Wael Buheiry v VistaJet Limited

The claimant challenged an LCIA award under the Arbitration Act 1996 sections 67 and 68, contending that the tribunal lacked jurisdiction because VJLU had not validly assigned rights to VistaJet under clause 7.7 of the 2014 Agreement, and that the arbitration Request was ineffectively served by e-mail in breach of clause 7.11. The court held that the assignment and service points did not engage the tribunal's "substantive jurisdiction" for the purposes of section 67 (which is limited to the matters in section 30), and that any alleged error about title to sue was properly a section 69 appeal (for which leave was not sought). The court further held that clause 7.11 did not conflict with the LCIA Rules governing delivery, the LCIA Rules validly permitted electronic delivery, and the tribunal was properly constituted and appointed; the section 68 procedural irregularity challenge likewise failed.

Background and parties: The claimant, Mr Buheiry, brought challenges to an LCIA arbitral award dated 9 September 2021 in favour of VistaJet for sums said to be due under an April 2014 agreement. The 2014 Agreement was between the claimant and VistaJet Luftfahrtunternehman GmbH (VJLU); VistaJet was an assignee of VJLU's rights. The claimant advanced two principal grounds of challenge under the Arbitration Act 1996 sections 67 and 68.

Relief sought: The claimant sought to set aside the award or otherwise to establish that the tribunal lacked jurisdiction because (i) the July 2020 assignment from VJLU to VistaJet was not permitted by clause 7.7 of Schedule C to the 2014 Agreement and so VistaJet lacked title to bring the arbitration, and (ii) the arbitration Request was not validly served because clause 7.11 specified fax or registered post and did not permit e-mail service.

Procedural posture: This was a first-instance challenge in the High Court (Commercial Court) to an LCIA award. The arbitration had been commenced October 2020, the tribunal appointed in January 2021 and the award issued 9 September 2021.

Issues framed:

• Whether the claimant’s attack fell within section 67 as a challenge to the tribunal’s substantive jurisdiction under section 30 of the Arbitration Act 1996.
• Whether clause 7.7 permitted the assignment from VJLU to VistaJet (with reference to the Companies Act 2006 section 1159 definition of "subsidiary" and "holding company").
• Whether clause 7.11 precluded service by e-mail and therefore rendered commencement of the arbitration ineffective.
• Whether any procedural irregularity under section 68 caused substantial injustice.

Court’s reasoning and decision: The court held that a section 67 challenge must address the tribunal’s substantive jurisdiction as defined in section 30 (valid arbitration agreement, proper constitution of tribunal, scope of matters referred). The claimant’s assignment complaint challenged VistaJet’s title to sue and so was an error of law susceptible to section 69 appeal (requiring leave), not a section 67 re-hearing; no leave under section 69 had been sought. The court also concluded that clause 7.11 need not be read as governing commencement of LCIA arbitrations, that the LCIA Rules (incorporated by the arbitration clause) provide for electronic delivery, and that there was no conflict displacing those Rules. The tribunal had been validly constituted and appointed under the LCIA Rules and the claimant had ample opportunity to advance his arguments, so the section 68 complaint failed for want of substantial injustice. The applications under sections 67 and 68 were dismissed.

Subsidiary findings: The court observed that, even if it had to decide the assignment point, the 2014 clause 7.7 read with Companies Act 2006 section 1159 permitted an assignment to VistaJet because both companies were ultimately subsidiaries of the same group holding company; however, that conclusion was unnecessary to the disposition.

The court dismissed the applications under Arbitration Act 1996 sections 67 and 68. It held that the claimant’s assignment complaint did not challenge the tribunal’s "substantive jurisdiction" under section 30 and was therefore an error of law properly raised under section 69 (for which leave had not been sought). The court also held that clause 7.11 did not override the LCIA Rules' provisions permitting electronic delivery and that the arbitration was validly commenced and the tribunal validly constituted; no substantial injustice arose under section 68.