AMIR SOLEYMANI v NIFTY GATEWAY LLC

A claim whose principal subject matter is the validity or enforceability of an arbitration agreement falls within the arbitration exclusion from the Recast Regulation and therefore outside the consumer jurisdiction provisions in the Civil Jurisdiction and Judgments Act 1982. Other claims may fall within the consumer jurisdiction gateway where the trader purposefully directs activities to the consumer’s domicile; a borderless business can satisfy that test without geographically specific activity. Under s 9 of the Arbitration Act 1996, a stay is mandatory once a concluded arbitration agreement covering the dispute is established, unless the resisting party proves on the balance of probabilities that it is null and void, inoperative or incapable of being performed. Where that issue is fact-sensitive and connected with the merits, the court may stay the proceedings for the arbitral tribunal and supervisory court to determine it.

Mr Soleymani, resident in England, sought declarations that arbitration and governing-law clauses in Nifty Gateway’s online terms were unfair and non-binding, and that a contract arising from his bid for an NFT was illegal under the Gambling Act 2005. Nifty Gateway, a Delaware company operating a digital-asset platform, had commenced arbitration in New York under the disputed clause and applied under CPR Part 11 for a jurisdictional order or under s 9 of the Arbitration Act 1996 for a stay.

The central questions were whether the English court had jurisdiction under s 15B of the Civil Jurisdiction and Judgments Act 1982, and whether the English proceedings should be stayed pending determination of arbitrability and the substantive disputes in the New York arbitration.

1. Jurisdiction. Applying the better-of-the-argument test, the claimant must provide a plausible evidential basis for each jurisdictional gateway, and the court must take a pragmatic view of contested evidence at the interlocutory stage. The claim concerning the validity of the arbitration clause had arbitration as its principal focus and fell within Article 1(2)(d) of the Recast Regulation. It was therefore outside the scope of s 15B of the Civil Jurisdiction and Judgments Act 1982 (paras [41]-[45], [55]-[61]).
2. The claims concerning the governing-law clause and alleged illegality under the Gambling Act 2005 were not principally concerned with arbitration. The claimant had the better argument that the defendant directed commercial activities to the UK. The assessment was holistic. For a borderless and decentralised business, purposeful targeting need not have a specific geographical boundary (paras [62]-[80]).
3. Stay. The defendant established under s 9(1) of the Arbitration Act 1996 that a concluded arbitration agreement covered the matters in dispute. The claimant therefore had to satisfy the court, on the balance of probabilities, that the agreement was null and void, inoperative or incapable of being performed. Section 9 imposed a mandatory, rather than discretionary, stay obligation (paras [81]-[86], [99]-[100]).
4. The court could determine the s 9(4) issue summarily, order a trial, or stay the English proceedings so that the tribunal could address it. Relevant considerations included the likely need for factual investigation, overlap with the substantive dispute, related proceedings, the connection with England, the strength of the challenge, and the quality of the arbitral tribunal and supervisory court (paras [85]-[86], [101]-[116]).
5. The factual issues concerning consumer status, targeting, and unfairness were unsuitable for summary determination. The New York arbitration and courts were capable of addressing English-law and public-policy arguments, and no procedural unfairness or inadequate supervision had been shown. All parts of the claim were stayed under s 9. The court also declared that it had no jurisdiction over the claim challenging the arbitration clause (paras [103]-[118]).