Clifford Chance

Searching for gravity: High Court applies Fiona Trust presumption in a multi-contract situation

18 February 2016

As the House of Lords (as it then was) famously held in Fiona Trust & Holding Corporation v Privalov,(1) when construing an arbitration agreement to ascertain whether a dispute falls within its scope, the applicable presumption is whether the parties, "as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered… to be decided by the same tribunal".(2) Several cases have since considered whether the presumption also applies in multi-contract situations where contracts contain different and potentially inconsistent arbitration agreements.

In some cases, the presumption has been applied to elucidate parties' intention that the arbitration provisions in one agreement also capture disputes under another agreement. However, the Court of Appeal in Trust Risk Group SpA v AmTrust Europe Ltd(3) recently found otherwise, holding that instead of applying a presumption, a carefully and commercially minded construction of the agreements at hand is required.

C v D1, D2 and D3(4) concerned an application to set aside an arbitral award on the grounds that the tribunal had no substantive jurisdiction and that serious irregularity during the proceedings had caused injustice (Sections 67 and 68 of the Arbitration Act 1996). The court rejected the application on both grounds. Upholding the tribunal's own finding of jurisdiction, the court applied the Fiona Trust presumption and determined that the arbitration agreement at the centre of gravity of the parties' dispute should apply.

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