Case No. CL-2019-000290

22.On the facts of this case, I am quite satisfied that the claim which Albion now brings – which is essentially concerned with establishing its entitlement to be paid the outstanding instalment of the purchase price, and not with the operation of the Escrow Agreement so as to realise the benefits of the security provided for that liability if established – does not fall within the Arbitration Agreement. I refer to the claim which Albion “now brings” because as originally formulated, Albion’s Particulars of Claim sought relief in the form of “a declaration that Albion is entitled to payment of the Escrow Monies”. However, to avoid any debate as to whether that relief fell within the ICC arbitration clause, Albion has confirmed that it does not pursue that claim at this stage. It is accordingly not necessary for me to determine whether that claim for declaratory relief would have been stayed. 23.I have reached the conclusion that EIGL is not entitled to a stay under s.9 of the Arbitration Act 1996 for the following reasons. 24.First, I agree with Blair J and Andrew Ang J that there is nothing particularly surprising in parties stipulating for different dispute resolution provisions in principal and security agreements, given the different purposes of those agreements, and the more limited scope of the latter. I consider it inherently more likely that the Arbitration Agreement in the Escrow Agreement was intended to address the security and other ancillary obligations created by that agreement, rather than to displace (at least so far as the outstanding instalment is concerned) the parties’ agreed choice of jurisdiction under the SpA for the purposes of determining whether EIGL is in fact under any liability to Albion. 25.Mr Morpuss QC submitted that it would be “absurd” if Albion was required to establish its entitlement to the amount due in one forum but might be forced to resort to another forum for the purpose of realising the security provided for that obligation. However, that is the position whenever the principal and security agreements in a transaction contain different dispute resolution provisions which, as Blair J noted, they frequently do and for good reasons. Further, while the amount paid into the Escrow Account is clearly the most obvious means of enforcing any judgment which Albion might obtain, it is far from Albion’s only option. In particular, Albion has security for the outstanding instalment in the form of a charge over 20% of the shares in Heritage. Further, in the event of a dispute, it was inherently likely that Albion might become entitled to recover a sum in excess of the Escrow Amount once interest and costs were taken into account. For these reasons, it would be wrong to approach the identification of the agreed forum for the determination of Albion’s debt claim under the SpA solely from the perspective of enforcement against the Escrow Amount. 26.Second, the language of the Arbitration Agreement – in particular its reference to “any dispute or difference …. arising out of or in connection with this letter (including any question regarding its existence, validity, interpretation, performance or termination)”, suggests that the focus of the clause is obligations created by the Escrow Agreement (“this letter”) rather than disputes as to the interpretation, performance or termination of the SpA. When the parties were contracting against a background in which the outstanding balance was due under the SpA and subject to the Jurisdiction Agreement, it is unlikely that they would have used a clause which took “this letter” as the fulcrum of the Arbitration Agreement if that agreement had been intended to extend to claims under the SpA. 27.Third, I agree with Lord Grabiner QC that clause 2.9, which provides that the payment into escrow is “without prejudice to… any other rights which Albion … may have under the SpA” tells against the suggestion that clause 6 of the Escrow Agreement is intended to remove Albion’s right under the SpA to take proceedings in the High Court. While I accept Mr Morpuss QC’s submission that it would be possible to construe this provision as applying only to non-ancillary obligations (and therefore as not extending to the choice of forum), it can nonetheless be said that clause 2.9 points away from any suggestion that the parties intended provisions in the Escrow Agreement to supplant potentially inconsistent provisions in the SpA. This is particulary the case given the width of the language used to preserve Albion’s prior entitlements – not simply “in respect of any and all claims arising as a result of EIGL’s alleged failure to comply with the terms of the [SpA]” but also “any other rights which Albion … may have under the [SpA] or otherwise”. 28.Fourth, the Escrow Agreement concerns only three of the six parties to the SpA. This factor itself suggests that the parties can only have intended the Arbitration Agreement to have a localised effect, in order to avoid the commercially unattractive position where claims between some of the parties to the SpA were subject to High Court jurisdiction, and other related claims under the SpA were subject to ICC arbitration. Adopting Hamblen LJ’s language in Trattamento, this is an outcome which sensible businesspeople are unlikely to have intended. 29.Finally, although this is a point which merits very limited weight, I also accept Lord Grabiner QC’s submission that if cause 6 of the Escrow Agreement was intended to provide a new agreed and exclusive mechanism for resolving all of the disputes, it is perhaps surprising that clause 2.7 provides that the parties are to “use reasonable endeavours promptly to agree an appropriate dispute resolution process to resolve the dispute”. 30.EIGL’s application for a stay having been rejected, it is necessary to turn to Albion’s application for summary judgment.