Chechetkin v Payward Ltd & Ors

For the purposes of the consumer jurisdiction provisions, a person concludes a contract as a consumer where its purpose can objectively be regarded as outside that person’s trade or profession. Personal sophistication, expertise and knowledge do not alter that statutory test.

An arbitration agreement or a New York Convention award does not, without more, deprive the English court of jurisdiction. The Arbitration Act 1996 provides a separate code under which proceedings may be stayed and an award may be relied on by way of defence, set-off, estoppel or otherwise. Issues of jurisdiction under CPR Part 11 remain distinct.

The claimant brought proceedings concerning losses incurred through cryptocurrency trading on the defendants’ platform. He relied on alleged breaches of the Financial Services and Markets Act 2000.

The defendants relied on contractual arbitration and exclusive jurisdiction provisions. JAMS arbitration had resulted in awards confirming jurisdiction and rejecting the claimant’s claims. The defendants applied under CPR Part 11 for a declaration that the English court lacked jurisdiction and for dismissal of the claim.

The central issues were whether the claimant was a consumer domiciled in the United Kingdom for the purposes of the Civil Jurisdiction and Judgments Act 1982, and whether recognition of the arbitration awards under section 101 of the Arbitration Act 1996 deprived the court of jurisdiction.

1. Adjournment. The application should proceed. The jurisdiction issues were largely separate from the prospective enforcement issues, the parties were ready, and determining the application would not amount to prosecuting the claimant’s claim contrary to the arbitral award. It was also unclear whether the final award was yet final for enforcement purposes.
2. Relief from sanctions. Relief was granted for the defendants’ late service of a witness statement. Applying the Denton v White principles, the default was not trivial, but the delay was limited, arose from oversight rather than deliberate breach, caused no material prejudice, and the parties had prepared for the hearing.
3. Consumer status. Applying the better-argument approach in Goldman Sachs International v Novo Banco SA, the claimant was a consumer under section 15 E of the Civil Jurisdiction and Judgments Act 1982. His contract concerned digital-asset trading, objectively outside his profession as a lawyer. The statutory definition did not depend on sophistication, expertise, knowledge, account classification or the parties’ descriptions of themselves. The section 15 B ground therefore defeated the defendants’ first argument.
4. Effect of arbitration and award. An arbitration clause or award does not remove the court’s jurisdiction. Section 9 of the Arbitration Act 1996 permits a stay of proceedings to give effect to an arbitration agreement, but a stay does not extinguish jurisdiction. Section 101 provides that a recognised New York Convention award may be relied upon by way of defence, set-off or otherwise, and may give rise to issue estoppel. It does not deprive the court of jurisdiction, either in its terms or by necessary implication.
5. The distinction identified in Bilta (UK) Ltd (In Liquidation) v Nazir between the statutory arbitration code and CPR Part 11 was applicable. Any effect of the awards, including possible defences, estoppels or enforcement objections under section 103, could be addressed without treating the court as lacking jurisdiction.
6. The jurisdiction application was dismissed.