Do you want to arbitrate or litigate? Is your contract clear about that?

Where parties agree to arbitrate their disputes and one party breaches that agreement by starting court proceedings, a court has power to uphold the arbitration agreement and ‘stay’ (i.e. transfer) the proceedings to be dealt with by arbitration unless the agreement is found to be ‘null and void, inoperative or incapable of being performed’.

In Kruppa v Benedetti & Anor, the claimant started court proceedings but the defendant argued there was a valid agreement to arbitrate. The defendants applied to have the court action stayed to arbitration under section 9 of the Arbitration Act 1996. In so doing, they relied on a ‘governing law and jurisdiction’ clause (which was identically drafted in each of the three relevant agreements in dispute) as being an ‘arbitration agreement’ for the purposes of section 6(1) of the act.

Section 6(1) states that ‘an “arbitration agreement” means an agreement to submit to arbitration present or future disputes, whether they are contractual or not’…

Click on the link below to read the rest of the Walker Morris briefing.

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