Court of Appeal has Jurisdiction to Hear Appeal from Decision under Section 9 of the Arbitration Act 1996 Question whether there was Binding Contract is for Tribunal to Decide

United Kingdom
CommentaryDecisionBackgroundInco Europe Ltd and Others -v- First Choice Distribution and Others (CA), [1998] All ER (D) 433, NLD October 5 1998

Commentary

The decision raises two main points of interest. First, the Court of Appeal found that because a court decision granting or refusing a stay of court proceedings in favour of arbitration under section 9 is an interlocutory decision, a right of appeal lies to the Court of Appeal, provided leave to appeal is granted either by the Judge or by the Court of Appeal. While section 9 of the Arbitration Act 1996 does not expressly provide for a right to appeal, it does not restrict rights of appeal pursuant to other enactments, namely here under the Supreme Court Act 1981. It may, however, be argued that section 1 of the Arbitration Act 1996 provides that "the court should not intervene except as provided in this part" and that section 9 does not provide for a right to appeal. Accordingly, the intention may indeed have been to remove such rights of appeal as have previously existed.

Secondly, the question arose whether there was a valid and binding contract at all. This was found to be an issue for the tribunal rather than for the Court to decide because the parties had agreed to arbitrate their disputes.

Decision

The Court of Appeal ruled as a matter of construction, allowing the appeal, that the Arbitration Act 1996 did not remove the right to appeal from the decision of a lower court or Judge under section 9 of the Act provided that leave to appeal was obtained either from the Judge or from the Court of Appeal. While section 9 did not expressly provide for a right of appeal, such jurisdiction existed under the Arbitration Act 1975 section 107. Paragraph 37 of Schedule 3 to the Act contained certain’ consequential amendments' to the Supreme Court Act 1981 but removing the jurisdiction of the Court of Appeal to entertain an appeal would not have been a 'consequential amendment' and the 1996 Act was not intended to change the law. The effect of the amendment to the 1981 Act was only to give effect to the restrictions in the 1996 Act on rights to appeal. If a right to appeal was not restricted or excluded by Part I of the 1996 Act then the right of appeal remained. The Court of Appeal accordingly had jurisdiction to entertain the appeal. It also upheld the Fenex Arbitration clause which it interpreted as requiring application of the CMR Convention.

Background

The plaintiff brought court proceedings for damages for loss of a consignment being carried From Amsterdam to Hereford. The third defendant invoked the arbitration clause contained in the FENEX terms of the Netherlands Association for Forwarding and Logistics and applied for a stay of proceedings under section 9 of the Arbitration Act 1996. The Judge held that the arbitration clause was void and invalid because it offended against the CMR Convention and refused a stay. He also refused leave to appeal on the ground that the Arbitration Act 1996 had removed the Court of Appeal’s jurisdiction to hear such appeals.

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