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Fiona Trust & Holding Corp & Ors v Privalov & Ors

[2007] UKHL 40

Court: House of Lords
Date of Judgment: 17.10.07
Philip Jones QC, Justin Higgo, Jennifer Haywood

The appellant shipowners appealed against a decision granting the respondent charterers a stay of proceedings pending arbitration. The shipowners had issued proceedings seeking a declaration that they had validly rescinded charterparties on the ground that they had been procured by bribery.

Upholding the decision of the Court of Appeal, the House of Lords ruled that any jurisdiction or arbitration clause in an international commercial contract should be liberally construed, and that the dispute as to whether the charters could be rescinded for bribery fell within the arbitration clause. Under the doctrine of separability, the arbitration agreement was separable from the charterparty and the arbitration clause itself had not been impeached. There was no reason why an arbitrator could not decide whether the contract had been procured by bribery.

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