Existence of the arbitration clause

Claxton Engineering Services Ltd v TXM Olaj-Es Gazkutato KFT [2010] EWHC 2567 (Comm), a decision of Gloster J, is yet another English authority for the proposition that the English courts should decide any dispute as to the existence or scope of an arbitration clause where the respondent seeks a stay of English proceedings in favour of arbitration.

Claxton Engineering: the jurisdictional issue

Claxton, an English company, agreed to manufacture engineering equipment for TXM, a Hungarian company, and to deliver it to TXM in Hungary for an additional price. TXM defaulted on payment, and Claxton issued a claim form seeking to recover £2,061,451.20 including interest on late payment. TXM contested the jurisdiction of the English court, and sought a stay of proceedings, on the strength of an arbitration clause set out in its general terms of contracting and specifying arbitration in Hungary. Claxton’s response was that, as a result of exchanges between the parties, certain amendments were agreed to TXM’s terms and conditions, including the deletion of the arbitration clause and its replacement with an exclusive jurisdiction clause.