Chechetkin v Payward Ltd & Others
Key Contact: Aisha Wardell
Author: Martin Cox
Martin Cox tackles the significance of the recent High Court ruling in Chechetkin v Payward Ltd & Ors, where the defendants’ Part 11 CPR application was given a red card – the High Court deciding that the existence of an arbitration award, including one stating that the arbitrator has jurisdiction, does not typically strip the English and Welsh courts of jurisdiction. In other words, the courts retain the power to hear such cases.
In the case of Chechetkin v Payward Ltd and others  EWHC 3057 (Ch), the claimant was successful in defeating the defendants’ argument that the English and Welsh courts should not have jurisdiction over the claimant’s claims against them. This was despite the following:
- The claimant had accepted the defendants’ terms and conditions, which included an agreement to arbitrate disputes arising from the terms or the claimant’s use of the defendants’ services in San Francisco, California, under the JAMS arbitration rules.
- The Californian-based arbitrator had already made both a partial and final award against the claimant, finding that she had jurisdiction to hear the arbitration and that the defendants owed no liability to the claimant.
The decision is a reminder to companies that rely on standard terms and conditions with UK-based consumers that mandate arbitration of disputes overseas. Even a final arbitration award in their favour may not necessarily be the end of the matter, as separate court claims can still be brought in a different jurisdiction (even if the claimant may well face an uphill battle in succeeding in that court-based claim).
In this case, the claimant, a lay crypto trader who had also brought a separate claim in the High Court against the defendant cryptocurrency platform provider under the Financial Services and Markets Act 2000, successfully argued that his case fell under s.15B of the Civil Jurisdiction and Judgments Act 1982. This was because the proceedings related to a consumer contract where the consumer was domiciled in the UK, meaning that the mandatory arbitration requirements and exclusive jurisdiction clauses of the defendants’ terms and conditions were overruled. The High Court, therefore, had jurisdiction to hear the claimant’s claim.
The claimant also defeated the defendants’ argument that s.101 of the Arbitration Act 1996 (concerning the recognition and enforcement of New York Convention awards), coupled with the existence of both a partial and final award against the claimant in the Californian arbitration, meant that the High Court should decline jurisdiction. Mr Justice Miles offered six different reasons why he was not persuaded by this argument, concluding that the existence of an arbitration award, including one stating that the arbitrator has jurisdiction, does not generally deprive the English and Welsh courts of jurisdiction.
For further information on the issues discussed in this article, please get in touch with our Litigation Team.