SOLEYMANI V NIFTY GATEWAY LLC

[2022] EWHC 773 (Comm), Queen’s Bench Division, Commercial Court, Clare Ambrose, sitting as a Deputy High Court Judge, 24 March 2022

Arbitration – Stay of proceedings – Consumer arbitration – Arbitration clause governed by New York law with New York seat – Jurisdiction – Arbitration Act 1996, sections 9 and 89 – Civil Jurisdiction and Judgments Act 1982, sections 15A to 15E – Consumer Rights Act 2015, section 62 and schedule 2

On 3 May 2021 the claimant (S) was successful in an online auction held by the defendant (NG) in which he purchased a blockchain-based non-fungible token associated with an artwork for US$650,000. S had opened an online account with NG under which the contract was governed by New York law and all disputes were to be “settled solely and exclusively by binding arbitration held in New York, New York, administered by JAMS [Judicial Arbitration and Mediation Services] ...”. On 20 July 2021 NG commenced a JAMS arbitration in New York seeking payment of the purchase price. On December the arbitrator ruled that S was a consumer and thus fell within the JAMS Policy on Consumer Arbitrations whereby certain standards of fairness were to be applied, and that the arbitration would go ahead in 2022. S commenced English proceedings arguing that the arbitration clause was unfair within section 62 of the Consumer Rights Act 2015 and that the agreement itself was void under the Gambling Act 2005. NG sought a stay of the proceedings under section 9 of the Arbitration Act 1996.