Arbitration analysis: The Court of Appeal held that a ‘subject’ provision in a contemplated fixture was a pre-condition to that fixture, the effect of which was to negative any intention to conclude a binding contract until such time as the subject was lifted, which, on the facts, had not been forthcoming. That meant that not only the fixture, but also the arbitration agreement contained therein, had never been concluded. The court stressed that whether an arbitration agreement has been concluded is subject to the usual contract formation rules and thus the separability principle has no role to play where the dispute was as to whether a legally binding agreement had ever been reached in the first place. The court’s relatively straightforward conclusion was that the respective parties had agreed in their negotiations merely that in the event that a binding contract was concluded, that contract would contain an arbitration clause, which of course did not amount to the agreement of an arbitration clause. This judgment, which is now the leading case on the separability principle, is of particular significance both for the shipping market, given the usual commercial practice of fixing a vessel ‘on subs’, and also more widely for all parties who are negotiating contracts including arbitration clauses. Written by Sally-Ann Underhill, partner, and Dimitris Athanasopoulos, associate at Reed Smith LLP.