case 1 El Nasharty v. J Sainsbury.pdf

8/14/2019 case 1 El Nasharty v. J Sainsbury.pdf

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CHANCERY DIVISION

9, 12; 29 March 2007

ALBONv

NAZA MOTOR TRADING SDN BHD(NO 3)

[2007] EWHC 327 (Ch)

Before Mr Justice LIGHTMAN

Arbitration Claimant bringing proceedings in Eng-

land Defendant asserting existence of joint ven-ture agreement containing arbitration clause Claimant arguing that joint venture agreement aforgery Stay of proceedings under inherent juris-diction of court Whether trial should be orderedon validity of joint venture Effect of ArbitrationAct 1996, section 9.

On 10 August 2005 the claimant, Mr Albon, issued aclaim form against the defendant, Naza Motors, seekingsums allegedly overpaid by the claimant under anagreement between the parties (the UK Agreement),sums owed under a further agreement (the GermanAgreement) and reimbursement for sums expended bythe Mr Albon on behalf of the Naza Motors while itscontroller, Mr Nasim, was visiting London. Permissionfor service of the claim form on Naza Motors inMalaysia was given on 26 August 2005. In earlierproceedings, Albon v Naza Motor Trading Sdn Bhd[2007] 1 Lloyds Rep 297, Lightman J set aside thepermission for service outside the jurisdiction in respectof the claims under the German Agreement and inrespect of expenses, leaving only the claim in respect ofthe English agreement. Subsequently, in Albon v Naza

Motor Trading Sdn Bhd (No 2) [2007] EWHC 327(Ch), Lightman J held that an alternative service ordergranted to Mr Albon would not be discharged.

In the present proceedings Naza Motors sought a stayof the claim in respect of the English agreement. NazaMotors asserted that on 29 July 2003 the parties had

entered into a Joint Venture Agreement (JVA) whichprovided for arbitration in Malaysia governed byMalaysian law of all claims between the parties, and

that the terms of the arbitration clause were apt toinclude the disputes in respect of the UK Agreement.

Naza Motors purported to commence arbitration pro-ceedings pursuant to the JVA in Malaysia

Mr Albon contended that the JVA was a forgery andon that ground refused to participate in the arbitrationproceedings. In the present case Naza Motors applied tothe court for a stay of the action under the UKAgreement so that the dispute could be referred toarbitration in accordance with the arbitration clause.The issue for the court was whether the genuineness orotherwise of the JVA should be determined by thearbitrators in the arbitration proceedings, in which casethe action would be stayed pending that determinationand the stay would only be removed if the arbitratorsdecided that the JVA was a forgery, or whether the courtshould determine that issue and order a stay only if it

was concluded that the arbitration clause wasgenuine.

Held, by Ch D (LIGHTMAN J) that a staywould be refused and that a trial on the question on thevalidity of the arbitration clause would be ordered.

(1) Until the validity of the arbitration clause hadbeen determined the court had no jurisdiction undersection 9 of the Arbitration Act 1996 to grant a stay.

(a) The court could not order a stay under section9(1) of the 1996 Act unless two threshold require-ments had been satisfied: that there was a concludedarbitration agreement; and that the issue was a matterwhich under the arbitration clause was to be referredto arbitration. Unless and until the court was satisfied

that both these conditions were fulfilled the courtcould not grant a stay under section 9. The courtcould stay its proceedings so that these matters couldbe resolved by the arbitrators, but only under itsinherent jurisdiction and not under section 9 (seeparas 14 and 17);

Birse Construction Ltd v St David Ltd[2000] BLR 57,Al-Naimi v Islamic Press Agency Inc[2000] 1 Lloyds Rep 522, Fiona Trust & HoldingCorporation v Privalov [2007] EWCA Civ 20,applied.

