Juridical Seat is Not Peripatetic

Dubai Islamic Bank PJSC v Paymentech Merchant Services Inc (TLR 24 November QBD)

The respondent, which was based in Texas, processed payments made pursuant to the VISA credit card system. A dispute between the parties, which originated from transactions occurring in Florida, went to arbitration. The award was in the respondent’s favour, as was an appeal. The applicant sought to challenge the decision under ss67-69 of the Arbitration Act 1996. Under paragraph 8.1 of the Arbitration Practice Direction supplementing Part 49 of the CPR, permission to serve an arbitration claim form out of the jurisdiction could only be granted where the arbitration award was made in the UK. Section 53 of the Act provides that where the seat of the arbitration was in the UK the award is treated as having been made there. Section 3 of the Act provides ‘the seat of the arbitration’ means ‘the juridical seat of the arbitration … determined … having regard to the parties’ agreement and all the relevant circumstances’. The respondent argued that the seat of arbitration was in the USA, not the UK, so there was no jurisdiction to grant permission. The relevant arbitration was clearly the appeal arbitration. The arbitral seat must be determined at the point at which the relevant arbitration began. In the present case that was when the applicant invoked the appeal process and the respondent submitted to it. Once an arbitration started and it had a seat, it could not be changed without the agreement of the parties. The submissions of both parties that the court could take the whole history of the arbitral process into account as relevant circumstances when determining the seat, and that its location should be somehow peripatetic, were contrary to the whole idea of a juridical seat. On the facts, the juridical seat was in California, not in England and Wales, and, therefore, the English court had no jurisdiction.