## Facts

- Peterson Farms, Inc. (Arkansas corporation) and C & M Farming Ltd. (Indian company, formerly Nasik) entered a 1996 “Sales Right Agreement” concerning supply and downstream sale of poultry breeding stock.
- The agreement provided for ICC arbitration seated in London and stated the contract would be interpreted and construed under Arkansas law.
- C&M alleged supplied poultry was infected with an avian virus, causing losses throughout a multi-tier breeding operation, including losses incurred by other companies in the C&M corporate group.
- C&M commenced ICC arbitration in 2000; a three-member tribunal seated in London issued a final award in 2003.
- The tribunal awarded approximately US$6.75 million: about US$1.22 million for C&M’s own losses and about US$5.52 million for losses attributed to other group companies.
- The tribunal accepted jurisdiction to award group-company losses on (i) a “group of companies” doctrine and (ii) an agency theory treating C&M as acting for group entities.
- Peterson applied to the English Commercial Court under Arbitration Act 1996 § 67 to set aside the portion of the award relating to non-signatory group-company losses.

## Issues

1. Whether a challenge under Arbitration Act 1996 § 67 requires a de novo rehearing on substantive jurisdiction or a limited review of the tribunal’s ruling.
2. What law governs identification of the parties to the arbitration agreement and alleged bases for extending it to non-signatories.
3. Whether English law recognizes a freestanding “group of companies” doctrine that binds or benefits non-signatory affiliates under an arbitration agreement.
4. Whether C&M acted as agent for group entities so that their claims/losses fell within the tribunal’s jurisdiction.
5. Whether Peterson was barred by waiver, estoppel, or Arbitration Act 1996 §§ 31 and 73 from raising the jurisdictional objection.

## Decision

- The court held that a § 67 application is a de novo rehearing on jurisdiction; the court must decide jurisdiction for itself.
- The court held the tribunal lacked jurisdiction to award damages for losses suffered by non-signatory group companies.
- The court rejected reliance on any “group of companies” doctrine as a basis to treat non-signatory affiliates as parties to the arbitration agreement under English law.
- The court found agency was not established on the evidence; C&M did not contract as agent for its affiliates and lacked proven authority or ratification sufficient to bind them.
- The court held Peterson had not waived its objection and was not estopped; §§ 31 and 73 did not preclude the § 67 challenge because Peterson had maintained timely jurisdictional objections.
- The court set aside the portion of the award relating to group-company (“parent”) losses and left intact the portion awarding C&M’s own losses.

## Legal Principles

- A court hearing an Arbitration Act 1996 § 67 challenge determines substantive jurisdiction by rehearing, not by deferring to the tribunal’s jurisdictional analysis.
- Under English law, non-signatories are not treated as parties to an arbitration agreement absent a recognized legal basis (e.g., agency, assignment/novation, estoppel, veil piercing); corporate group involvement alone is insufficient.
- English law does not recognize a standalone “group of companies” doctrine that extends an arbitration clause to non-signatory affiliates based on group structure or participation in performance.
- Agency capable of binding or benefiting non-signatories requires clear proof of authority (actual/apparent) or ratification; silence in the contract and surrounding dealings generally defeats an agency claim.
- Participation in an arbitration does not, without timely objection or unequivocal submission, bar later jurisdictional challenge; §§ 31 and 73 turn on whether objections were properly raised and preserved.

## Conclusion

The Commercial Court reheard jurisdiction under § 67 and partially set aside an ICC award, holding the tribunal lacked jurisdiction to award damages for losses of non-signatory affiliates because English law rejects a freestanding “group of companies” doctrine and the evidence did not establish agency or waiver.


Peterson Farms, Inc. v. C & M Farming Ltd., [2004] EWHC 121 (Comm) (Eng.)