(b) The power of the court to refuse a stay undersection 9(4) of the 1996 Act, where the arbitrationagreement was null and void, inoperative or incapa-

ble of being performed, assumed that an arbitrationagreement had been concluded, and was concernedwith the situation where issues arose whether that

LLOYDS

LAW REPORTSEditors: Michael Daiches, Barrister

Professor Robert Merkin

PART 1 Albon v Naza Motor Trading Sdn Bhd (No 3) [2007] VOL 2


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the JVA are apt to include the disputes in respect ofthe UK Agreement the subject of this action andNaza Motors has commenced or purported to com-mence arbitration proceedings pursuant to the JVAin Malaysia (the arbitration proceedings). MrAlbon however contends that the JVA is a forgeryand on that ground refuses to participate in thearbitration proceedings. The issue which I havenow to resolve is whether: (1) (as contended byNaza Motors) the genuineness or otherwise of theJVA should be determined by the arbitrators in thearbitration proceedings, in which case this actionshould be stayed pending that determination and thestay should only be removed if the arbitratorsdecide that the JVA is a forgery; or (2) (as con-tended by Mr Albon) this court should determine

that issue, in which case a stay should only beordered if the court holds that the JVA is genuine.

Relevant chronology

6. The claim form in this case was issued on 10August 2005. There were two heads of claimagainst each of Naza Motors and Mr Nasim. On 26August 2005 permission was given to serve each ofNaza Motors and Mr Nasim out of the jurisdiction.By letter dated 16 December 2005 Naza Motors andMr Nasim gave Notice of Dispute-Conciliationunder the JVA seeking resolution of the disputewith Mr Albon. By letter dated 11 January 2006 Mr

Albons solicitors disputed that Mr Albon hadsigned the JVA. On 18 January 2006 Mr Albonobtained an order under CPR Part 6.8 authorisingservice by a method not authorised by the CPR onthe defendants. Pursuant to that order on 7 February2006 Mr Albon served the claim form on thedefendants. By letter dated 17 February 2006 NazaMotors and Mr Nasim gave Notice of Arbitrationunder the JVA on Mr Albon. By letter dated 22February 2006 Mr Albons solicitors again disputedthat Mr Albon had signed the JVA. Mr Albon hastaken no steps in the arbitration proceedings. On 13March 2006 Naza Motors and Mr Nasim served an

Acknowledgement of Service under CPR Rule 11for the purpose of challenging jurisdiction accom-panied by a Notice of Application to that effect. On28 March 2006 Mr Albon applied for inspection ofthe JVA.

7. On 22 May 2006 in response to the notificationof intention by Naza Motors to press ahead with thearbitration proceedings Mr Albon made a withoutnotice application and was granted by Warren J aninterim injunction restraining Naza Motors and MrNasim proceeding with the arbitration proceedings.By orders dated 23 May 2006 (the return date of theapplication) Warren J directed that the application

should be stood over to come on as an applicationby order and he continued the injunction in theinterim. On 12 September 2006 Briggs J adjourned

Mr Albons application and continued the injunc-tion over the meantime to cover this hearing. NazaMotors has responsibly indicated to the court that itmay agree not to take further steps in the arbitrationproceedings until the court has decided the issuewhether the JVA is genuine if the court decides: (1)that it (and not the arbitrators) shall determine theauthenticity of the JVA; and (2) that this determina-tion by court is a necessary preliminary to the grantof a stay under section 9 by reason of the arbitrationagreement. Accordingly I do not need in thisjudgment to determine whether the injunction oughtever to have been granted and whether it ought nowto be continued. By reason of the refusal of MrAlbon to participate in the Arbitration Proceedingsand the grant of this injunction the arbitration

proceedings have not proceeded beyond theappointment by Naza Motors of its choice ofarbitrator

