Reference no: EM133815069
Case Study
France-based FR-Lux has entered into a luxury vehicle distribution contract with DIFC-based Brics-L in 2019. The contract contains a DIFC-LCIA arbitration clause (with the seat of the arbitral tribunal in the DIFC) and provides that the contract is subject to English law. The arbitration clause stipulates that the arbitral tribunal will be composed of three arbitrators, with each party appointing one arbitrator and the two arbitrators appointing the presiding arbitrator. After a few years' performance of the contract, a subsidiary of Brics-L, Co-Lux, also based in DIFC, became involved in product distribution in the UAE. Not all invoices sent by FR-Lux were paid. FR-Lux decided to assign part of its receivables from Brics- L to an assignee, DIFC-based KreDIT. In order to finalize matters, FR-Lux is asking you the following questions:
1) FR-Lux wishes to file an arbitration claim against both Brics-L and Co-Lux for non-payment of invoices. Is Co-Lux bound by the arbitration agreement? Which law applies to the international arbitration agreement?
2) FR-Lux tells you that it discovered that the distribution contract was signed (in 2019) by the former CEO of Brics-L, who had recently retired and no longer had the authority to legally represent Brics-L. However, FR-Lux believes that it acted in good faith and that Brics-L should be bound by the arbitration agreement. What do you think of this in the light of the DIFC Arbitration Law/ DIFC Court case law?
3) FR-Lux informs you that it plans to submit a request for arbitration to the Dubai International Arbitration Center (DIAC) in the next few days, but would like to ask you about the following two points: - since the DIFC-LCIA center provided for in the contract has disappeared, can FR-Lux refer the arbitration claim to DIAC? - What would happen if Brics-L were to refer the matter to the DIFC court, seeking a ruling that it owed nothing to FR-Lux, and FR-Lux invoked the arbitration clause to oppose the jurisdiction of this court?
4) Assuming that FR-Lux can submit a request for arbitration to DIAC, what would happen if Brics- L refused to take part in the arbitration and therefore to appoint an arbitrator? 5) Can KreDIT, the assignee of the claim assigned by FR-Lux against Brics-L, file an arbitration claim under the arbitration clause contained in the distribution contract?