Policy & Compliance
Know your BIFA Standard Trading Conditions 2021 – the last chapter
It was in March 2022 that the fi rst article in this series appeared and now in September 2024 we reach the last item
exist for use by BIFA Members registered in Scotland or Northern Ireland. Legal terminology and court rules and procedures differ between England, Scotland and Northern Ireland, but there are no significant differences in respect of the common law rules regarding liability. Comment on Clause 28(C) - (E) These sub clauses deal with the Company’s right to elect to arbitrate rather than litigate, and set out how that should be done, either by commencing arbitration or notifying the Customer of the requirement to arbitrate. This right is only in favour of the Company and this is because the intention is to ensure that any dispute is handled subject to English law and either by the English courts or under rules of the London Maritime Arbitrators Association (LMAA) based in this jurisdiction. This is to assist Companies with clients based in jurisdictions overseas where there are no reciprocal rights of enforcement of judgments. If the Customer is suing the Company, then it has to commence action in the English courts. If the Company is suing the Customer and the Customer is in a jurisdiction that does not have reciprocal rights of enforcement of judgments with England and Wales, then if the Company was only able to litigate through the courts, if it won the case it would not have the right to enforce against its Customer. However, if it arbitrates, most of the countries that do not have reciprocal rights to enforce judgments with England and Wales have ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, so Companies using arbitration in their claims against Customers will generally be able to enforce their judgment against their Customer in the jurisdiction where they are based.
Jurisdiction and law CLAUSE 28 Clause 28(A)
These Conditions and any act or contract to which they apply shall be governed by English law. Clause 28(B) Any dispute arising out of any act or contract to which these Conditions apply shall, save as provided in (C) below, be subject to the exclusive jurisdiction of the English courts. Clause 28(C) Notwithstanding (B) above, the Company is entitled to require any dispute to be determined by arbitration. Clause 28(D) The Company may exercise its rights under (C) above either by itself commencing arbitration in respect of a dispute or by giving written notice to the Customer In the event that the Company exercises its rights under (C) above, the corresponding arbitration shall be conducted as follows: (i)Where the amount claimed by the claimant is less than £400,000, excluding interest, (or such other sum as the Company and Customer may agree, and subject to (iii) below), the reference shall be to a tribunal of three arbitrators and the arbitration shall be conducted in accordance with the LMAA Intermediate Claims Procedure applicable at the date of the commencement of the arbitration proceedings; (ii)Where the amount claimed by the claimant is less than £100,000, excluding interest, (or requiring a dispute to be determined by arbitration. Clause 28(E)
“ These important sub clauses stipulate the application not only of English law but also the exclusive jurisdiction of the English courts, subject to a right in favour of the Company introduced under the 2017 STC to require any dispute to be determined by arbitration
such other sum as the Company and Customer may agree, and subject to (iii) below), the reference shall be to a sole arbitrator and the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure applicable at the date of the commencement of the arbitration proceedings; (iii)In any case where neither of the LMAA procedures referred to in (i) and/or (ii) above applies, the reference shall be to three arbitrators in accordance with the LMAA Terms applicable at the date of the commencement of the arbitration proceedings. Comment on Clause 28(A) and (B) These important sub clauses stipulate the application not only of English law but also the exclusive jurisdiction of the English courts, subject to a right in favour of the Company introduced under the 2017 STC to require any dispute to be determined by arbitration. Separate versions of the BIFA STC
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