HEIFER INTERNATIONAL INC V CHRISTIANSEN

[2007] EWHC 3015 (TCC), His Honour Judge Toulmin QC, 18 December 2007

Arbitration – Jurisdiction – Stay of proceedings – Whether parties entering into arbitration agreements in writing – Whether arbitration clause incoroporated into agreement – Whether arbitration agreement void under Unfair Terms in Consumer Contracts Regulations 1999 – Arbitration Act 1996, sections 5, 6, 9, 89-91 – Jurisdiction – Whether obligation in question to be performed in England – Brussels Regulation, Council Regulation 44/2001, article 5(1)

The claimant company purchased a house for use by a family. The claimant entered into arrangements under which the second defendant was employed to manage the removation of the house, and a number of sub-contractors – the third to fifth defendants – were employed to carry out works. All of the defendants were Danish. The claimant commenced proceedings to recover sums paid to the second defendant and also to seek damages from the thrid to fifth defendants for poor workmanship. The defendants sought to have the proceedings stayed on the ground that all of the relevant agreements contained arbitration clauses specifying arbitration in Denmark. The court, granting a stay under section 9 of the Arbitration Act 1996, held as follows. (1) The agreements contained arbitration clauses in writing, and in the case of the fifth defendant the arbitration clause had been validly incorporated from another contract. (2) The arbitration clauses were not avoided by the Unfair Terms in Consumer Contracts Regulations 1999 given that the claimant had received legal advice and there was nothing unfair about requiring the claimant to arbitrate in Denmark. (3) Had the point arisen, the court would have had jurisdiction over the first and second defendants under art 5(1) of the Brussels Regulation, because the obligation in question – project management – was to be performed in England.