Soleymani v Nifty Gateway LLC
| Jurisdiction | England & Wales |
| Neutral Citation | [2022] EWHC 773 (Comm) |
| Year | 2022 |
| Court | Queen's Bench Division (Commercial Court) |
2022 March 1; 24
Conflict of laws - Contract - Arbitration clause - Dispute arising in relation to bid made by claimant in auction held on defendant’s online platform - Defendant bringing arbitration proceedings in New York against claimant pursuant to arbitration clause contained in platform’s terms of use - Claimant domiciled in England asserting statutory right as consumer in consumer contract to be sued in English courts and seeking declaration to that effect - Right only applying if proceedings within allocation of jurisdiction provisions in EU Regulation - Proceedings having as sole subject matter validity of arbitration clause excluded from Regulation - Whether claimant’s claim within exclusion - Whether court having jurisdiction to determine claim for declaration -
The claimant individual, domiciled in England, took part in an auction held on the defendant’s online platform and bid for an item. The terms of use of the platform contained an arbitration agreement providing for disputes to be resolved in arbitration in New York applying New York law. Upon emergence of a dispute between the parties related to the claimant’s bid, the defendant commenced a New York arbitration. The claimant commenced English proceedings for a declaration that the arbitration clause was unenforceable on the ground that the contract between him and the defendant was a consumer contract for the purposes of the Civil Jurisdiction and Judgments Act 1982F1 and the Consumer Rights Act 2015, and, since he was consumer, (1) under section 15B of the 1982 Act he had a right to sue and be sued in the courts of the place where he was domiciled, and (2) under the 2015 Act the arbitration clause, which the claimant contended was an unfair term, was not binding on him. The defendant applied for a declaration that the court had no jurisdiction over the claimant’s claim because the 1982 Act expressly provided that the jurisdictional provisions relating to consumer contracts in section 15B only applied if the proceedings were within the scope of Parliament and Council Regulation (EC) No 1215/2012F2, and article 1(2)(d) of the Regulation excluded from its scope proceedings to determine the existence and validity of an arbitration agreement.
On the application—
Held, granting the application, that there was no basis to suggest that the legislature had intended the Civil Jurisdiction and Judgments Act 1982 to override the long-established exception in Regulation No 1215/2012 for arbitration, nor was there any basis in the wording of the Regulation or in the authorities in which the Regulation had been applied for an exception to the arbitration exception in circumstances where a claim was based on consumer legislation and would otherwise fall within the scope of the Regulation; that the claims under the 1982 Act and the Consumer Rights Act 2015 had as their sole subject matter the validity of the arbitration clause and were therefore within the arbitration exception and outside section 15B; and that, accordingly, the defendant was entitled to a declaration that the court had no jurisdiction in relation to the claim for a declaration that the arbitration clause was not binding on the claimant (post, paras 56, 57–59, 60, 61, 118).
The following cases are referred to in the judgment:
A v B
Bitar v Banque Libano-Française SAL
Brownlie v Four Seasons Holdings Inc
Cavendish Square Holding BV v Makdessi
Enka Insaat ve Sanayi AS v OOO Insurance Company Chubb
Golden Ocean Group Ltd v Humpuss Intermoda Transportasi Tbk Ltd (The Barito)
Goldman Sachs International v Novo Banco SA
JSC Aeroflot Russian Airlines v Berezovsky
Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV
Marc Rich & Co AG v Società Italiana Impianti PA (The Atlantic Emperor)
Mylcrist Builders Ltd v Buck
Navigation Maritime Bulgare v Rustal Trading Ltd (The Ivan Zagubanski) [
Pammer v Reederei Karl Schlüter GmbH & Co KG
Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Association Co Ltd (The Hari Bhum)
West Tankers Inc v Allianz SpA (formerly RAS Riunione Adriatica di Sicurtà SpA) (The Front Comor)
Zealander & Zealander v Laing Homes Ltd (
The following additional cases were cited in argument or referred to in the defendants’ skeleton argument:
AU v Reliantco Investments Ltd
Al-Naimi (trading as Buildmaster Construction Services) v Islamic Press Agency Inc [
Bank of Tokyo-Mitsubishi Ltd v Baskan Gida Sanayi VE Pazarlama AS
C v D
Express Newspapers plc v News (UK) Ltd [
ING Bank NV v Banco Santander SA
Twinsectra Ltd v Lloyds Bank plc
APPLICATION
By a demand for arbitration form dated 20 July 2021, the defendant, Nifty Gateway LLC, a Delaware company, commenced an arbitration against the UK-domiciled claimant, Mr Amir Soleymani, in New York under the auspices of the Judicial Arbitration and Mediation Services seeking payment of the sum said to be due for the claimant’s winning bid in an auction held on the defendant’s online platform between 30 April and 2 May 2021 for a blockchain-based non-fungible token associated with an artwork.
