KB-2025-001929 - [2025] EWHC 2966 (KB)

This brings me to the defendant’s application to stay Orange’s claim against it in this court. This is a matter I have carefully considered. I have found further assistance in Al-Naimi. Waller LJ said at 651:

“But a stay under the inherent jurisdiction may in fact be sensible in a situation where the court cannot be sure of those matters but can see that good sense and litigation management makes it desirable for an arbitrator to consider the whole matter first. If, for example, the court thinks that it would take a trial with oral evidence to decide whether matters the subject of the action were actually within the scope of an arbitration clause, but that it was likely that on detailed inquiry the subject matter of the action will be found to be covered by the arbitration clause; and particularly if an arbitration was bound to take place in relation to some issues between the parties, and where having explored the details necessary to found jurisdiction, it would only be a short step to deciding the real issues, it will often be sensible for the court not to try and resolve that question itself but leave it to the arbitrator.”

Having assessed the totality of the relevant evidence in detail, I conclude that it is likely that the defendant’s overpayment claim would fall within the scope of the arbitration agreement. I also think it highly likely, always alive to the possibility that further evidence may be filed which alters the overall picture, that the arbitrator will find that there is a valid arbitration agreement. I emphasise that this is not to intrude into the arbitrator’s decision-making. The decision about her substantive jurisdiction, which rests in large part on determining the question of Bill’s authority, is exclusively a matter for her. Nothing in this judgment provides later support in either direction.

For the sake of good order, and to avoid duplication, it seems to me that Orange’s claim should be stayed behind the determination of the arbitral dispute. Let me be clear about the basis of the stay. For a section 9 stay, it must be established that there is a valid arbitration agreement (Albont/a NA Carriage Co. v Naza Motor Trading [2007] EWHC 665 (Ch) at para 14, per Lightman J). The whole purpose of referring the determination of Bill’s authority to the arbitrator is to ascertain precisely this question. However, the court retains case management powers and its inherent jurisdiction, the former grounded in the latter.

Therefore, I grant an interim stay under the court’s inherent jurisdiction set out in CPR 3.1(2)(g). The obvious advantages of such an interim stay are that this course reduces or removes the risk of duplication, inconsistent decision-making and the incurring of unnecessary costs. Both parties for differing reasons have made that point to the court. Further, the arbitral timetable is set down with admirable clarity. The arbitrator envisages an award being issued in February 2026. This is a prompt and proportionate timescale. If the arbitrator determines that she lacks jurisdiction, the claimants’ claims can be swiftly listed back in this court for case management directions. I would add that the defendant confirmed in oral submissions what is contained in Mr Bharucha’s witness statement at para 60:

“Shein confirms – and would be prepared to formally undertake should the Court so require it – that it would not object to IT Way pursuing claims against it in the arbitration. This is without prejudice to its position that in fact it has never entered into any contract with IT Way (whether by conduct or otherwise), and such claims as IT Way seeks to advance in its own right, are bound to fail.”

Therefore, should IT Way seek to advance its claim against the defendant filed in this court in the arbitral proceedings, the defendant would not oppose the procedural step, while always disputing the substantive merits of such a claim. It will be up to Orange whether it takes a similar procedural step. These are matters for the parties. But one is bound to recall the precept of Lord Hoffmann in Fiona Trust at paras 13-14:

“13 In my opinion the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal. The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator’s jurisdiction. As Longmore LJ remarked, at para 17: ‘if any businessman did want to exclude disputes about the validity of a contract, it would be comparatively easy to say so.’

14 This appears to be the approach adopted in Germany: see the Decision of 27 February 1970 of the Federal Supreme Court of the Federal Republic of Germany (Bundesgerichtshof ) (1970) 6 Arbitration International 79, 85:

‘There is every reason to presume that reasonable parties will wish to have the relationships created by their contract and the claims arising therefrom, irrespective of whether their contract is effective or not, decided by the same tribunal and not by two different tribunals.’”