English court considers scope of arbitration clause when there are allegations of criminal activity

By Sarah McMurray

In the recent case of Interprods Ltd v De La Rue International Ltd, the English court rejected arguments challenging arbitral awards under sections 68 and 69 of the Arbitration Act 1996 on the basis that the tribunal lacked jurisdiction because the arbitration clause did not extend to allegations of serious criminal conduct.

The court held that even if a contractual dispute arises out of the criminal conduct of one of the parties, the ambit of an arbitration clause will not be restricted unless the parties have expressly stated that this should be the case.

The case also shows that where a party fails to give reasons as to why it cannot take part in hearings, it will not constitute a procedural irregularity if the tribunal takes fair decisions in its absence, especially where the applicants could not demonstrate that a significantly different outcome would have been achieved in their presence…

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