Key Facts
- •Bugsby Property LLC and Bugsby Investments Limited (Claimants) sought court assistance to appoint an arbitrator under Section 18 of the Arbitration Act 1996.
- •The dispute arose from litigation funding agreements (LFAs) with Omni Bridgeway and Therium.
- •A Variation Agreement amended the Omni LFA, including dispute resolution.
- •A dispute exists over the enforceability of the LFAs and distribution of proceeds.
- •An LCIA arbitration is ongoing between Bugsby and Therium.
- •Omni commenced arbitration under Section 10.2 of the Omni LFA.
- •Claimants argued Clause 19.2 of the Variation Agreement provided for a King's Counsel arbitrator.
- •Omni contended Clause 19.2 wasn't an arbitration clause or that the LCIA arbitration should resolve the dispute.
Legal Principles
Section 18 of the Arbitration Act 1996 allows court intervention in appointment failures.
Arbitration Act 1996, Section 18
For Section 18 applications, a 'good arguable case' is required, meaning somewhat more than merely arguable but not necessarily more likely than not to succeed.
Silver Dry Bulk Company Limited v Homer Hulbert Maritime Company Limited [2017] EWHC 44 (Comm)
Whether a clause is an arbitration agreement depends on construction, considering the parties' intentions and the wording.
David Wilson Homes v Survey Services Limited (in liquidation) [2001] EWCA Civ 34
Commercial common sense and context are relevant in contractual interpretation.
Sara & Hossein Asset Holdings v Blacks Outdoor Retail [2023] 1 WLR 575
The court should consider the entire contract and the relationship between clauses, not simply one in isolation.
Langham House Developments Ltd v Brompton Securities Ltd [1980] 2 EGLR 117
A party’s option to choose between court proceedings and arbitration may be exercised unless waived.
NB Three Shipping Ltd v Harebell Shipping Ltd. [2004] EWHC 2001 (Comm) and The Law Debenture Trust Corporation plc v Elektrim Finance B.V. [2005] EWHC 1412 (Ch)
Outcomes
The Claimants' application was dismissed.
The court found the Claimants failed to establish a good arguable case that Clause 19.2 was an arbitration agreement. The language of Clause 19.2, in contrast to Section 10.2 and viewed within the context of the entire agreement, indicated a different, non-arbitral process. The court also held that even if Clause 19.2 were an arbitration agreement, the commencement of arbitration under Section 10.2 precluded the Claimants from invoking Clause 19.2.