Remedies For Breach Of Arbitration Agreement

This article examines the remedies available when a party initiates legal proceedings, regardless of the existence of a valid arbitration agreement. It focuses in particular on the United States, the United Kingdom and Switzerland. When proceedings are threatened or brought before a local court that is likely to invoke the jurisdiction of the case and refuses to refer the parties to arbitration, a legal remedy is to require a determined benefit from an arbitration tribunal or arbitrator by way of referral. The authors also take a closer look at the power of an arbitral tribunal to award damages for breach of an arbitration agreement and discuss several recent cases of the Swiss Supreme Court that authorize this appeal. If A and B have agreed to submit a dispute to arbitration and B asserts that A owes a debt and seeks a liquidation decision against A, the court must decide whether the compromise clause or the liquidation decision should prevail. It is clear that the liquidation procedure, if authorized, could be a simple means of undermining the compromise clause. The main objective of this work is to explore options for the innocent party when the party is in breach of litigation in violation of the arbitration agreement. In this scenario, the main contribution will be to demonstrate that the innocent party should be able to file a claim for financial compensation before the Court of Arbitration, either in the form of a compensation decision or in the form of compensation against any judgment that might have been rendered in the parallel dispute. In addition, the claim for damages falls within the jurisdiction of the Court of Arbitration, as it is covered by the arbitration agreement.

There is no doubt that the forum where the parties are contesting their dispute will influence the outcome of the case. That is why there is certainly a big difference in arguing in a non-contractual forum when the parties have expressly agreed to settle their disputes through arbitration – with arbitration rules, conflict of laws, etc. Arbitration and jurisdictional agreements give effect to the procedural autonomy of the parties and are therefore fundamental instruments for the trading parties to plan an effective dispute settlement policy. The real assumption that would give rise to the possibility of claiming damages will be whether, despite the existence of a valid and enforceable arbitration agreement, a party takes the matter to a court, either because it truly believes that the arbitration agreement is null and fore, or because it does not cover the dispute invoked, or for tactical reasons (delay of arbitration proceedings or obtaining a favourable decision). The decision of the Court of Appeal in Minister of Finance and Another v International Petroleum Investment Co and Another [2019] EWCA Civ 2080 dealt with important policy issues concerning the cultural powers of the High Court. In essence, the question was whether the parties were entitled to agree that any dispute over the validity of an arbitration award must be decided by another arbitration and not by the English courts. In Cavity Insulation Guarantee Agency Ltd/ Thermabead Ltd, 2019, unreported, Roger ter Haar QC, seated as an assistant judge of the High Court, was included with a compromise clause in the rules of an association and designed to deal with disputes between association members and their clients. For the Tribunal, the question arose as to whether the clause also applied to disputes between the association and its members.

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