ASSIGNMENTS, ASSIGNEES AND THE BURDEN OF AN ARBITRATION CLAUSE
It is trite that only “benefits” but not “burdens” can be assigned. However, it is thought that the “burden” of arbitration agreements still “binds” assignees of choses in action which fall within their ambit, even where the assignee must have taken the assignment while ignorant of the arbitration agreement. In The Jay Bola, Hobhouse LJ explained why this is so by drawing an analogy with the equitable rule that equities arising between debtor/obligor and the assignor shall also bind the assignee. That explanation has been criticised. It has also been confused with the “principle of conditional benefit and burden” set out by Megarry V-C in Tito v Waddell (No 2). By examining the reasoning in The Jay Bola more deeply, its distinctiveness and consistency with the proposition that burdens cannot be assigned becomes clear.
ASSIGNMENTS, ASSIGNEES AND ARBITRATION CLAUSES