Emmott v Michael Wilson and Partners Ltd
| Jurisdiction | England & Wales |
| Judge | MR.JUSTICE TEARE,Mr. Justice Teare |
| Judgment Date | 06 November 2008 |
| Neutral Citation | [2008] EWHC 2684 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2008 Folio 1094 |
| Date | 06 November 2008 |
[2008] EWHC 2684 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
MR.JUSTICE TEARE
Case No: 2008 Folio 1094
Anthony Boswood QC and James Drake (instructed by Holman Fenwick and Willan) for the Claimant
Michael Black QC and Ian Meakin (instructed by Michael Robinson) for the Defendant
Approved Judgment
Hearing dates: 3 November 2008
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This is an application by the Claimant for an order pursuant to section 67 of the Arbitration Act 1996 challenging an award of an arbitration tribunal as to its substantive jurisdiction. The Defendant says that no such order should be made because the decision which is sought to be challenged is not an award as to the tribunal's substantive jurisdiction. If, however, the decision is an award the Defendant says that the tribunal had the necessary substantive jurisdiction. In response the Claimant says that the Defendant is not able to take the point that the decision is not an award. There are therefore three issues before the court as follows:
i) Is the Defendant able to argue that the decision of the tribunal is not an award as to its substantive jurisdiction ?
ii) If so, is the decision of the tribunal an award as to its substantive jurisdiction ?
iii) If so, did the tribunal have substantive jurisdiction to make the award ?
The material events
The Claimant provides legal services in Kazakhstan. Mr. Michael Wilson is a director and shareholder of the Claimant. The Defendant was a partner in the English firm of solicitors, Richards Butler. By an Agreement dated December 2001 between the Claimant and the Defendant it was agreed that the Defendant would join the Claimant as a director and shareholder. Their strategy was to create the leading independent legal and business consultancy in Kazakhstan. It was agreed that in effect the Claimant and the Defendant would function and operate as a quasi-partnership and that the parties would have and observe the usual partnership obligations and duties to each other. The Defendant was to have a 33% profit sharing interest. Clause 5.2 provided as follows:
“This Agreement shall be governed by and interpreted in accordance with the laws of England and Wales and all and any disputes shall be referred to and subject to arbitration in London before a tribunal of three arbitrators with one arbitrator to be appointed by each Party and the chairman of the tribunal to be appointed by the president of the Law Society.”
The Agreement came to a premature end. An arbitration was commenced by the Claimant pursuant to the provisions of clause 5.2. The Defendant counterclaimed against the Claimant. The arbitration hearing is due to commence on 10 November 2008.
On 23 July 2008 the Defendant served an amended counterclaim in which reliance was placed on an agreement or understanding made in or around February 2005 between Mr. Wilson, on his own behalf and on behalf of the Claimant, and the Defendant. In the original counterclaim the Defendant had claimed relief based upon the terms of the December 2001 agreement. In the amended counterclaim he claimed relief based upon the terms of the February 2005 agreement. The Defendant sought permission to make that amendment. That application was opposed by the Claimant in written submissions dated 4 July 2008. Three points were taken. The amendment was late, the new counterclaim was not within the jurisdiction of the tribunal and the amendment was hopelessly vague and unparticularised. The Defendant put in written submissions in response dated 14 July 2008. It was said that the amended counterclaim was within the arbitration clause and therefore the arbitrators had jurisdiction to consider it. A reply to those written submissions was put in on behalf of the Claimant dated 16 July 2008.
The tribunal considered the parties' written submissions and issued a decision entitled “Sixth Procedural Order” on 24 July 2008. It was signed by one of the arbitrators, Christopher Berry, on his own behalf and on behalf of the other two arbitrators Ms. Valerie Davies and Lord Millett. The decision dealt not only with the application to amend the counterclaim but also with an application by the Defendant for specific disclosure (which, it is said, relates to the amended counterclaim).
The arbitrators said that they took the view that the dispute raised by the amended counterclaim fell within the arbitration clause and that although the application was late it was not so late or embarrassing that it should not be allowed. The application to amend was accordingly granted. An order for specific disclosure was also made.
Following service of the application notice for an order from the Court pursuant to section 67 of the Arbitration Act 1996 the Defendant applied for an order from the tribunal pursuant to section 67(2). That sub-section provides as follows:
“The arbitral tribunal may continue the arbitral proceedings and make a further award while an application to the court under this section is pending in relation to an award as to jurisdiction.”
A skeleton argument in support of the application before the tribunal prepared by counsel for the Defendant (not the same counsel who represented the Defendant before me) described the case as a “classic case” for an order under section 67(2) of the Act. A hearing took place before the arbitrators and on 12 September 2008 the tribunal issued a decision entitled Seventh Procedural Order. The tribunal made a
“Continuation Order …..under section 67(2) in relation to the amended Defence and Counterclaim. Any Defence to the Amended Defence and Counterclaim is to be served by 12 noon on 24 September 2008 or the Claimant is to be debarred from defending the claims in the amendments to the Counterclaim. Any such pleading is without prejudice to the Claimant's contention that such amendments are outside the ambit of the Arbitration and should be struck out by the High Court.”
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