Alleged invalidity of the arbitration clause

In Kaye v Nu Skin UK Ltd [2009] EWHC 3509 (Ch) the claimant alleged that an arbitration clause in an English law contract providing for arbitration in Utah was not binding. In line with its usual practice, the English court refused to stay its own proceedings and chose to deal with the question of validity rather than refer it to the arbitrators.

Kaye: the facts

Nu Skin Enterprises Inc, which manufactured skincare products, was a US corporation based in Utah, which had a number of subsidiaries in different jurisdictions. NSUK was its UK subsidiary. NSUK marketed its products in the UK through distributors, arranged on a pyramid system, with commission being paid for direct sales to the public and also for the introduction of other distributors to the network.