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Stockholm Arbitration Report (SAR)

Preview Page SAR 2004 - 1

INTRODUCTION

Both of these decisions of the English High Court concern the extension of contractual rights to parties who did not sign the contract which provided for arbitration. In the first, the court used the powers conferred by statute to permit a third party to access both the contractual obligations and the agreement to arbitrate. In the second, the court struck down the tribunal’s finding, based on the “group of companies” doctrine, that the contract was intended to create rights on behalf of third parties.

The judgments are commented jointly in observations by Michael E Davis, London, Sigvard Jarvin General Editor
(1) Approved Judgment by the High Court of Justice Queens Bench Division Commercial Court, on 4 February 2004, in Case No. [2003] Ewhc 2602 (Comm)

SUBJECT MATTER: Permit of a third party to access the arbitration agreement.

FINDING: Under the Contracts (Rights of Third Parties) Act 1999, (the “Third Parties Act”), a third party to a contract under which one party has promised to confer a benefit on that third party, may enforce that promise direct against the promisor. When the contract contains an arbitration clause, the third party shall for the purposes of the Arbitration Act 1999 be treated as a party to the arbitration agreement as regards disputes between the third party and the promisor.

PARTIES:
Claimant: Nisshin Shipping Co Ltd
Respondent: Cleaves & Company Ltd and Others