Facts:
The parties entered into two joint venture agreements, each of which contained dispute resolution clauses as follows:
54. The members submit to the jurisdiction of the court of the Country of England for the enforcement of this Agreement and for any arbitration award or decision arising from this Agreement.
55. In the event a dispute arises out of or in connection with this Joint Venture Agreement, the Members will attempt to resolve the dispute through friendly consultation.
56. If the dispute is not resolved within a reasonable period, then any or all outstanding issues may be submitted to mediation in accordance with any statutory rules of mediation. If mediation is not successful in resolving the entire dispute or is unavailable, any outstanding issues will be submitted to final and binding arbitration in accordance with the laws of the Country of England. The arbitrator’s award will be final, and judgment may be entered upon it by any court having jurisdiction within the Country of England.”
A dispute arose between the parties, and the Claimant served a Notice to Arbitrate dated 18 February 2025. The Defendant said that there was no binding arbitration clause and that the Notice to Arbitrate was invalid due to defects in its form and its service. In April 2025 the Claimant issued a Part 8 Arbitration Claim Form at the High Court. The parties then attended mediation, which was unsuccessful.
The Claimant’s case is that the provisions set out above amount to an arbitration clause, requiring the Defendant to submit the dispute to arbitration and to appoint an arbitrator. The main question was whether the agreements, on their true construction, contained a compulsory arbitration clause.
Held:
According to the Court, it was unlikely that parties who chose to include an arbitration provision in their agreement intended for arbitration to be optional and conditional on whether a party wished or was willing to attempt mediation before moving to determination of the dispute. To support that, the Court highlighted that when the agreements were made in 2017 and 2018, the current approach of the courts to compel mediation in suitable cases was not present. Accordingly, the arbitration provision only made sense if it enabled a party to a dispute to compel the submission of that dispute to arbitration.
The Court said that “clause 56 does not create any obligation to submit a dispute to mediation as a condition precedent to submission of the dispute to arbitration. according to the multi-tier dispute resolution clauses, mediation was not a condition precedent to arbitration (…) Therefore, the fact that there had been no mediation when the Claimant purported to serve the Notice to Arbitrate is not fatal to his application.”
Accordingly, the Claimant was allowed to refer the dispute to arbitration, and an order was made for the appointment of an arbitrator.
Toziwepi Ropa v Kharis Solutions Ltd [2026] EWHC 259 (Comm)
