Kruppa v. Benedetti & Anor

Christian Kruppa (plaintiff) entered into several identical agreements with Alessandro Benedetti and Bertrand des Pallières (defendants). The agreements contained a clause regarding the governing law and jurisdiction (the clause). The clause stated that the laws of England and Wales applied, and that if a dispute between parties arose, the parties would first endeavor to handle the dispute through Swiss arbitration. Therefore, under the clause, the dispute resolution process included two stages. The parties first were required to endeavor to resolve the dispute in Swiss arbitration, and if that did not result in a resolution, the dispute could then be referred to English courts. The clause did not describe who the arbitrators would be, what qualifications for arbitrators were required, how the arbitrators should be selected, or how many arbitrators were necessary. The clause also did not identify where the arbitration should occur, or which court should select an arbitrator if the parties could not agree. Kruppa filed suit in English High Court against Benedetti and Pallières in relation to the agreements. Benedetti and Pallières sought to stay the proceedings under the Arbitration Act 1996 (the act), arguing that the under the clause the parties had agreed to first submit any disputes to binding arbitration, which was governed by the act. Kruppa argued that the clause did not establish mandatory arbitration proceedings that would fall under the scope of the act, but rather created a different, two-stage method of alternative dispute resolution.