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Abuse of Process: the Interplay Between Arbitration and Litigation

28 September 2012
The case of MWP v Sinclair, Sokol and others addressed whether an abuse of process arises where A brings a court action against B where A has already arbitrated the same issues with C. The Commercial Court found that it this was an abuse of process, since it effectively meant that a party was re-litigating issues that had already been the subject of an arbitral decision. However, this does not mean that a party is not free to bring the same claims against a second party, but that, if there is a demonstrable relationship between the first and second defendants which would make it "manifestly unfair" to re-litigate the claim, this would be considered an abuse of process. In this case, it was the particular circumstance of party A alleging that party C had dishonestly assisted party B in committing a breach of fiduciary duty which led to the court to find that it would be an abuse of process for party A to pursue a claim against party C with respect to issues which had already been decided in an arbitration between party A and Party B.

This case gives reassurance to arbitration practitioners as it asserts the integrity of the arbitral process and discourages parties from attempting to circumvent the arbitral process by subsequently bringing litigation over the same issues against a different party, although it should be noted that an abuse of process will only be found where there it would be "manifestly unfair" to re-litigate the subject of an arbitral award.

Simon Nesbitt

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