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Fiona Trust & Holding Corp & Ors v Privalov & Ors

[2007] EWCA Civ 20

Court: Court of Appeal
Date of Judgment: 24.01.07

The appellant charterers appealed against the dismissal of their application to stay proceedings pending arbitration and the grant of an injunction in favour of the respondent shipowners staying the arbitration. The respondent shipowners had purported to rescind the arbitration contracts on the ground they had been procured by bribery.

Granting the appeal, the Court 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commercial contract should be liberally construed, and that the dispute as to whether the charters could be rescinded for bribery fell within the arbitration clause.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. Further, where there was a valid arbitration agreement, s9 of the Arbitration Act 1996 governed the position and proceedings could not be launched under s72.

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