Dubai Islamic Bank PJSC v. Paymentech Merchant Services Inc.

Dubai Islamic Bank PJSC (Dubai Bank) (plaintiff) is an Islamic bank in Dubai, United Arab Emirates. In December 1990, the Dubai Bank entered an agreement with Visa International Service Association (VISA). Paymentech Merchant Servs. Inc. (Paymentech) (defendant) is a credit card payment processing business. In 1997 and 1998, a group of individuals perpetrated a fraud against the Dubai Bank using VISA cards. VISA informed Dubai Bank of the bank’s liability for $1,064,000 from this fraud. The Dubai Bank initiated a challenge using the chargeback process, a dispute resolution process to dispute liability for particular transactions through an arbitration process. The arbitration regulations did not identify a seat of arbitration or the governing law for the arbitration. Instead, under the regulations, parties needed to submit disputes to the VISA International Arbitration Committee (VIAC) at the regional filing authorities. In March 1999, Paymentech and Dubai Bank conducted the arbitration process before the VIAC in California, which issued an award to Paymentech. In May 1999, the Dubai Bank appealed the decision to the VISA international board. At a board meeting in London, England, the VISA international board upheld the VIAC awards in favor of Paymentech. The Dubai Bank filed suit in English court to annul the award under the English Arbitration Act 1996. The Dubai Islamic Bank argued that under the English Arbitration Act 1996, the seat of arbitration was in England, the location of the VISA international board when the appeal was issued. Paymentech argued that the seat of arbitration was located in California. Paymentech also argued that the fact that the VISA international board meeting happened to be in London did not change the seat of arbitration to England, as the board meetings occurred in other cities.