COMMERCIAL DISPUTE RESOLUTION AND LITIGATION

Ganz v Petronz FZE & Goren – key decisions of the arbitration claim

DMH Stallard LLP act for the claimant in the recent #arbitration case of Mordchai Ganz v (1) Petronz FZE (2) Abraham Goren [2024] EWHC 635

The recent Judgment of Moulder J in the arbitration claim Mordchai Ganz v (1) Petronz FZE (2) Abraham Goren [2024] EWHC 635 (Comm) has already received attention from legal pundits.  The DMH Stallard’s legal team (Tim AshdownBeatrice Bass and Patrick Murray) acted for the Claimant. DMH Stallard was supported by the legal team of Altshuler Law in Israel which is a collaboration enabled through their membership of LEInternational.

The challenge was to an [2020] LCIA arbitration award in a dispute between to Israeli individuals and a company based in the Dubai Free Zone, in which DMH Stallard had also acted.

The hearing of Ganz v Petronz & Abraham Goren, was conducted by way of a re-hearing, without any new or live evidence from witnesses.  The decision included two primary issues of interest: the severability of arbitration agreements and the publication of the judgment.

Separability of arbitration agreements

The subject matter of the original arbitration was the validity of a share purchase agreement (SPA) between the parties, which included an agreement to arbitrate.  In the arbitration Award, the Tribunal concluded that the SPA was not legally binding and, as a consequence neither was the agreement to arbitrate.

In the High Court challenge that followed, we argued that the arbitration agreement could be binding on the parties, even if the SPA was not (the principle of separability).  Judge Moulder accepted that an arbitration agreement can be treated as a distinct agreement, separate from the main contract within which it resides, and that it can be valid even if the main contract is not.  However, in the current case, the arbitration agreement was so closely connected to the SPA, as the circumstances surrounding the formation of the arbitration agreement were by and large based on the same facts and evidence that also applied to the formation of the SPA, the Judge concluded that the arbitration agreement was not binding.

The Judgment demonstrates that whilst the principle of separability exists, it is difficult to achieve in practice, where the intention and conduct of the parties cannot be distinguished as between the main agreement and the arbitration agreement.

Publicity of Judgment vs confidentiality

The Judge also invited submission from the parties as to whether her judgment should be anonymised, preserving the confidentiality in the underlying arbitration award.  Mr Ganz wanted the judgment published; Mr Goren did not.

Judge Moulder found that the LCIA rules regarding confidentiality of an award did not apply to this case. She also maintained that the key principle in making a judgment public should be whether it is in the public interest to do so, applying The City of Moscow & Anr v Bankers Trust Company & Anr [2004]. According to the City of Moscow case, whilst arbitration hearings and awards should be kept confidential, if a party brings a claim in the courts regarding an arbitration award, the court’s involvement is not an extension of the arbitral process, as such the rules of arbitration should no longer apply. Any judgments handed down in the courts regarding an arbitration claim are in the public interest and therefore, should be made public.

Judge Moulder acknowledged that there were references to the original arbitration award in her Judgment, but the details of it are not referred to and therefore, there was no disclosure of confidential information. In Judge Moulder’s view, there was a public interest in publicising the Judgment and this was enough to make it public.

This ruling is a reminder that the confidentiality requirements in arbitration are not necessarily applied to judgments in arbitration claims pursued in the High Court, and that the public interest may outweigh any confidentiality considerations.

Counsel for Mr Ganz, was Alex Goold of Selborne Chambers.

About the authors


about the author img

Beatrice Bass

Associate

Advises on all aspects of commercial dispute resolution, intellectual property and technology related disputes.
about the author img

Patrick Murray

Solicitor

Advises on commercial disputes with a focus on Intellectual Property and technology related matters

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