## Facts

- An English distributor (Accentuate) and a Canadian software licensor (Asigra) entered a Master Reseller Agreement in 2004.
- The agreement selected Ontario/Canadian federal law as governing law and required arbitration of “all disputes” in Toronto.
- Asigra terminated the agreement in 2006.
- Accentuate asserted it was entitled to termination compensation under the Commercial Agents (Council Directive) Regulations 1993, including protections against derogation.
- Asigra commenced Toronto arbitration; the tribunal applied Ontario law, rejected the Regulations-based compensation claim, and awarded only contract damages.
- Accentuate later brought English proceedings seeking compensation under the Regulations; a district judge set aside service out and stayed the claim under Arbitration Act 1996 § 9.
- Accentuate appealed to the High Court.

## Issues

1. Whether the agreement’s choice-of-law and arbitration clauses could exclude or reduce mandatory rights under the Commercial Agents Regulations (including termination compensation and the prohibition on derogation).
2. Whether the arbitration agreement was “null and void, inoperative or incapable of being performed” under Arbitration Act 1996 § 9(4) insofar as it covered mandatory Regulations claims.
3. Whether the prior Toronto arbitral determination bound the English court by comity, res judicata, or issue estoppel.
4. Whether the English court had jurisdiction to hear the Regulations claim, including questions of commercial-agent status and service-out disclosure.

## Decision

- The High Court allowed the appeal in relevant part and set aside the stay to the extent it prevented the Regulations claim from proceeding in England.
- The court held the arbitration and choice-of-law clauses were ineffective, to the extent they operated to deprive Accentuate of mandatory protections under the Regulations.
- Because enforcing the arbitration agreement would amount to impermissible contracting out, § 9 did not require a stay; the arbitration agreement was inoperative (and/or void) to that extent under § 9(4).
- The Toronto tribunal’s conclusion that the Regulations did not apply did not bind the English court as to mandatory EU-derived rights.
- The question whether Accentuate qualified as a “commercial agent” under the Regulations remained for determination in the English proceedings.

## Legal Principles

- Mandatory statutory rights implementing EU law, including termination compensation protections for commercial agents and the prohibition on derogation to the agent’s detriment, cannot be displaced by contract before expiry.
- An arbitration clause is unenforceable to the extent its practical effect is to circumvent mandatorily applicable statutory protections by requiring adjudication under a law/forum that will not apply them.
- Under Arbitration Act 1996 § 9(4), an English court need not stay proceedings where the arbitration agreement is null/void or inoperative as applied to the mandatory-rights dispute.
- A foreign arbitral ruling applying the parties’ contractual choice of law does not create an estoppel that prevents an English court from determining the existence and effect of mandatory statutory protections.

## Conclusion

The High Court held that contractual arbitration and choice-of-law provisions could not be used to prevent pursuit in England of mandatory Commercial Agents Regulations rights; accordingly, the stay under Arbitration Act 1996 § 9 was lifted to allow the Regulations claim to proceed, and the prior Canadian arbitral ruling did not preclude the English court’s determination of those mandatory rights.


Accentuate Ltd. v. Asigra, Inc., [2009] EWHC 2655 (QB) (Eng.)