Failure to pay advance on costs not always a repudiatory breach of the arbitration agreement (BDMS v Rafael Advanced Systems)

Table of contents

• Judgment details
• Key points for practitioners
• The defendant's refusal to pay the advance on costs
• The claimant's arguments on repudiatory breach
• Could the arbitration agreement be inoperative even if there was no repudiatory breach?
• At what point is 'inoperability' to be assessed?

Article summary

Arbitration analysis: On 26 February 2014, Hamblen J, sitting in the Commercial Court, granted a stay of proceedings in favour of arbitration pursuant to s 9 of the Arbitration Act 1996 having rejected the claimant’s argument that the defendant had repudiated the arbitration agreement between them by refusing to pay its share of an advance on costs in an ICC arbitration proceeding. In this article, we analyse the court’s decision, which is of significant interest to arbitration practitioners.