The JVA

8. I should at this stage say a word about theissue as to the genuineness or otherwise of the JVA.Mr Nasim and a Mr Naidu (an employee of NazaMotors) have made witness statements to the effectthat Mr Albon signed the JVA or acknowledged hissignature on the JVA in their presence at the officesof Naza Motors in Kuala Lumpur on 29 July 2003.Mr Albon has made a witness statement to theeffect that he never agreed to or signed the JVA andhe suggests that his signature was lifted from adocument which he signed at about that time at therequest of Mr Nasim to be provided to the Malay-sian tax authorities. Mr Albon points out a numberof features of Naza Motorscase which (he argues)calls into question the evidence of Mr Nasim andMr Naidu. These include that: (1) the JVA wasallegedly made on 29 July 2003 but according to itsterms was deemed to have commenced six yearsearlier in March 1997. One of Naza Motors wit-nesses, Ms Amin in part of her evidence states thatthe explanation for this given to her by Mr Nasim is

that this earlier date was the date when the importa-tion of cars into the UK commenced. Mr Nasim inhis later evidence and Mr Albon however agree thattrading only started in November 1997; (2) NazaMotors have produced no other document referringto the JVA; (3) Naza Motors first asserted theexistence of the JVA in a letter from their solicitorsFSI dated 22 December 2005; (4) though (accord-ing to Naza Motors) the JVA was drafted by MrNaidu who (according to Mr Nasim) had manyyears experience in drafting legal documents onbehalf of the Naza group of companiesand thoughMr Albon, Naza Motors, Mr Nasim and NA Car-

riage are named as parties, the document is signedonly by Mr Albon and Mr Nasim personally, andthere is no reference to Naza Motors at all on the

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signature page; (5) the layout and print of the last(signature) page is not the same as for previouspages and the last (signature) page is paginateddifferently; (6) the draftwhich Naza Motors sayswas produced for discussion prior to finalising theJVA has never been produced; and (7) Naza Motorshave refused to permit Mr Albons expert MrBrown to take the original JVA away for (non-destructive) testing and to carry out an ESDA test.The features relied on by Mr Albon may besatisfactorily explained at a trial. I cannot resolvethe issue of the genuineness of the JVA on thematerial before me. There must be cross-examina-tion of Mr Albon, Mr Nasim and Mr Naidu and (inall probability) expert evidence. All I can say on thematerial before me is that the outcome of the trial of

the issue is wide open.

Stay

9. The application by Naza Motors for a stayrequires close examination of sections 9 (section9) and 30 (section 30) of the Arbitration Act1996 (the Act) and CPR Rule 62.8(3) (theRule). The two sections of the Act read asfollows:

Stay of legal proceedings

9. (1) A party to an arbitration agreementagainst whom legal proceedings are brought

(whether by way of claim or counterclaim) inrespect of a matter which under the agreement isto be referred to arbitration may (upon notice tothe other parties to the proceedings) apply to thecourt in which the proceedings have beenbrought to stay the proceedings so far as theyconcern that matter.

. . .

(3) An application may not be made by aperson before taking the appropriate proceduralstep (if any) to acknowledge the legal proceed-ings against him or after he has taken any step inthose proceedings to answer the substantive

claim.(4) On an application under this section the

court shall grant a stay unless satisfied that thearbitration agreement is null and void, inoper-ative, or incapable of being performed.

. . .

Competence of tribunal to rule on its ownjurisdiction

30. (1) Unless otherwise agreed by the parties,the arbitral tribunal may rule on its own sub-stantive jurisdiction, that is, as to

(a) whether there is a valid arbitrationagreement,

(b) whether the tribunal is properly consti-tuted, and

(c) what matters have been submitted toarbitration in accordance with the arbitrationagreement.

(2) Any such ruling may be challenged by anyavailable arbitral process of appeal or review orin accordance with the provisions of this Part.

The Rule reads as follows:

Where a question arises as to whether

(a) an arbitration agreement has been con-cluded; or

(b) the dispute which is the subject-matterof the proceedings falls within the terms ofsuch an agreement

the court may decide that question or givedirections to enable it to be decided and may

order the proceedings to be stayed pending itsdecision.

