BEA HOTELS NV V BELLWAY LLC

[2007] EWHC 1363 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Cooke, 12 June 2007

Arbitration - Jurisdiction - Parties agreed to arbitrate - Defendant then commenced judicial proceedings in Israel - Whether defendant was in repudiatory breach of the arbitration agreement - Whether arbitrator had jurisdiction - Arbitration Act 1996, section 67

The parties entered into an agreement under which the parties were joint venturers for the purchase of shares in a privatised Romanian company. The agreement contained an arbitration clause. Negotiations had been conducted on behalf of the defendant by R, a major figure in the defendant. Disputes arose and the claimants commenced proceedings in Israel against R and others, but not the defendants. The defendant initiated arbitration proceedings in Israel but the Israeli court declined jurisdiction on the ground that the arbitration was to be in London under LCIA Rules. The defendant then sought the assistance of LCA to appoint an arbitrator,and an appointment was duly made. Subsequently R and the claimant commenced a second action in the Israeli courts against the claimant. The claimant asserted in the arbitration that the second proceedings amounted to a repudiation of the arbitration clause, but the arbitrator ruled that he retained jurisdiction. The claimant challenged the award under s 67 of the Arbitration Act 1996. Cooke J held that there was no intention by the defendant not to adhere to the arbitration clause, and that issues in Israel were outside its terms.