A new approach needs to be taken in arbitration clauses and the construction of jurisdiction in international commercial situations, the Court of Appeal has ruled in a landmark decision.
Court of Appeal judges Lord Justices Tuckey and Longmore and Lady Justice Arden held that a line should be drawn under the existing authorities and a fresh start made.
In the lead judgment of Fiona Trust & Holding Corporation v Yuri Privalov & Ors, Longmore LJ explained that any jurisdiction or arbitration clause in an international commercial context should be construed liberally.
He wrote: "The words 'arising out of' should cover every dispute except a dispute as to whether there was ever a contract at all."
He continued that it is no longer appropriate to draw fine distinctions between different general phrases of this kind, or to give the words 'under a contract' a narrow meaning.
Christopher Butcher QC of 7 King's Bench Walk and Philip Jones QC of Serle Court, instructed by partner Stuart Shepherd from Ince & Co, acted for Fiona Trust, while Nicholas Hamblen QC of 20 Essex Street led for Yuri under the instruction of Lawrence Graham partner Imogen Rumbold.