The High Court gave judgment in Noble Denton Middle East and another v Noble Denton International Limited [2010] EWHC 2574 (Comm) in May 2010, but the judgment text has only recently been made available.

The Defendants had applied to the court on the basis that there was no arbitration agreement between them and the Claimants. Further, they argued that as there were proceedings pending in the US relating to a claim by the Defendants and others against the Claimants, in respect of the same matters which the Claimants wished to have arbitrated, the English proceedings should be stayed. The issue between the Claimants and Defendants was the same both in London and the US: the Claimants argued that there was an arbitration agreement between the parties, and the Defendants argued that there was not. The Defendants accepted that there was a good arguable case that an agreement to arbitrate did exist, while the Claimants accepted that their case was only arguable.

The court had to decide two principal issues. The first was whether, in an application under s.18 Arbitration Act 1996 (the “Act”), it must be conclusively decided whether or not there was an arbitration agreement, or whether it is sufficient for there to be a good arguable case that such an agreement existed. Secondly, the court had to decide on the impact of the case going forward in the US and whether to stay the English proceedings on the basis of lis alibi pendens (i.e. that there was a dispute pending elsewhere).

The judge noted that a decision to arbitrate reflects the autonomy of the parties, and should only be overridden by the court in exceptional circumstances. Further, arbitrators are entitled to, and indeed must, decide the question of their own jurisdiction. The judge went onto refer to three “fall back statutory provisions” where the court may intervene (s.67, s.32 and s.72 of the Act), and stated that in the absence of these the party who denies the existence of an arbitration agreement still has the protection provided by the fact that an arbitrator can rule on his own jurisdiction. In these circumstances, it was held that for the purposes of s.18 it is sufficient for there to be a good arguable case that an arbitration agreement existed. In this particular situation, there was such a case and an order was therefore made for the appointment of a sole arbitrator.

As regards the stay, the crucial point was that the court was faced, sufficiently for that day’s purposes, with an English arbitration clause. Such a clause is equivalent to an exclusive jurisdiction clause, if not more so. Referring to Deutsche Bank AG v V Sebastian Holdings Inc [2009] EWHC 3069 (Comm), the judge said that there need to be exceptional circumstances, or strong or very strong reasons, for an exclusive jurisdiction clause to be overridden and this is also the case, indeed “probably all the more so”, where there is an arbitration clause. The judge did not think that such circumstances or reasons existed in this case, and so he refused the application for a stay.