B V S

[2011] EWHC 691 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Flaux, 23 March 2011

Arbitration - Interim freezing injunction - Power of court under Arbitration Act 1996, section 44 - Whether power ousted by Scott v Avery clause - FOSFA Rules, clause 29

Clause 29 of the Federation of Oilseeds and Fats Associations Rules provides, by means of a Scott v Avery clause, that disputes are to be resolved by arbitration in London, and that: "Neither party hereto ... shall bring any action or other legal proceedings against the other of them in respect of any such dispute until such dispute shall first have been heard and determined by the arbitrators, umpire or Board of Appeal (as the case may be) in accordance with the Rules of Arbitration and Appeal of the Federation, and it is hereby expressly agreed and declared that the obtaining of an Award from the arbitrators, umpire or Board of Appeal (as the case may be), shall be a condition precedent to the right of either party hereto or of any person claiming under either of them to bring any action or other legal proceedings against the other of them in respect of any such dispute". Flaux J held that this clause precluded the grant by the court of a temporary freezing injunction over the assets of the respondent, because the power to make such an order - section 44 of the Arbitration Act 1996 - was subject to the contrary agreement of the parties, and the clause operated to oust both substantive and procedural orders by the court pending the making of an arbitration award. The fact that the FOSFA Rules did not themselves confer the power upon the arbitrators to grant an interim freezing injunction was irrelevant.