Foreign arbitrations

The Arbitration Act 1996 is for the most part confined in its operation to arbitrations with their seats in England, Wales or Northern Ireland. One exception is s9 of the Act, under which judicial proceedings brought in contravention of an arbitration agreement are to be stayed. This principle is applicable irrespective of the seat of the arbitration and of the law governing the arbitration clause. If the existence or scope of the arbitration clause is in issue, and the clause is governed by some other law, it will be necessary for the English court to receive evidence as to the content of that other law so that the proper construction of the clause can be determined. Abu Dhabi Investment Co and others v H Clarkson & Co Ltd and others [2006] EWHC 1252 (Comm), a decision of Morison J, was such a case.

Abu Dhabi Investment: the facts

The claimants were three companies registered in the United Arab Emirates (UAE), all of which invested some US$81.6m in a joint venture company (ADCL) with another company N, which itself contributed US$78.4m. The joint venture was established by means of a memorandum of association executed in November 1999 and a shareholders agreement executed in July 2000. Each of these agreements contained an arbitration clause which provided: