Destin Trading Inc v Saipem SA [2025] EWHC 668 (Ch)

In refusing a stay under s. 9 of the Arbitration Act 1996, the High Court has endorsed the principle in Monde Petroleum v Westernzagros [2015] 1 Lloyd’s Rep 330 – that a dispute resolution clause in a (subsequent) settlement agreement will generally supersede an earlier and inconsistent dispute resolution clause in a (prior) contract – and confirmed that it remains applicable following the Supreme Court decision in Mozambique v Privinvest [2023] UKSC 32.

Under a termination / settlement agreement the parties terminated, and compromised disputes under, a number of project frame agreements. The settlement agreement contained an exclusive jurisdiction clause (EJC) in favour of the English courts, whereas the frame agreements provided for ICC arbitration. The claimant (Destin) brought a claim to set aside the settlement agreement on grounds of fraudulent misrepresentation and for monetary relief valued (in part) by reference to what would have been earned under the frame agreements but for the compromise (and the alleged misrepresentation). The defendant (Saipem) applied for a stay of the monetary relief claims in favour of arbitration, on the basis that those claims arose out of or in connection with the frame agreements and were not covered by the EJC.

Andrew Lenon KC, sitting as a High Court judge, found that the arbitration agreements were inoperative for the purposes of s. 9(4) of the 1996 Act. He therefore rejected the stay application, holding (at [35]) that Monde is “clear authority for the proposition that dispute resolution clauses in a settlement or termination agreement should generally be construed on the basis that they are intended to have a superseding or overriding effect”; and (at [40]) that, even if the court applied the two-stage test in Mozambique v Privinvest, the application would still fail at the first stage (identifying the substance of the dispute between the parties) because in substance the “legal source” of the monetary relief claims was the settlement and the general law of deceit, not the frame agreements.

To read the full judgment, please click here.

Adam Cloherty KC acted for the successful claimant/ respondent, instructed by Bird and Bird LLP.