EUPillar Claxton Engineering Services Limited v TXM Olaj-Es GAzkutatO KFT [2010] EWHC 2567 (Comm)

Summary

The claimant, Claxton, was an English company; the defendant, TXM, was domiciled in Hungary. On 5th November 2009, Claxton commenced the English proceedings, issuing a claim form for a sum of over £2 million. The defendant challenged the jurisdiction of the English courts, making an application for a stay of the legal proceedings and invoking an arbitration agreement. Claxton’s submission was that, following an email discussion in June 2006, the parties agreed to changes to the proposed terms and conditions. As a result, Claxton’s position was that an English jurisdiction clause was incorporated. In the light of the jurisdictional challenge (and the invoked arbitration agreement in particular), an important issue was whether the court (or the arbitrators) should determine the question concerning the existence of the arbitration agreement. Mrs Justice Gloster dismissed the jurisdictional challenge and the application for stay of legal proceedings in England, holding that: “53 […] I accept the principle that an arbitration agreement can be separable from the main underlying contract, and that parties by their conduct can in appropriate circumstances agree to arbitrate disputes even where there is no, or no valid, underlying contract between them. But that is not the issue here. The issue is whether there was any such agreement to arbitrate, freestanding or otherwise. 54 Accordingly I conclude that, looked at objectively, the correct legal analysis is that, at least so far as the English exclusive jurisdiction clause and English proper law clause was concerned, TXM accepted Claxton’s counterproposal by its subsequent performance. […] 59 I do not consider that the Hungarian courts are a more appropriate forum for resolution of the contractual disputes in this case. The contractual documentation is all in English; the relevant witnesses all speak English; the manufacture of the equipment took place in England and delivery was to be ex-Claxton’s works in England. Even if my conclusion as to exclusive jurisdiction of the English courts were to be incorrect, I see no reason for this matter to be litigated in Hungary.” [53-54 and 59].