Discover a rare legal case where the English Commercial Court refuses to enforce a foreign international arbitration award, citing public policy concerns. This unusual decision sheds light on the importance of the governing law in international arbitration cryptocurrency disputes and the importance of considering consumer legislation when drafting dispute resolution provisions. The case involves a UK-based lawyer who lost over £600,000 trading on a crypto platform and sought redress under UK consumer legislation. This article examines the court's reasoning, the impact on arbitration agreements, and the implications for businesses operating in the crypto space. It's a must-read for anyone interested in cryptocurrency, consumer contracts, and the evolving landscape of international arbitration.
One size does not fit all in business-to-consumer contracts
In a rare decision, the English Commercial Court has refused to enforce an international arbitration award on the grounds that to do so would be contrary to public policy. The decision reinforces the ability to submit cryptocurrency disputes to arbitration, whilst also reinforcing the ability to submit disputes arising under business-to-consumer contracts to arbitration.
However, the decision stresses the importance of considering where parties are based and operating when considering disputes relying on consumer legislation which is prevalent in business-to-consumer contracts, including those in the cryptocurrency space. In the judgment, the Court determined that enforcement of the award would be contrary to public policy when considering the specifics of this dispute. In particular, enforcement would be contrary to public policy because of the application of UK consumer legislation and the Financial Services and Markets Act 2000 ("FSMA") which requires the issues in in dispute to be determined by English law, as opposed to by a foreign law.
A 'one-size-fits-all' approach does not necessarily work in the context of consumer contracts and care should be given to the parties to these contracts and the jurisdictions in which they operate.
As the cryptocurrency industry and consumer protection laws continue to evolve, so must your strategies. If you're currently navigating cryptocurrency transactions or business-to-consumer contracts or will be in the future, please get in touch with one of our specialists to see how we can help you.
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