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LA9B9 International Arbitration

tag 1 Download8 Pages / 1,780 Words
  • Course Code: LA9B9
  • University: University Of Warwick

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  • Country: United Kingdom


Consider the following fictitious scenario:

Tomy Technologies Ltd (‘Tomy’) is a UK company which provides bespoke software solutions and training for fims in the Human Resources sector.

Sedgefield Greetings Cards Ltd (‘Sedgefield’) is a UK company which manufactures and supplies greetings cards to retail outlets across the UK and abroad. It advertises its cards via a brochure which is sent annually to its 10,000 customers (by e-mail and in hard copy) in the UK and abroad. Sedgefield is a large operation with 500 employees, all based in its London headquarters.

Sedgefield and Tomy entered into a contract for the provision by Tomy of a software package for the collection, retention and automatic updating of personal data of all of its staff. This software allows for this data to be kept in a special form of electronic spreadsheet which automatically updates when staff members update their personal details (or create a new staff account) in the already existing internal online staff database; it also allows for personnel reports, including the use of pie-charts, graphs and other data, to be taken off the system at the push of a button. The main benefit of the system is to streamline the current outdated online HR system, to bring together a number of databases into a single database, and to save time and effort.

The main operational clause of the contract is clause 15:

Tomy agrees to provide to the Human Resources department of Sedgefield a bespoke software package for the purposes outlined in Annex 1, and in addition no more than 300 hours of staff training on the use of the said software.

The arbitration clause is clause 44:

Any disputes arising out of this contract will be resolved by arbitration. The arbitrator shall be a sole arbitrator, to be agreed between the parties, whom failing to be chosen by the Chartered Institute of Arbitrators in London (if not agreed within 30 days of the dispute arising). The substantive law to be applied to the resolution of any such dispute is English Law. England is the seat of any arbitration under this clause and the full terms of the English Arbitration Act 1996 apply.

The contract provides that Tomy will install the software in Sedgefield’s London premises

during the period 1st-10th December 2016. You need not be aware of the content of the rest of the contract (including Annex 1).

On 7th December 2016, Ian Byte, a Director of Tomy (who is part of the installations team) was having a chat over coffee in the staff room with Alan Server, who works in Sedgefield’s marketing department. Alan asked Ian how the work was going, and as Ian explained the aims behind the software package being installed in the 100 computers in the HR department, Alan became interested. He could see how the system being explained by Ian could be used to update databases of customers and other marketing statistics and data held (and regularly updated) by the company. Towards the end of the discussion, Alan asked Ian if Ian could install this software onto his computer, and those of the other workers in the marketing department. Alan agreed, and they arranged to meet to carry out the installation the following week. That afternoon (on the day of the initial conversation between Alan and Ian), Alan obtained approval for his marketing department installation plan from Mr Steve Tameworth, the company’s HR Director.

One week later, Ian and Alan met and the software installation in the marketing department was carried out.

The following day, Alan arrived for work to find that his computer would not function at all. The same was the case for all of the computers in the marketing department. A computer technician from a different firm was asked to assess the situation urgently, and he came to the conclusion that there is a software incompatibility between the Tomy software package and the standard software on the marketing department computers (which operate with a different platform to the ones in HR). This, in his view, has caused the malfunction in the marketing department computers. The technician expressed the view that this incompatibility might have been spotted (and resolved) during pre-installation checks.

It took two weeks of intensive technical work to get the computers in the marketing department up and running again, and to check that all of the data was still there, leading to Sedgefield to incur certain direct and indirect costs (costs of reinstating the computers and loss of profit). Sedgefield is now seeking damages in a breach of contract arbitration Claim they have raised.


Set out the arguments for and against the arbitral tribunal having jurisdiction over this Claim.

Conclude (with brief reasons) on the argument (for or against) which you prefer.

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