VTB Commodities Trading DAC v JSC Antipinsky Refinery

Section 32 of the Arbitration Act 1996 is exceptional, but the court may determine jurisdiction where doing so is likely to save substantial costs, the application is made without material delay, and there is good reason for court determination. Seeking interim relief in support of arbitration does not, without clear and unequivocal conduct, repudiate the arbitration agreement or remove the tribunal’s jurisdiction. Broad arbitration wording covering disputes arising out of or in connection with a contract may encompass related warranty and misrepresentation claims. A non-contractual conspiracy claim against a contracting party may likewise fall within the clause where it is connected with the contractual relationship.

VTB Commodities Trading DAC applied under section 32 of the Arbitration Act 1996 for the court to determine whether an LCIA tribunal had jurisdiction. The parties’ gasoil prepayment and offtake contracts contained English law and London arbitration clauses.

The Refinery challenged jurisdiction on three grounds: VTB’s Russian proceedings and applications for injunctive relief had submitted the disputes to the Russian courts; claims concerning a later letter of assurance were outside the arbitration clause; and an unlawful means conspiracy claim was not covered. The court first considered whether the statutory conditions for a section 32 determination were satisfied.

1. Section 32 application. The requirements in section 32 of the Arbitration Act 1996 were satisfied. The likely prospect of a challenge under section 67 made substantial cost savings probable. Delay before the tribunal’s permission was not material because VTB reasonably needed to see the Refinery’s Defence before deciding how to address jurisdiction. The risk of insolvency, the need for expedition, and the tribunal’s consent provided good reason for court determination.

2. Russian proceedings. VTB had sought Russian relief in support of the London arbitration. Although the Russian proceedings involved allegations relevant to the arbitration, the surrounding circumstances showed no intention to abandon arbitration. Applying the approach in BEA Hotels v Bellway [2007] 2 Lloyd’s Rep. 493, repudiation required conduct clearly and unequivocally evincing an intention no longer to be bound. That threshold was not met. The first jurisdictional challenge was dismissed.

3. Letter of assurance. The arbitration clause was construed in accordance with the commercial presumption described by Lord Hoffmann in Fiona Trust v Privalov [2008] 1 Lloyd’s Rep. 254. The letter of assurance concerned compliance with the March 2019 contracts and was closely connected with them. Rational commercial parties would intend related warranty and deceit claims to be determined by the same tribunal. The second challenge was dismissed.

4. Unlawful means conspiracy. The Refinery’s alleged non-contractual liability for conspiracy arose out of or in connection with the prepayment and offtake contracts. The fact that other alleged conspirators were not parties to the arbitration agreement did not prevent the claim against the Refinery from falling within the clause. The third challenge was dismissed.

5. The tribunal therefore had jurisdiction to hear and determine the disputes particularised in VTB’s Statement of Case.

First-instance determination under section 32 of the Arbitration Act 1996. The court dismissed all three jurisdictional challenges.