United Kingdom / 18 February 2009 / England and Wales, High Court / British Telecommunications Plc v. SAE Group Inc. / HT-08-336
| Country | United Kingdom |
| Court | England and Wales, High Court |
| Date | 18 February 2009 |
| Parties | British Telecommunications Plc v. SAE Group Inc. |
| Case number | HT-08-336 |
| Applicable NYC Provisions | II | II(3) |
| Source |
[2009] EWHC 525 | online: BAILII |
| Languages | English |
| Summary | SAE Group Inc. (“SAE”) contracted with British Telecommunications Plc. (“BT”) for the supply of certain equipment, software and services. Appendix 4 to the contract contained a clause providing for the appointment of an expert to arbitrate all disputes arising under the contract. Disputes arose and, on the application of SAE, an expert arbitrator was appointed by the Institution of Electrical Engineers. BT then applied to the English High Court for a declaration that the expert lacked jurisdiction to arbitrate the dispute, as there was no binding arbitration agreement between the parties. It relied (i) on the Court’s inherent jurisdiction and (ii) in the alternative, on the Arbitration Act 1996 (U.K.) (“the Act”), section 72 (providing that a person alleged to be a party to arbitral proceedings, but who takes no part in the proceedings, may question, inter alia, whether there is a valid arbitration agreement, or whether the tribunal is properly constituted) and section 32 (providing that the court may, on the application of a party to arbitral proceedings (upon notice to the other parties) determine any question as to the substantive jurisdiction of the tribunal). The High Court granted the declaration under its inherent jurisdiction. The Court observed that the question whether the application should be considered under its inherent jurisdiction or under the Act depended on whether there was an arbitration agreement, as defined by the Act. Accordingly, the Court reasoned that it was first required to determine whether, prima facie, there was such an agreement. In the present case, it found that there was no such agreement in the terms of Appendix 4 to the contract, which was only in draft form and not duly executed. Accordingly, it concluded that the Act was inapplicable. The Court reasoned, moreover, that even if it had reached the opposite conclusion—namely, that there was sufficient evidence of the prima facie existence of an arbitration agreement and that the Act was applicable—then it would have had power under sections 72 and 32 of the Act to consider the application and would also have exercised its jurisdiction under those provisions to grant the declaration. In the course of its reasoning, the Court drew an analogy to cases where one party to arbitral proceedings brought an application under section 9 of the Act (providing that the court shall, on an application by a party to an arbitration agreement against whom legal proceedings are brought in respect of a matter which, under the agreement, is to be referred to arbitration, stay the proceedings so far as they concern that matter, unless it is satisfied that the agreement is null and void, inoperative, or incapable of being performed) (c.f. Article II(3) NYC), seeking to stay an application brought by the other party to the arbitral proceedings under section 72 of the Act. In those cases, the Court noted, the courts have likewise had to determine the prima facie existence of an arbitration agreement, in which case a stay under section 9 of the Act had to be granted, in light of the mandatory “shall” in section 9(4) (giving effect to the United Kingdom’s obligations under the NYC). |
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