England and Wales High Court of Justice, 26 July 2018, Franek Jan Sodzawiczny v. Andrew Joseph Ruhan, Gerald Martin Smith, Dawna Marie Stickler, Simon Nicholas Hope Cooper and Simon John McNally, [2018] EWHC 1908 (Comm)

In 2014, the parties entered into Confidential Settlement Deed (“Deed”) following previous commercial disputes. The Deed contained an arbitration clause providing for an LCIA arbitration in London and broadly-worded release and settlement provisions. In 2018, the Forth and the Fifth Defendants (Simon Nicholas Hope Cooper and Simon John McNally) initiated an LCIA arbitration against Mr Sodzawiczny under the arbitration clause contained in the Deed. They applied for the expedited formation of an LCIA arbitral tribunal pursuant to Article 9A of the LCIA Rules, which allows for such a procedure in cases of “exceptional urgency”. This resulted in an award.

The High Court of Justice examines, inter alia, whether it shall grant a stay of proceedings under section 9 of the Arbitration Act 1996 (“the Act”). It focuses on Section 9(1) concerned with a “matter which under the agreement is to be referred to arbitration”. For the purposes of this provision, a two-tier analysis shall be conducted: the judge has to determine first what the matter or matters are in respect of which the court proceedings have been brought and then determine in respect of each such matter whether it falls within the scope of the arbitration agreement upon its true construction. The matter within Article 9(1), according to the High Court of Justice, means “any issue which is capable of constituting a dispute or difference which may fall within the scope of an arbitration agreement”. In the present case, the High Court of Justice finds that all the proceedings against the Fourth and Fifth Defendants are in respect of matters within the scope of the arbitration agreement in the Deed. Consequently, it grants a mandatory stay under section 9 of the Act against these Defendants.

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