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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Airbus Canada Limited Partnership v Joint Stock Company Ilyushin Finance Co (No. 2) [2024] EWHC 790 (Comm) (27 March 2024) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2024/790.html Cite as: [2024] EWHC 790 (Comm) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (KBD)
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
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Claimant |
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- and - |
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Joint Stock Company Ilyushin Finance Co. |
Defendant |
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Hearing dates: 27th March 2024
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Crown Copyright ©
His Honour Judge Pelling KC
Wednesday, 27 March 2024
(10:17am)
"This agreement shall be governed by and construed in accordance with the laws of the State of New York, but without reference to any conflict of law rules that would lead to the application of the laws of another jurisdiction. …".
Clause 21.2 then goes on to provide:
"Any dispute arising out of or in connection with this agreement, including any question regarding its existence, validity and termination shall be referred to and finally resolved by arbitration under the Rules of Arbitration of the London Court of International Arbitration, LCIA, by three arbitrators appointed in accordance with the said rules. Each of the parties shall appoint one arbitrator and the third arbitrator, who shall act as chairman, shall be appointed by the pre-appointed two arbitrators. The chairman of the arbitral tribunal shall not be of Canadian or Russian nationality. The arbitral tribunal shall apply the international bar association rules on the taking of evidence on international arbitration. The place of the arbitration shall be London, England. The administrative costs of the arbitration and the arbitrators' fees, as determined by the LCIA shall be shared on an equal basis by the parties, each party shall bear its own legal fees and costs".
"Subject to article 16.5 below the law applicable to the arbitration agreement and the arbitration shall be the law applicable at the seat of the arbitration unless and to the extent that the parties have agreed in writing on the application of other laws or rules of law and such agreement is not prohibited by the law applicable at the arbitral seat".
Rule 16.5 of the LCIA rules provides that the LCIA rules shall be interpreted in accordance with the laws of England. In those circumstances, Ms Hutton KC submits on behalf of the claimant that the effect of the arbitration agreement between the parties has been to make the proper law of the arbitration agreement English law. So far as that is concerned, the relevant principles are those set out in Enka Imsat v OOO Insurance Company Chubb [2020] UKSC 38; [2020] 1 WLR at paragraph 170 of the judgment of Lord Hamblen and Lord Leggatt, JJSC. The principles are summarised over nine subparagraphs. Those relevant for for present purposes are the following:
"1. Where a contract contains an agreement to resolve disputes arising from it by arbitration, the law applicable to the arbitration agreement may not be the same as the law applicable to other parts of the contract and is to be determined by applying English common law principles for resolving conflicts of law ...
2. According to these laws the law applicable to the arbitration agreement will be (a) the law chosen by the parties to govern it, or (b) in the absence of such choice the system of law with which the arbitration agreement is most closely connected ..."
Pausing there, the summary set out by Lords Hamblen and Leggatt make it abundantly clear that there is no necessary problem that arises where the curial system of law is different from the system of law which governs the contract, the substantive contract. The question which has to be asked, as identified in the summary so far, is whether or not a law has been chosen by the parties to govern the arbitration agreement. As I have explained, the parties have expressly incorporated into their agreement a requirement that any dispute be resolved by arbitration under the LCIA rules, and as I have also explained, paragraph 16.4 of the LCIA rules requires that the curial law applicable shall be the law at the seat of the arbitration. As is apparent from the arbitration agreement which I set out in full at the start of this judgment, the arbitration is required to take place in London, and, therefore, I'm satisfied that the parties have expressly chosen English law as being the law applicable to the arbitration because they have chosen, as the seat of their arbitration, London, and they have chosen to have their arbitration governed by the LCIA rules which incorporates rule 16.4 in the terms set out earlier.
"1. Unless otherwise established by an international treaty to which the Russian Federation is a party or an agreement of the parties according to which the dispute resolution involving them falls under the jurisdiction of foreign courts, international commercial arbitrations outside the Russian Federation, Russian Arbitrazh courts have exclusive jurisdictions as follows: 1) disputes involving persons subject to restrictive measures imposed by a foreign state ..."
Sub-article 248.4 of the relevant law provides:
"The provisions of this article shall also apply if the agreement of the parties, pursuant to which the dispute resolution involving them falls under the jurisdiction of the foreign court and international commercial arbitration outside the Russian Federation is unenforceable due to restrictive measures applied to one of the persons participating in a dispute by a foreign state".