February 6, 2020

Arbitration Case Law Update: Court of Appeal Refuses Kabab-Ji Enforcement

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Kabab-Ji S.A.L. v Kout Food Group [2020] EWCA Civ 6

In a recent judgment, the Court of Appeal refused to recognise and enforce an arbitral award in a decision which addressed two key issues: (1) what law governs arbitration agreements and (2) the effectiveness of “no oral modification” clauses.

In summary, the Court of Appeal held that:

  • the governing law of an arbitration agreement is a matter of construction and that, on interpretation of the relevant express terms, the arbitration agreement in dispute was governed by English law (which was the governing law of the underlying agreement), notwithstanding that the seat of the arbitration was Paris.
  • applying the judgment of the Supreme Court in Rock Advertising, a “no oral modification” clause was effective. Since there had been no written variation of the relevant franchising agreement, nor conduct amounting to an estoppel, the respondent had not become a party to the franchising agreement and was thus not bound by its terms or the terms of the arbitration agreement.

Click here to read the full update.