10. The effect of the Act is the subject of avaluable analysis by Toby Landau at pages 117 to128 of volume 13 number 4 (1996) of the Journalof International Arbitration. The Act represents afundamental overhaul of English arbitration lawbased on the UNCITRAL Model Law on Inter-national Commercial Arbitration (the ModelLaw) adopted on 21 June 1985. Part I of the Actembraces sections 1 to 84 which contains the bulkof the provisions with respect to all aspects of anarbitration pursuant to an arbitration agreement as

defined. Part II of the Act contains specific provi-sions relating to specific arbitrations and mostparticularly domestic arbitrations.

11. Section 1 of the Act sets out the basicprinciples (the principles) on which Part 1 of theAct is founded and in accordance with which itsprovisions are to be construed. The first principle isthat the object of arbitration is to obtain the fairresolution of disputes by an impartial tribunalwithout unnecessary expense or delay. The secondprinciple is party autonomy, that is to say that theparties should be free to agree how their disputesare resolved subject only to such safeguards as are

necessary in the public interest. An aspect of thisprinciple is the doctrine of Kompetenz-Kompetenznamely that the arbitral tribunal may rule as to itsown jurisdiction and in particular as to the existenceof the arbitration agreement. The doctrine of Kom-petenz-Kompetenz is given effect in domestic arbi-trations by section 30. The third principle is that inmatters governed by Part I the court shall notintervene except as provided in Part I. The under-lying policy in this regard is that the court shouldonly intervene to support rather than displace thearbitral process.

12. Before I examine the provisions of the Act

further I should make two preliminary observa-tions. The first is that under section 7 of the Act(unless otherwise agreed) an arbitration agreement

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forming part of another agreement is not to beregarded as invalid, non-existent or ineffectivebecause that other agreement is invalid or did notcome into existence or has become ineffective andit shall be treated for that purpose as a separateagreement. The second relates to terminology. Adistinction is to be drawn between three termsgenerally used with reference to arbitration agree-ments. The first is the term constituted. Anarbitration agreement is constituted when it isbrought into existence. The second is existwhichis an ambiguous term. To say that an arbitrationagreement exists may mean that it has been broughtinto existence and may mean that at any relevantpoint in time it continues to exist. The third isvalidity. An arbitration agreement is valid if inlaw it is at the relevant point in time legally bindingon the parties.

13. The first issue before me is whether on anapplication for a stay under section 9(1), if the issuearises whether the arbitration agreement was everconcluded and that issue cannot be resolved on thewritten evidence before the court, the court can orshould give directions for the resolution of thatissue by the court or can or should grant the stay soas to enable the issue to be resolved in the arbitra-tion. Mr Waksman, counsel for Mr Albon, submitsthat section 9(1) requires the court itself to resolve

that issue. Mr Nathan, counsel for Naza Motors,submits that the issue whether the arbitration agree-ment was concluded is an issue whether the agree-ment is null and void within the meaning of section9(4) and that both on principle and on authority theissue whether the arbitration agreement was con-cluded, so long as it is arguable should be referredto the arbitrators and a stay of these proceedingsshould be granted pending their determination ofthe issue. The second issue is whether if the courtcannot order a stay under section 9(1) the court canor should grant the stay sought by Naza Motors soas to enable the issue to be resolved in the arbitra-tion proceedings in exercise of the courts inherentjurisdiction.

14. I turn now to the first issue. The first questionraised is what (if anything) Naza Motors needs toestablish as conditions precedent to invoking thejurisdiction conferred by section 9(1) to grant a stayof court proceedings. In my judgment the languageof section 9(1) plainly establishes two thresholdrequirements. The first is that there has been con-cluded an arbitration agreement and the second isthat the issue in the proceedings is a matter whichunder the arbitration agreement is to be referred toarbitration. The first condition is as to the conclu-

sion and the second is as to the scope of thearbitration agreement. Accordingly unless and untilthe court is satisfied that both these conditions are

satisfied the court cannot grant a stay under section9.

