The Court of Appeal hands down judgment on court jurisdiction matter

2 April, 2020

The Court of Appeal recently handed down judgment in the case of A and B v C, D and E [2020] EWCA Civ 409. The issue in this case was whether the court had jurisdiction under s.44(2)(a) of the Arbitration Act 1996 to make an order against an individual compelling him to give evidence in support of a New York seated arbitration, notwithstanding he was not a party to the arbitration agreement.

The Court of Appeal concluded that s.44(2)(a) does give the court this power and ordered that the non-party witness give evidence by way of a deposition in front of an examiner.

The background to this decision lies in two first instance decisions: Cruz City I Mauritius Holdings v Unitech Limited [2014] EWHC 3704 (Comm) and DTEK Trading SA v Mr Sergey Morozov and another [2017] EWHC 94 (Comm). In these cases, the Commercial Court had held, with respect to applications engaging other s.44(2) powers, that the court does not have jurisdiction under s.44 to make orders against non-parties. This line of authority has troubled a number of commentators, who argue that it unduly restricts the courts’ powers, particularly when it comes to making injunctions against third parties.

The Court of Appeal declined to tackle the correctness of Cruz City and DTEK head on and instead limited its decision to the narrow question of the proper scope of s.44(2)(a). The Court’s decision, however, opens the door to further argument as to whether the other subsections of s.44(2) are available against third parties.

Angeline Welsh and Felix Wardle, instructed by Graham Shear of Bryan Cave Leighton Paisner LLP, acted for the Third Defendant.