Key Facts
- •Barclays Bank PLC (Claimant) and VEB.RF (Respondent) entered into a currency swap agreement governed by English law and containing an arbitration agreement with a jurisdiction clause.
- •The agreement included an option for Barclays to require court resolution within 14 days of arbitration request.
- •VEB commenced proceedings in the Moscow Court, breaching the agreement.
- •Barclays obtained anti-suit and anti-enforcement injunctions.
- •VEB then initiated LCIA arbitration, leading to Barclays invoking its right to court resolution.
- •The Arbitrator granted permission for Barclays to apply to the court under Section 32 of the Arbitration Act 1996.
- •Barclays sought a declaration that the arbitral tribunal lacked jurisdiction and an amendment to the anti-suit injunction.
Legal Principles
Section 32(2) of the Arbitration Act 1996 allows court determination of jurisdictional issues with arbitral tribunal permission, subject to threshold conditions: substantial cost savings, no undue delay, and good reason.
Arbitration Act 1996, Section 32(2)
Section 32 is a derogation from Section 30, which allows tribunals to decide their jurisdiction; Section 32(2) restricts court intervention.
Arbitration Act 1996, Sections 30 and 32
The likelihood of a Section 67 challenge (challenging the tribunal's jurisdictional decision) and resulting cost duplication is a material factor under Section 32(2)(b).
Armada Ship Management (S) Pte Ltd v Schiste Oil and Gas Nigeria Ltd [2021] EWHC 1094 (Comm)
A reasoned tribunal decision granting permission under Section 32(2) is a material consideration.
Armada Ship Management (S) Pte Ltd v Schiste Oil and Gas Nigeria Ltd [2021] EWHC 1094 (Comm)
The court is not a rubber stamp; it examines the issue afresh, giving appropriate weight to the tribunal's decision.
Case Law
Tribunal consent is not sufficient reason for court jurisdiction; however, a reasoned ruling is a good reason.
VTB Commodities Trading v Antipinsky Refinery [2019] EWHC 3292 (Comm)
Outcomes
The court held that all three threshold conditions under Section 32(2)(b) were met.
The application was made without delay; a Section 67 challenge was highly probable, leading to substantial cost savings by court determination; and good reasons existed due to efficiency, finality, urgency (as per contract), and potential enforcement difficulties.
The court will determine the jurisdictional issue.
Satisfying the threshold conditions under Section 32(2)(b) of the Arbitration Act 1996.