15. The construction which I have adoptedaccords with the view expressed obiter in para 36of its judgment by the Court of Appeal in FionaTrust v Privalov [2007] EWCA Civ 20 that, if theconclusion of an arbitration agreement is in issue,that issue has to be decided under section 9 of the1996 Act before a stay can be granted under thatsection. The construction is also in general accordwith the thrust of the other authorities cited to mesubject only to minor qualifications.

16. Guidelines were laid down by HHJ Hum-phrey LLoyd QC in Birse v St David at firstinstance [1999] BLR 194 and (though the decision

of the judge was reversed) his statement of theguidelines was approved on appeal by the Court ofAppeal [2000] BLR 57 and again by the Courtof Appeal in the later case of Al-Naimi v IslamicPress Agency Inc [2000] 1 Lloyds Rep 522(Al-Naimi). These guidelines are to the effectthat on an application for a stay such as the presentwhere the conclusion of the arbitration agreement isin issue, there are four options open to the court: (1)(where it is possible to do so) to decide the issue onthe available evidence presently before the courtthat the arbitration agreement was made and grantthe stay; (2) to give directions for the trial by the

court of the issue; (3) to stay the proceedings on thebasis that the arbitrator will decide the issue and (4)(where it is possible to do so) to decide the issue onthe available evidence that the arbitration agree-ment was not made and dismiss the application forthe stay. The Court of Appeal adopted the second ofthese options. The guidelines and the decision ofthe Court of Appeal establish that on an applicationunder section 9(1) of the 1996 Act the court can tryand (subject to one qualification) should decide theissue whether the arbitration agreement was con-cluded. The minor qualification in respect of whichthe guidelines are not in accord with the construc-tion which I have adopted is in respect of the thirdof the guidelines. Where there is an issue which thecourt cannot resolve on the available evidence onthe application as to whether the arbitration agree-ment was concluded, the court indeed can stay theproceedings so that the arbitrators can decide theissue, but only by exercising its inherent jurisdic-tion and not by exercising any jurisdiction undersection 9. Support for this view may be found in apassage inAl-Naimi at page 528.

17. The construction which I have adopted alsoaccords with the terms of the Rule which providesfor the court giving directions for the trial by the

court of the issue whether the arbitration agreementwas concluded and for the court ordering a stay ofproceedings pending the decision at trial.




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18. My construction of section 9(1) is entirely inaccord with section 9(4) and (again subject only tominor qualifications) with the authorities on thatsection. Section 9(4) assumes that an arbitrationagreement has been concluded and it provides forthe situation where issues arise whether that con-cluded agreement is or may be in law null andvoid, inoperative or incapable of being performed.In this context null and voidmeans devoid oflegal effect. This is made clear by the decision in1983 of the US 3rd Circuit Court of Appeals in

Rhone Mediterranee v Achille Lauro 712 F 2d 50.The court in that case had to determine the con-struction of identical wording in article 11.3 of the1959 New York Convention. On this issue the courtsaid:

We conclude that the meaning of Art 11section 3 which is most consistent with theoverall purposes of the Convention is that anagreement to arbitrate is null and voidonly (a)where it is subject to an internationally recog-nised defence such as duress, mistake, fraud orwaiver . . . or (b) when it contravenes funda-mental policies of the forum State. The null andvoid language must be read narrowly for thesignatory nations have jointly declared a generalpolicy of enforceability of agreements to arbi-trate (pages 3 to 4).

Likewise in this context for an arbitration agree-ment to be inoperative it must have been con-cluded but for some legal reason have ceased tohave legal effect; eg by reason of acceptance of arepudiation as in Downing v Al Tameer Establish-ment [2002] BLR 323, [2002] EWCA Civ 721(Downing) at paras 26 to 35.

