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ARTICLE · 01 SEPTEMBER 2023

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High Court Refuses To Enforce Arbitration Award Relating To Crypto Consumer Contract

Cooley LLP
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In Payward, Inc. and Others v. Chechetkin, the High Court of England and Wales refused the claimants' claim for the enforcement of a US arbitration award against a UK-based consumer.

United StatesLitigation, Mediation & Arbitration
Juan Nascimbene
Juan Nascimbene
Alicia Johnson-Cole
Alicia Johnson-Cole
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In Payward, Inc. and Others v. Chechetkin,1 the High Court of England and Wales refused the claimants' claim for the enforcement of a US arbitration award against a UK-based consumer. The court ruled that enforcement of the award would be contrary to public policy as it contravened key provisions of the Consumer Rights Act 2015 (CRA) and the Financial Services and Markets Act 2000 (FSMA).

Background

Maxim Chechetkin brought a claim in the English courts against Payward - which operates Kraken, a cryptocurrency exchange - for losses of more than £600,000 he incurred whilst trading on its exchange. His case was that Payward's activities in the UK amounted to dealing in or arranging deals in investments, which constituted regulated activities that Payward was not authorised to carry on. Section 26 of the FSMA provides that agreements made by a person carrying on an authorised activity without authority to do so are unenforceable.

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