institution ordinarily implies submission to that tribunal’s jurisdiction. Apparent inconsistency with other contractual wording does not prevent an arbitration agreement where the agreement, read as a whole and in context, identifies the obligations and disputes intended to be arbitrated.

The claimant challenged an arbitral award under section 67 of the Arbitration Act 1996. The tribunal had found that the defendant signed a 2008 Agreement and that article 2.10 contained an arbitration agreement conferring jurisdiction on the London Court of International Arbitration.

The court had to determine whether the defendant signed the agreement and, if so, whether article 2.10 referred disputes arising from the agreement to LCIA arbitration. The application was therefore a rehearing of the tribunal’s jurisdictional conclusions.

1. The application was dismissed. The court held that the defendant signed the 2008 Agreement and that article 2.10 was an arbitration clause binding him and conferring jurisdiction on the LCIA tribunal.

2. Under section 67 of the Arbitration Act 1996, the jurisdictional challenge required a rehearing, for which no permission was needed. The court was required to determine the factual issue of signature for itself. The probabilities, the claimant’s credible evidence and contemporaneous documents supported the conclusion that the agreement had been signed. The defendant’s evidence was treated with scepticism because he had not been frank about his interest in KH and had chosen not to give evidence before the tribunal. The handwriting evidence was inconclusive.

3. The court construed article 2.10 by asking what it would have conveyed to a reasonable person possessing the relevant background. Although the clause referred to enforcing rights under a Shareholders’ Agreement to which the defendant was not expressed to be a party, it also expressly contemplated filing a claim against him at the LCIA. It would be commercially unnatural to treat that reference as merely an unenforceable aspiration.

4. Read with articles 2.1 to 2.4 and the contractual background, article 2.10 referred to claims concerning the obligations which the defendant assumed under the Shareholders’ Agreement and Escrow Agreement, related governance obligations, and the implied obligation arising from those provisions. The tribunal’s reasoning on jurisdiction was not binding, but its concise construction was helpful and essentially accorded with the court’s own conclusion.

The arbitral tribunal had determined that the defendant was liable under the 2008 Agreement and that it had jurisdiction under article 2.10. The High Court, on a rehearing under section 67 of the Arbitration Act 1996, upheld the jurisdictional conclusion and dismissed the challenge.