FRESH START FOR INTERPRETATION OF ARBITRATION CLAUSES

Fiona Trust & Holding Corp v Privalov [2007] UKHL 40; [2007] 4 All ER 951

The House of Lords in Fiona Trust & Holding Corp v Privalov [2007] UKHL 40; [2007] 4 All ER 951 held that the time had come to make a fresh start to the interpretation of arbitration clauses. At least in the context of international arbitrations, courts should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of their relationship to be decided by the same tribunal. No longer should the scope of the clause depend on the use of words such as ‘arising out of’ or ‘arising under’ the contract. Instead the onus has been put on the party which wishes to exclude certain types of dispute from the scope of the arbitration clause to insert into the clause a form of words which makes it clear that certain issues have been excluded from the jurisdiction of the arbitrators.