Panda Corporation Ltd v Talisman Securities Ltd et Al

• Jurisdiction: Anguilla
• Court: High Court (Saint Christopher, Nevis And Anguilla)
• Judge: Saunders, J
• Judgment Date: 13 October 2000
• Neutral Citation: AI 2000 HC 9
• Docket Number: Civil Suit No. 54 of 2000
• Date: 13 October 2000

High Court

Saunders, J.

Civil Suit No. 54 of 2000

Panda Corporation Ltd.

and

Talisman Securities Ltd. et al

Appearances:

Ms. K. Porter for the plaintiff

Ms. J. Gumbs-Connor for the defendant

Arbitration agreement - Application for order to stay arbitration proceedings — To grant stay not in interest of public policy.

Saunders, J

1 The defendants are stockbrokers and investment advisers. The plaintiff retained them to conduct trades in securities on its behalf on the American market. On 14 ^th February, 2000 the plaintiff terminated the services of the defendants and revoked their authority to conduct any further trades on its account. The plaintiff alleges that subsequent to this date the defendants liquidated the plaintiff's stock portfolio, withdrew the sum of US$20,805.00 from the Plaintiffs account and fraudulently and/or wrongfully converted that sum to their own use. The plaintiff has therefore instituted these legal proceedings for the aforesaid sum. Damages for breaches of duty and/or trust are also claimed.

2 The defendants were served with the writ on 15 ^th May, 2000. The writ was indorsed with a statement of claim. The defendants filed an entry of appearance on May 23 ^rd. On June 27 ^th, the plaintiff obtained judgment in default of defence. By sheer coincidence, on that very day, some four hours after the default judgment was obtained but before it was served, the defendants filed this summons seeking to stay these proceedings.

3 The relationship between the parties had been governed by a written agreement that contained an arbitration clause. The clause is very wide in its terms. It states:

“It is agreed that all controversies which may arise between us, concerning business with the undersigned, this agreement or any other agreement between us of the performance or the breach thereof, or subsequent to the date thereof, shall be determined by arbitration. Any arbitration shall be in accordance with the provisions of the constitution and the Rules of the Board of Directors of the New York Stock Exchange or pursuant to the code of arbitration of the National Association of Securities Dealers as the undersigned may elect……..”.

4 The plaintiff resists the application to stay. Firstly, the plaintiff alleges that the reliefs claimed in the statement of claim are not based upon the contract that had been entered into between the defendants and the plaintiff. The plaintiff asserts that the alleged misappropriation of the funds took place after the termination of the contract. Secondly, the plaintiff says that the defendants acted fraudulently and have no defence to the plaintiff's claims. Thirdly, it was submitted that to undergo arbitration would “unnecessarily and unjustly increase the plaintiff's costs and expenses and expose the plaintiff to further hardship”. Finally, the court is reminded that the plaintiff already has a judgment in its favour and that judgment, it is said, stands as evidence of the defendants' delay in making this application.

5 As to the first of these objections I cannot agree. As I have already noted, the arbitration clause is very broad in its terms. It covers not only the content of the plaintiff's agreement with the defendants but it goes further. It also extends to any controversies arising concerning the plaintiff's business with the defendants. In my view, it matters not whether the matters about which the plaintiff complains took place before or after the plaintiff purported to terminate their relationship with the defendants. Either way, those matters would still fall within the arbitration clause. An arbitration clause must be seen as embodying within itself a self-contained agreement collateral to the containing contract. It has therefore always been the...