19. I should say a word on the submissions of MrNathan, counsel for Naza Motors. He submitted asfollows: (1) that the doctrine of Kompetenz-Kom-petenz precludes the court from intervening withthe arbitral process where the arbitral tribunal isseised of the issue of its own jurisdiction and in

particular of the issue whether or not an arbitrationagreement has been concluded; (2) that in a domes-tic arbitration under section 30 of the 1996 Act thearbitral tribunal would have jurisdiction to deter-mine whether the JVA was ever concluded; (3) thaton an application for a stay the court is bound bysection 9(4) of the 1996 Act to grant a stay of thepresent proceedings unless satisfied that the JVA isnull and void, a term which embraces the situa-tion where the arbitration agreement was neverconcluded. He cited in support of this propositionSun Life Assurance v CX Reinsurance [2004]Lloyds Rep IR 58, [2003] EWCA Civ 283 (Sun

Life); and (4) that if the party seeking a stay canestablish an arguable case that the arbitration agree-ment was concluded, that issue must be determined

by the arbitral tribunal. For this proposition he citedDowning.

20. I would answer the first and second submis-sions as follows. Whilst the doctrine of Kompetenz-Kompetenz (which is given effect in a domesticarbitration by section 30 of the 1996 Act) providesthat the arbitral tribunal shall have jurisdiction todetermine whether the arbitration agreement wasever concluded, it does not preclude the court itselffrom determining that question. There are tworeasons why the court must have jurisdiction to ruleon whether the arbitration agreement was con-cluded. The first is that the rule of law in generaland subject only to limited exceptions requires thata party should not be barred from access to

the court for the resolution of disputes unless thegrounds for such bar are established. A bar on theground of the alleged conclusion of an arbitrationagreement (in general and subject only to limitedexceptions) is not established unless and until thecourt has ruled on the issue whether it has beenconcluded. The second is that, unless and until it isheld that the arbitration agreement has been con-cluded, the compelling factors requiring respect forthe terms agreed regarding arbitration do not comeinto play or at any rate do not come into play withtheir full force and effect.

21. As regards the third submission, I have

already given my reasons for holding that anarbitration agreement must have been concludedbefore it can be held to be null and void. It is truethat in the second sentence of his judgment in Sun

Life Assurance Potter LJ did indeed say:

The judge [below] dismissed the application,holding that no arbitration agreement had beenconcluded between the parties and that the agree-ment relied on by CNA was thus null and voidwithin the meaning, and for the purposes, ofsection 9(4) of the 1996 Act.

The judgment of the first instance judge is notavailable. But it is clear that there was no issue and

no argument in Sun Life whether, in a case where noarbitration had been concluded, the situation wasoutside section 9(1) or null and void withinsection 9(4). The dictum can carry no weight andcertainly no sufficient weight to undermine theconclusion which I have reached.

22. As regards the fourth submission Mr Nathanrelies on another dictum of Potter LJ in Downingwhere he said:

The burden of proving that any of the groundsin section 9(4) has been made out lies upon theclaimant and, if the defendant can raise an

arguable case in favour of validity, a stay shouldbe granted: Hume v AA Mutual InternationalInsurance Co Ltd[1996] LRLR 19.

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The fact that under section 9(4) a party invoking anarbitration clause may need only to raise an argu-able case of the validity of an arbitration agreementto entitle himself to a stay in no way militatesagainst the existence of the requirement undersection 9(1) of establishing the conclusion (and notmerely the arguable conclusion) of an arbitrationagreement. It is unnecessary to examine the ques-tion raised by Mr Waksman whether the statementof law by Potter LJ is established by the authoritywhich he cited.

23. I accordingly hold that, in view of the presentunresolved issue of fact as to whether the arbitra-tion agreement was concluded, there is as yet nojurisdiction under section 9 to grant a stay. Jurisdic-tion under section 9 to do so will only arise if andwhen the issue is resolved in favour of itsconclusion.

