Less clear is the answer to a similar, but conceptually distinct, question. What law governs the issue of whether a non-party is bound by an arbitration agreement? This question arose in Lifestyle Equities CV v Hornby Street (MCR) Ltd,2 where a non-party was alleged to be bound by an arbitration agreement by virtue of having been assigned trademarks that were (allegedly) qualified by the arbitration agreement. It divided the Court of Appeal. The majority (Lewison LJ, with whom Macur LJ agreed) held that a court should apply the law governing the arbitration agreement to determine the issue of whether the non-party was bound. Snowden LJ dissented, reasoning that the law governing the trademarks should apply instead. This comment discusses both approaches. It argues that Snowden LJ’s approach is preferable, but proposes a way to defend the majority’s conclusion.

The essential facts were these. Two claimants, Lifestyle Equities (“LE”) and Lifestyle Licensing (“LL”), sued eight defendants in England. The claimants alleged that the defendants had infringed several English-registered trademarks relating to the Beverly Hills Polo Club logo (the “Trademarks”). The eighth defendant was a Californian entity named Santa Barbara Polo & Racquet Club (“SBPC”).

The Trademarks were originally owned by another Californian company, BHPC Marketing. A similar trademark dispute had arisen between SBPC and BHPC Marketing in the 1990s. That dispute resulted in a compromise under a settlement agreement (the “1997 Agreement”). The 1997 Agreement contained: