KABAB-JI SAL (LEBANON) V KOUT FOOD GROUP (KUWAIT)

[2021] UKSC 48, Supreme Court, Lord Hodge Deputy President, Lord Lloyd-Jones, Lord Sales, Lord Hamblen and Lord Leggatt, 27 October 2021

Arbitration – Enforcement of award – Whether arbitration clause applied to contracting party’s parent company – Law applicable to arbitration agreement – Effect of entire agreement clause on arbitration agreement in the main contract – Effect of no oral modification clause – Whether judge should have made a final determination – Arbitration Act 1996, sections 103(2)(b) and 103(5)

Kabab-Ji SAL (KJ) entered into a 10-year Franchise Development Agreement (FDA) with the licensee Al Homaizi Foodstuff Co (AHFC). Article 1 of the FDA provided that the various documents and any amendments were to be regarded as integral and considered as a whole. Article 2 required the parties, in carrying out their obligations under the FDA, to act in accordance with good faith and fair dealing. By Article 14, any dispute between the parties was to be settled by arbitration in Paris under ICC Rules in the English language. Article 15 stated that “This Agreement shall be governed by and construed in accordance with the laws of England”. Article 24 stated that modifications were not binding unless in writing and on behalf of both parties.