24. I must accordingly turn to the second issuewhether it would be right in the present circum-stances to exercise the inherent jurisdiction to granta stay and (in effect) remit the issue whether theJVA was concluded to be decided in the arbitrationproceedings. The absence of jurisdiction undersection 9(1) to order a stay for this purpose does notpreclude the existence and exercise by the court ofits inherent jurisdiction to order a stay for thispurpose. The court may in exercise of its inherentjurisdiction in its discretion order such a stay both

where the issue is as to the conclusion or as to thescope of the arbitration agreement. But the courtshould only exercise its inherent jurisdiction toorder such a stay and decline to decide the issue ofthe conclusion of the arbitration agreement or of thescope of the arbitration agreement in an exceptionalcase. The inherent jurisdiction should be exercisedwith particular caution where the issue is as to theconclusion of the arbitration agreement. The courtmay very exceptionally order such a stay, eg ifvirtually certain that the arbitration agreement wasconcluded. Exceptional but less compelling circum-stances (eg overwhelming considerations of con-

venience and cost) may justify such a stay wherethe issue of the scope of the arbitration agreement isin issue, eg when the issue is closely bound up withthe issues in the arbitration: see Al-Naimi at page525 and El Nasharty v J Sainsbury plc [2004] 1Lloyds Rep 309 at paras 28 to 29.

25. In making its decision whether to exercise itsinherent jurisdiction the court is in my judgmententitled to take into account whether the com-mencement of the court proceedings preceded thecommencement of the arbitration proceedings andwhether the decision of the arbitrators on this issueis subject to review by a court: as to the latter,

consider para 138 of the 1996 Report by theDepartmental Advisory Committee on ArbitrationLaw on the (then) Arbitration Bill. The commence-ment of these proceedings preceded the commence-ment of the Arbitration Proceedings in Malaysiaand (according to the Brief Agreed Summary of theexpert evidence) the courts in Malaysia have nostatutory jurisdiction equivalent to that afforded indomestic arbitrations by sections 30(2), 67 and 72of the Act to review or interfere with any decisionby arbitrators in Malaysia as to the conclusion ofthe arbitration agreement and probably have noinherent jurisdiction to do so: at best any inherentjurisdiction is in doubt. I take these considerationsinto account.

26. In my judgment this is not one of those

exceptional cases where exercise of the inherentjurisdiction is called for. There are no sufficientexceptional circumstances. In the circumstances ofthis case I think that I should give directions for theexpedited trial by the court of the issue as to thegenuineness of the JVA. I fully recognise that thismay require Mr Nasim and Mr Naidu and possiblyother witnesses from Malaysia to give evidence inLondon. I have already held that English law is theproper law of the UK Agreement and that Englandis the proper forum for the trial of Mr Albons claimin respect of the UK Agreement against NazaMotors. Mr Nasim has longstanding links with this

country. Requiring the trial to take place here willoccasion no injustice to Naza Motors. It may bepossible for some (if not all) of the evidence ofwitnesses in Malaysia to be given by video link(assuming that video link is available in Malaysia)although I appreciate that in view of the seriousnessof the issues Mr Nasim and Mr Naidu may wellwish to attend the trial. The reports of the partiesexperts after the proper testing of the JVA may wellprove of paramount importance, if not conclusive. Ido not think that it would be just in all thecircumstances of this case to require Mr Albon tosubmit himself to the arbitration proceedings inMalaysia unless and until the validity of the JVAhas been decided against him here.

Conclusion

27. In these circumstances pursuant to the Rule:(1) I order that the issue whether the JVA isauthentic shall be decided by this court; (2) I invitethe parties to propose and (if possible) agree direc-tions in respect of such trial; and (3) I order thatpending the decision at such trial these proceedingsshall be stayed.

28. I gratefully acknowledge the contribution ofcounsel to this judgment.



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case 1 El Nasharty v. J Sainsbury.pdf