S3D v Oovee [2022] EWCA Civ 1665
This was an appeal in an arbitration claim. The appellant and respondent were parties to an arbitration conducted under LCIA Rules, where Oovee’s principal claim was for unpaid royalties under a licence agreement relating to sales of a successful video game. In the arbitration, Oovee obtained an order that S3D give a bank guarantee or deposit with the LCIA the sum of US$10,902,576, as security for any future arbitration award issued in favour of Oovee, on the ground S3D had been dissipating assets. S3D failed to comply with that order and so Oovee sought and obtained a peremptory order from the tribunal in the same terms. Again, S3D did not comply.
Having obtained permission from the tribunal, Oovee sought an order from the Commercial Court under s. 42 of the Arbitration Act 1996 that S3D comply with the peremptory order of the tribunal. Butcher J granted that order in a judgment ([2022] EWHC 2949 (Comm)) in which he also dismissed S3D’s jurisdictional challenge under s. 67 of the 1996 Act. The Judge decided to grant the s. 42 order notwithstanding the existence of S3D’s pending challenge to the jurisdiction of the arbitral tribunal, which was based on the allegation that Oovee had committed a repudiatory breach of the arbitration agreement by disclosing certain arbitration documents and information about the arbitration to third parties.
S3D were granted permission to appeal Butcher J’s s. 42 order on the single ground that, when considering whether to make an order under s. 42, the court must investigate and be satisfied of the jurisdiction of the arbitral tribunal over the substantive dispute referred to it before making such an order. The Court of Appeal dismissed the appeal. S. 42 could not be interpreted so as to contain such a requirement. Such an interpretation was not supported by the section’s wording and was inconsistent with both the purpose of s. 42, namely to support the arbitral process, and the wider principles in s. 1 of the 1996 Act.
Chris Aikens appeared as sole counsel for the successful Respondent.