Insurance And (Re)Insurance - 23 April 2013

Fortress Value Recovery v Blue Skye

Whether third party to a contract could obtain stay of legal proceedings against it and rely on arbitration agreement in the contract

http://www.bailii.org/ew/cases/EWCA/Civ/2013/367.html

Section 8(1) of the Contracts (Rights of Third Parties) Act 1999 provides, broadly, that where a third party has a right to enforce a term in a contract to which it is not a party, that right will be subject to any obligation imposed by the contract to arbitrate (ie the third party will be obliged to arbitrate any dispute about its entitlement to enforce the right). Section 8(2) provides that if the third party does not fall within section 8(1), it may submit a dispute about enforcement of a right to arbitration (but is not obliged to do so).