By a claim form issued on the same date in the Queen’s Bench Division, the claimant brought a claim against the defendant seeking a declaration that: (1) the arbitration clause in the defendant’s terms of use relied upon by the defendant was unfair and not binding on him pursuant to section 62(1) and (4) of the Consumer Rights Act 2015; (2) the arbitration clause was ineffective and not binding on him because as a consumer in a consumer contract under section 15B(3) of the Civil Jurisdiction and Judgments Act 1982 he could only be sued in the courts of the part of the United Kingdom where he was domiciled, namely England; and/or (3) any contract entered into by him arising from the placing of his bid in the auction was void ab initio for illegality under the Gambling Act 2005.
By an application notice issued on 25 October 2021, the defendant applied for an order under CPR Pt 11 declaring that the court had no jurisdiction or would not exercise its jurisdiction, alternatively an order staying the proceedings under CPR r 3.1(2)(f) and/or section 9 of the Arbitration Act 1996. In relation to the jurisdiction question, the defendant contended that the claimant’s claims fell within the arbitration exception in article 1(d) of Parliament and Council Regulation (EU) No 1215/2012 and therefore section 15B did not apply pursuant to section 15A(2); alternatively, that the claimant could not establish to the requisite standard that the parties were parties to a “consumer contract” under section 15B(2) given his stance in the concurrent arbitration and/or because he could not establish that the defendant directed “commercial or professional activities to the United Kingdom” under section 15E(1)(c)(ii).
The facts are stated in the judgment, post, paras 1, 7–14.
Andrew Feld (instructed by
Angeline Welsh and Ian MacDonald (instructed by
The court took time for consideration.
24 March 2022. CLARE AMBROSE handed down the following judgment.
Introduction1 The claimant, Mr Amir Soleymani, took part in an auction held on the defendant’s online platform between 30 April 2021 and 2 May 2021 and placed a bid for a blockchain-based non-fungible token (also known as an NFT) associated with an artwork by the artist known as Beeple titled “Abundance”. His claim in these proceedings is for declaratory relief relating to the contractual basis of that participation.
2 The issue for me to decide is whether the English court should decline jurisdiction over the claimant’s claim or stay the proceedings. The defendant has disputed jurisdiction and the matter before me is the hearing of its application for: (a) an order under CPR Pt 11 declaring that the court has no jurisdiction or will not exercise its jurisdiction; or (b) an order staying the proceedings under CPR r 3.1(2)(f) and/or section 9 of the Arbitration Act 1996 (“the Arbitration Act”).
Procedural background3 On 9 September 2021 the claimant commenced these proceedings...
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Amir Soleymani v Nifty Gateway LLC
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...s. 22) giving a right without notice to terminate for any reason at any time with no liability. (125) Soleymani v. Nifty Gateway LLC [2022] EWHC 773 (Comm): (126) The pseudonym of Mike Winkelmann, creator of the famous $69 million work, Everydays: the First 5000 Days: see p. 97 above. (127)......