Factual and Procedural Background
The Defendant ("Company A"), a French engineering company involved in offshore oil and gas projects in Africa, applied for a stay of parts of a claim brought by the Plaintiff ("Company B"), a Panamanian company providing management and logistical services in the same industry. The dispute arose from longstanding contractual relationships governed by several Frame Agreements incorporating arbitration clauses. A disagreement over payments under one such agreement led the parties to enter into a Settlement Agreement in 2013, which terminated the Frame Agreements and included an exclusive jurisdiction clause for the Courts of England and Wales.
Company B alleges it was induced to enter the Settlement Agreement by fraudulent or negligent misrepresentations by Company A and claims entitlement to rescind the Settlement Agreement and recover unpaid sums and losses. Company A denies these allegations and contends that the Settlement Agreement supersedes prior arbitration agreements. Company A applied for a stay of the monetary claims under section 9 of the Arbitration Act 1996 on the basis that the claims fall within the scope of prior arbitration agreements. The court was tasked with determining whether the claims should be stayed in favour of arbitration or properly heard by the English court pursuant to the Settlement Agreement’s jurisdiction clause.
Legal Issues Presented
- Whether the monetary claims made by the Plaintiff fall within the exclusive jurisdiction clause of the Settlement Agreement or within the arbitration clauses of the prior Frame Agreements.
- Whether the arbitration agreements in the Frame Agreements remain operative or have been superseded and rendered inoperative by the jurisdiction clause in the Settlement Agreement.
- The proper construction and effect of competing dispute resolution clauses in settlement or termination agreements vis-à-vis prior arbitration agreements.
- Whether the court should grant a stay pursuant to section 9 of the Arbitration Act 1996 to refer the monetary claims to arbitration.
Arguments of the Parties
Defendant's Arguments
- The monetary claims arise out of or in connection with the Frame Agreements, which contain arbitration clauses requiring disputes to be referred to ICC arbitration seated in London.
- The claims are therefore subject to a mandatory stay under section 9 of the Arbitration Act 1996 unless the arbitration agreements are null, void, or inoperative.
- The jurisdiction clause in the Settlement Agreement (Clause 10) refers exclusively to disputes arising from the Settlement Agreement itself and does not extend to claims under the Frame Agreements.
- Commercial logic supports arbitration for technical disputes under the Frame Agreements, while the Settlement Agreement’s jurisdiction clause covers debt claims and disputes arising specifically from that agreement.
- Authoritative case law on competing jurisdiction clauses supports a careful, context-driven construction, which here favours the arbitration clauses surviving termination of the Frame Agreements.
Claimant's Arguments
- The monetary claims fall within the exclusive jurisdiction clause of the Settlement Agreement, which supersedes the arbitration agreements in the Frame Agreements.
- The Settlement Agreement expressly terminates and renders null and void the Frame Agreements, demonstrating the parties’ intention to rely solely on the Settlement Agreement’s jurisdiction clause.
- The claims are essentially for damages in deceit arising from misrepresentations related to the Settlement Agreement, thus properly within its scope.
