ALBON V NAZA MOTOR TRADING SDN BHD (NO 4)

[2007] EWHC 1879 (Ch), Chancery Division, Mr Justice Lightman, 31 July 2007

Arbitration – Anti-arbitration injunction – Dispute under contract governed by English law – Defendant seeking stay in favour of arbitration in Malaysia – Claimant disputing validity of arbitration clause – English court ordering trial on validity of arbitration clause – Whether defendant to be restrained from proceeding with arbitration – CPR Parts 20(5) and 62

The parties entered into a motor vehicle distribution agreement governed by English law. The claimant commenced proceedings in England for sums overpaid by him under the agreement. The defendant applied for a stay of the proceedings on the ground that the parties had entered into an arbitration agreement for arbitration in Malaysia. The claimant asserted that his signature on the arbitration clause was a forgery. In earlier proceedings Lightman J ordered a trial on the question of the validity of the clause, and in the present proceedings the claimant sought an injunction to prevent the defendant from proceeding with the arbitration in Malaysia pending the outcome of the trial in England. Lightman J held that he had jurisdiction to grant the injunction in that service outside the jurisdiction could be ordered against the defendant on the grounds that the claimant’s action was related to a contract (under CPR 6.20(5)) and that independently of that the defendant had submitted to the jurisdiction of the English courts. The court also felt that it was appropriate to exercise its discretion in favour of the grant of the injunction, given the cost to A in defending two sets of proceedings and the fact that any delay in the arbitration would be relatively short because the English trial was pending