NDK LIMITED v HUO HOLDING LIMITED & Anor

For a challenge under sections 30 and 67 of the Arbitration Act 1996, substantive jurisdiction includes whether a valid arbitration agreement extends to the dispute. That question is determined by the court at a rehearing. In a joint venture, a shareholders’ agreement and the company’s articles are ordinarily complementary contractual instruments, not obligations on different legal planes. A broad arbitration clause may cover claims framed only under the articles where the agreements concern the same relationship and subject matter, are interdependent or contemporaneous, and the commercial context supports one-stop adjudication. The court must examine the substance of the dispute, not its legal label. The inability of arbitrators to order rectification of a company register does not itself make a private transfer or pre-emption dispute non-arbitrable. Strong public-policy reasons are required.

NDK, the majority shareholder in a Cypriot joint venture company, challenged under sections 67 and 68 of the Arbitration Act 1996 an LCIA partial final award granting anti-suit relief. The relief restrained proceedings in Cyprus concerning share transfers, pre-emption rights, alleged fraud and rectification of the company’s register. The arbitration claimants relied on the arbitration clause in a shareholders’ agreement. NDK argued that its claims arose under the company’s articles, which were governed by Cypriot law and contained no jurisdiction clause, and that the claims were non-arbitrable because they concerned shareholder status, public registers and court-only relief. The court determined the section 67 challenges to the anti-suit award. A separate serious-irregularity challenge was adjourned.

Both of NDK’s challenges under section 67 of the Arbitration Act 1996 failed. The separate section 68 ground was not determined.

1. Substantive jurisdiction. Sections 30(1), 82(1) and 72(1) of the Arbitration Act 1996 exhaustively identify the matters comprising substantive jurisdiction. Whether an arbitration agreement extends to particular claims is therefore a jurisdictional question. The court conducts a rehearing, not a review, applying C v D1 [2015] EWHC 2126 (Comm) and Dallah Estate & Tourism Holding Co v Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46.
2. Construction. The court applied the Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40 presumption and the Extended Fiona Trust principles summarised in Terre Neuve Sarl v Yewdale Ltd [2020] EWHC 772 (Comm). The wording, interdependence, timing, subject matter and commercial purpose of the agreements had to be considered. The substance of the dispute, rather than its pleading vehicle, was decisive: Lombard North Central Plc v GATX Corporation [2012] EWHC 1067 (Comm) and Nori Holdings Ltd v Public Joint-Stock Bank Otkritie Financial Corporation [2018] EWHC 1343 (Comm).
3. Articles and shareholders’ agreement. The court rejected the analysis in BTY v BUA [2018] SGHC 2013 that the two instruments operated on separate legal planes, and concluded that it should not follow that decision. Both instruments were essentially contractual and complementary. In a private joint venture, the shareholders’ agreement was commercially more significant where it dealt in detail with share transfers and pre-emption and contained a supremacy clause.
4. Application. The articles and shareholders’ agreement concerned the same shareholder relationship and subject matter, were interdependent and contemporaneous, and the articles contained no competing jurisdiction clause. The Cyprus claims concerned the efficacy and consequences of share transfers and alleged interference with pre-emption rights. Their formulation by reference to the articles did not take them outside the broad LCIA arbitration clause.
5. Arbitrability and relief. The dispute was a private commercial dispute and was arbitrable. The inability of arbitrators to rectify the register did not make the underlying dispute non-arbitrable. The relevant rights and facts could be determined in arbitration, with consequential relief sought from the court. Public access to the register and the description of the issue as one of status were insufficient. The claims did not involve the corporate-status or wider third-party concerns identified in Bridgehouse (Bradford No 2) Ltd v BAE Systems Plc [2020] EWCA Civ 759.

The section 67 challenges to the Partial Final Award therefore failed. The parties were directed to agree a process for consequential matters.