What can you do if you have agreed in your contract to arbitrate disputes in London, but your opponent has other ideas? Fortunately, the latest Court of Appeal case rides to the rescue.
The recent decision in Enka Insaat Ve Sanayi AS v. OOO “Insurance Company Chubb” & Ors  EWCA Civ 574 has provided a valuable authority for those businesses looking to hold their opponents to their agreement when it comes to dispute resolution.
Enka Insaat Ve Sanayi AS (Enka) is an international construction company involved in the construction of a power plant in Russia. Enka was a party to a contract containing an arbitration clause providing for disputes to be resolved by the International Chamber of Commerce (ICC) with the seat of the arbitration in London (though the clause was silent on what country’s law would apply).
Following a fire at the construction site, the insurer company, Chubb Russia Investments Limited (Chubb), had to pay-out an insurance claim amounting to USD $400 million. Chubb asserted that the fire was caused by Enka’s defective works and commenced proceedings against Enka, and 10 other parties, in a Russian court.
Enka responded by asking the English Court to order Chubb to desist from pursuing the Russian proceedings (because of the clause they had agreed in the contract which provided for arbitration in London).
The Court of Appeal agreed with Enka and it was granted an injunction over Chubb to stop it continuing with those Russian proceedings. It also found that as the parties had agreed that the seat of the arbitration should be in London, and as they had not agreed on what law should apply themselves, then English law would be applicable.
Why Does This Matter?
The case highlights:
- the need for parties to understand what they are agreeing to when they sign up to dispute resolution clauses in contracts.
- when disputes do arise, businesses should be careful to follow the agreed procedure – or else they could end up on the wrong side of an injunction and suffer all the wasted costs and delay that that might entail.
This is where expert advice from experienced litigators, at an early stage, is crucial.
If you would like to discuss any arbitration issues your business is facing or looking for arbitration disputes lawyers in London, then please contact our Head of Litigation, Mark Culbert us on 0789 487 3152 or at firstname.lastname@example.org.