## Facts

- Christian Kruppa entered into three materially identical agreements with Alessandro Benedetti and Bertrand des Pallières.
- Each agreement contained a “Governing Law and Jurisdiction” clause selecting the law of England and Wales.
- The clause stated that, in the event of a dispute, the parties would “endeavour to first resolve the matter through Swiss arbitration,” and, if no resolution occurred, “the courts of England shall have non-exclusive jurisdiction.”
- Kruppa sued in the Commercial Court in England under the agreements.
- The defendants applied to stay the court proceedings under Arbitration Act 1996 § 9, arguing the clause required arbitration in Switzerland.
- The clause did not specify an arbitral seat within Switzerland, arbitral rules, an appointing authority, or a method for constituting the tribunal.

## Issues

1. Whether the “Governing Law and Jurisdiction” clause amounted to an “arbitration agreement” under Arbitration Act 1996 § 6(1).
2. If so, whether the English court was required to stay the proceedings under Arbitration Act 1996 § 9 in favor of arbitration.

## Decision

- The court held the clause was not a binding arbitration agreement within Arbitration Act 1996 § 6(1).
- The court characterized the clause as, at most, an agreement to attempt to resolve disputes by some arbitral process, requiring further agreement before any arbitration could proceed.
- The court found the clause’s second limb (non-exclusive English court jurisdiction if no “resolution” was reached) inconsistent with a mandatory, binding submission of disputes to arbitration.
- The defendants’ application for a stay under Arbitration Act 1996 § 9 was denied, and the court proceedings continued.

## Legal Principles

- An arbitration agreement under Arbitration Act 1996 § 6(1) requires an agreement to submit disputes to arbitration, not merely a commitment to try to arbitrate.
- Wording obliging parties to “endeavour” to resolve disputes through arbitration can be construed as non-binding and may fall short of a statutory arbitration agreement.
- A dispute-resolution clause may fail as an arbitration agreement where essential mechanics (tribunal constitution, seat, rules, or default appointment method) are left for future agreement.
- Pro-arbitration construction has limits: courts will not convert an agreement to attempt arbitration into a mandatory agreement to arbitrate where the text and structure do not support that result.
- A stay under Arbitration Act 1996 § 9 depends on the existence of a valid arbitration agreement covering the dispute; absent that, the court retains jurisdiction.

## Conclusion

The Commercial Court refused to stay litigation because the clause required only an attempt to resolve disputes through “Swiss arbitration” and contemplated non-exclusive English court jurisdiction if no resolution was achieved, so it did not constitute an arbitration agreement under the Arbitration Act 1996.


Kruppa v. Benedetti, [2014] EWHC 1887 (Comm) (Eng.)