United Kingdom / 01 February 2011 / England and Wales, High Court / Claxton Engineering Services Ltd v. TXM Olaj-EsS Gazkutato KFT / 2010 Folio 0047
| Country | United Kingdom |
| Court | England and Wales, High Court |
| Date | 01 February 2011 |
| Parties | Claxton Engineering Services Ltd v. TXM Olaj-EsS Gazkutato KFT |
| Case number | 2010 Folio 0047 |
| Applicable NYC Provisions | II | II(3) | II(2) |
| Source |
[2011] EWHC 345 (Comm) | online: BAILII |
| Languages | English |
| Summary | Claxton Engineering Services Ltd (“Claxton”) contracted with TXM Olaj-ES Gazkutato KFT (“TXM”) for the manufacture and sale of oil well equipment. A dispute arose and Claxton initiated proceedings before the English High Court. TXM sought a stay of the proceedings under section 9 of the Arbitration Act 1996 (U.K.) (“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). TXM submitted that the parties had agreed to refer any dispute arising out of the parties’ contract to arbitration in Hungary. Claxton denied that any such agreement had been made and sought to invoke a clause in the contract bestowing exclusive jurisdiction on the English courts. The Court found in favour of Claxton and refused the stay. After the Court had handed down its judgment, TXM proceeded to bring arbitral proceedings before the Court of Arbitration attached to the Hungarian Chamber of Commerce and Industry. Claxton thereupon applied to the High Court for an injunction enjoining TXM from pursuing the arbitral proceedings, which was granted. In opposing the application, TXM referred the Court to Article II(3) NYC, requiring a court, when seized of an action in a matter in respect of which the parties have made an arbitration agreement (as defined in Article II(2)), at the request of one of the parties, to refer the parties to arbitration, unless it finds that the agreement is null and void, inoperative or incapable of being performed. The High Court granted the injunction. It observed that, consistent with the principle of compétence-compétence and the United Kingdom’s obligations under the NYC, anti-arbitration injunctions will generally only be granted in exceptional circumstances. The Court found, however, that there were exceptional circumstances in this case. In particular, it pointed to its previous decision that the contract was subject to the exclusive jurisdiction of the English courts and noted that, given that decision, the arbitral proceedings brought by TXM were in clear breach of contract. In those circumstances, it held that it would be vexatious and oppressive to allow the arbitration to continue. It also remarked that the invocation by TXM of Article II(3) NYC was misplaced, insofar as there was no question of there being a prima facie or arguable case that there was an agreement to arbitrate, in light of the Court’s finding that there was not. |
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