ACCENTUATE LTD V ASIGRA INC

[2009] EWHC 2655 (QB), Queen's Bench Division, Mr Justice Tugendhat, 30 October 2009

Arbitration - Agency - Agreement governed by Ontario law - Obligation to go to arbitration in Ontario - Arbitrators applying Ontario law and dismissing agent's claim for compensation - Whether arbitration clause binding - Permission for service outside the jurisdiction - Commercial Agents (Council Directive) Regulations 1993, regulations 2, 17 and 19 - Definition of "agent" - CPR 6.20 - Whether proceedings were to be stayed - Arbitration Act 1996, section 9

The claimant distributor entered into a Master Reseller Agreement (MRA) with the defendant licensor (a Canadian company), under which the Distributor was to distribute the licensor's software products. The MRA was governed by the law of Ontario and subject to arbitration in Toronto. The defendant gave notice to terminate the agreement on 13 November 2006, and the claimant stated that it would seek compensation under regulation 17 of the Commercial Agents (Council Directive) Regulations 1993. The defendant obtained an award in the arbitration under which the licensor was held to be liable for certain losses, but there was no award for compensation under the Regulations. The claimant commenced proceedings in England seeking compensation, and sought permission to serve the defendant outside the jurisdiction. Tugendhat J made an order granting permission. (1) There was a serious question to be tried as to whether the claimant was an "agent" within regulation 2(1) of the Regulations, in that it provided hardware as well as software. (2) There was a good arguable case that regulation 19 of the Regulations prevented the parties from contracting out of regulation 17, so that the arbitration clause was inoperative or incapable of being performed within section 9(4) of the Arbitration Act 1996 so that the proceedings were not subject to a mandatory stay. (3) The dispute was governed by English law and the contract was broken in England - the court thus had jurisdiction under CPR 6.20 to give permission for service out.