Harbour Assurance Co. (UK), Ltd. v. Kansa General International Assurance Co., Ltd.
England and Wales Court of Appeal
[1993] 1 Lloyd’s Rep. 455 (1993)
- Written by Sara Adams, JD
Facts
Harbour Assurance Co. (UK), Ltd. (Harbour) (plaintiff) entered into contracts with some companies, including Kansa General International Assurance Co., Ltd. (collectively, Kansa) (defendants). An arbitration clause in the contracts stated that all disputes arising from the agreements would be subject to arbitration. Harbour initiated court proceedings in England to determine whether the contracts were illegal because they were void ab initio. Kansa applied for a stay of proceedings, arguing that the dispute should be referred to arbitration. The lower court found that the dispute fell within the terms of the properly constructed arbitration clause. However, precedent required the lower court to hold that an arbitration clause contained in a void ab initio contract was not severable from the contract, and so the arbitration clause was also void ab initio. Therefore, the lower court held that the arbitration clause was void and could not establish the jurisdiction of an arbitrator. The lower court dismissed the application for a stay. Kansa filed an appeal, arguing that the lower court improperly held that there was no jurisdiction for an arbitrator to determine the question of the contracts’ illegality.
Rule of Law
Issue
Holding and Reasoning (Gibson, J.)
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