Kevin Osler v Marlene Osler & Ors
[2024] EWCA Civ 516
S3D Interactive, Inc v Oovee Limited
19 December 2022
[2022] EWCA Civ 1665
Court of Appeal
Two companies had a fight, and an arbitrator told one of them to pay money. That company refused, claiming the arbitrator had no right to tell them what to do. The court said the arbitrator's right to make the decision could be dealt with later, and the company still had to pay the money first.
Key Facts
- •Dispute between S3D Interactive, Inc. (Appellant) and Oovee Limited (Respondent) over rights and obligations arising from a video game license agreement.
- •License agreement contained an arbitration agreement under the LCIA Rules.
- •Oovee initiated arbitration, claiming royalties and breach of intellectual property rights.
- •Arbitrator issued a Security Order requiring S3D to provide security for potential awards.
- •S3D failed to comply with the Security Order and later claimed Oovee repudiated the arbitration agreement due to confidentiality breaches.
- •Arbitrator issued a Peremptory Order reiterating the security requirement.
- •S3D did not comply with the Peremptory Order and Oovee applied to the court under s. 42 of the Arbitration Act 1996 for enforcement.
- •S3D challenged the court's jurisdiction based on the alleged repudiation of the arbitration agreement.
- •The High Court judge granted the enforcement order.
- •Appeal concerned whether the court must determine the tribunal's jurisdiction before enforcing a peremptory order under s. 42.
Legal Principles
Kompetenz-Kompetenz: The arbitral tribunal may rule on its own substantive jurisdiction.
Arbitration Act 1996, s. 30; LCIA Rules, Article 23.1
Section 42 of the Arbitration Act 1996 empowers the court to enforce peremptory orders of the tribunal.
Arbitration Act 1996, s. 42
Court intervention in arbitration should be minimal, unless provided for in the Arbitration Act 1996.
Arbitration Act 1996, s. 1(c)
The court can support the arbitral process through various orders, even if the tribunal's jurisdiction is challenged.
Arbitration Act 1996, ss. 42, 70(6), (7)
A pending jurisdictional challenge does not automatically preclude a s. 42 order; the court's discretion considers various factors including the challenge's strength, the order's nature and the proceedings' stage.
Emmott v Michael Wilson & Partners (No2) [2009] EWHC 1 (Comm)
Outcomes
Appeal dismissed.
The court's jurisdiction to enforce a peremptory order under s. 42 of the Arbitration Act 1996 is not contingent on a prior determination of the tribunal's substantive jurisdiction. The court's interpretation aligns with the Act's structure regarding jurisdictional challenges, promoting efficient arbitration. The court’s decision supports the arbitral process, minimizes intervention, and prevents a recalcitrant party from using a jurisdictional challenge to obstruct proceedings.
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