Fiona Trust Holding Corp and Ors v Privalov and Ors
Abstract
20 October 2006 Morison J Commercial Court [2006] EWHC 2583 [2006] ArbLR 25 Arbitration proceedings--Parallel proceedings--Anti-arbitration injunction-- Allegations that consent to contracts affected by fraud and bribery--Whether arbitration agreement unenforceable (yes)--Arbitration Act 1996, s 7 Arbitration agreement--Interpretation--Whether claims that contracts rescinded on ground of fraud and bribery `arising out of ' or `under' contracts (no)--Whether arbitrator had jurisdiction over claims (no) Fraud and bribery affecting main contract impugns arbitration clause Fiona Trust owned FML, a company which was, in turn, owned by Sovcomflot, a Russian state-owned entity. Fiona Trust operated a commercial shipping fleet through a number of one-ship companies. Fiona Trust and others commenced proceedings against the defendants alleging that they paid and received bribes to procure business at the expense of Sovcomflot. Two proposed defendants in the proceedings had commenced arbitration in respect of charterparties for a number of vessels. It was contended that claims that the contracts had been rescinded on grounds of fraud and bribery did not fall within the arbitration agreement. The claimants applied to restrain the arbitration from continuing. Several of the defendants applied for a stay of the court proceedings pending an award in the arbitration. Held: Court proceedings would not