- Legal authorities and commentators support the principle that dispute resolution clauses in settlement agreements typically supersede prior clauses to provide one-stop adjudication.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Mozambique v Privinvest [2023] UKSC 32 |
Two-stage process for stay applications under section 9 of the Arbitration Act 1996: identify substantive matters and determine if within arbitration agreement scope. |
Applied to assess whether monetary claims fall within arbitration agreements or Settlement Agreement jurisdiction clause. |
| Monde Petroleum v Westernzagros Limited [2015] 1 Lloyd's Rep 330 |
Dispute resolution clauses in settlement agreements generally supersede prior arbitration clauses to avoid fragmented adjudication. |
Held that the settlement agreement’s jurisdiction clause governed all disputes, superseding prior arbitration agreements; court followed this reasoning. |
| Fiona Trust & Holdings v Privalov [2007] UKHL 40 |
Presumption in favour of one-stop adjudication; parties intend all disputes to be resolved in a single forum. |
Reinforced the principle that settlement agreements with dispute clauses are likely intended to govern all related disputes. |
| C v D [2015] EWHC 2126 (Comm) |
Settlement agreements terminating prior contracts typically shift the centre of gravity of disputes to the settlement agreement’s jurisdiction clause. |
Supported the view that the settlement agreement’s exclusive jurisdiction clause applied to all related disputes. |
| Yegiazaryan v Smagin [2016] EWCA Civ 1290 |
Strong presumption that dispute resolution clauses in contracts resolving disputes under earlier contracts apply to all disputes arising out of the legal relationship. |
Confirmed that arbitration clause in later contract covered disputes under earlier agreements. |
| Deutsche Bank AG v Sebastian Holdings Inc [2010] EWCA Civ 998 |
Broad and purposive construction of jurisdiction clauses in a series of agreements, considering overall scheme and commercial context. |
Referenced to support contextual and commercially sensible interpretation of competing jurisdiction clauses. |
| AmTrust Europe Ltd v Trust Risk Group SpA [2015] EWCA Civ 437 |
Where multiple jurisdiction clauses exist, no presumption applies; construction depends on locating “centre of gravity” of the dispute. |
Used to argue that competing jurisdiction clauses must be carefully construed to identify which applies to the dispute. |
| BNP Paribas SA v Trattamento Rifuti Metropolitani SpA [2019] EWCA Civ 768 |
Competing jurisdiction clauses interpreted as exclusive to their respective subject matters if language and context permit. |
Supported the principle that jurisdiction clauses generally govern claims under their own contract, not others. |
| Sodzawiczny v Ruhan [2018] EWHC 1908 |
Consideration of fragmentation risk inherent in arbitration agreements and their consensual nature. |
Used to highlight the balance between upholding arbitration agreements and avoiding fragmented dispute resolution. |
| Unicredit Bank GmbH v RusChemAlliance LLC [2024] UKSC |
Caution against treating judicial summaries as statutory texts; importance of interpreting judgments in factual context. |
Supported the need for careful construction of jurisdiction clauses without over-reliance on generalized statements. |
Court's Reasoning and Analysis
The court began by acknowledging that the core issue was the proper construction of the competing dispute resolution clauses rather than applying any automatic principle of supersession. It recognised the authority of the Monde Petroleum case, which established that dispute resolution clauses in settlement or termination agreements are generally intended to supersede prior clauses to enable one-stop adjudication and avoid fragmented litigation.
Applying this reasoning, the court found that Clause 10 of the Settlement Agreement, which provides for exclusive jurisdiction of the English courts for any dispute arising out of or in connection with the Settlement Agreement, was broadly worded and expressly terminated and rendered null and void the prior Frame Agreements. This indicated an intention to supersede the arbitration agreements contained therein.
The court rejected the Defendant’s argument that the arbitration agreements survived termination based on commercial logic and the distinct nature of the disputes. It held that the claims in question, though relating to sums and losses under the Frame Agreements, were in substance claims for damages for deceit inducing the Settlement Agreement and thus fell within the Settlement Agreement’s jurisdiction clause.
Further, the court considered the two-stage test from Mozambique v Privinvest but concluded that even under that framework, the monetary claims were not arbitrable as they arose from the Settlement Agreement and the law of deceit, not directly from the Frame Agreements.
The court distinguished authorities cited by the Defendant that dealt with competing jurisdiction clauses in non-settlement agreements, emphasizing that settlement or termination agreements occupy a special category where the presumption of supersession is stronger.
Holding and Implications
The court dismissed the Defendant's application for a stay of the monetary claims under section 9 of the Arbitration Act 1996.
The court held that the monetary claims fall within the exclusive jurisdiction clause of the Settlement Agreement and that the prior arbitration agreements are inoperative for the purposes of the stay application. Consequently, the claims were properly brought before the English courts and will proceed there.
No broader precedent was established beyond affirming the application of existing principles regarding the construction of dispute resolution clauses in settlement agreements and the circumstances in which they supersede prior arbitration agreements.