Grosskopf v Grosskopf & anr [2024] WTLR 530

Analysis

The parties were siblings and beneficiaries of a trust established by their parents. In addition, the defendants were also the trustees. The claimant applied to appoint a judicial trustee in place of the defendants on the basis that the defendants had engaged in conduct that appeared to have been in breach of their duties as trustees or may have been dishonest. The parties had previously entered into an arbitration agreement before the Beth Din of the Federation of Synagogues. The court and the tribunal had previously determined that the tribunal had jurisdiction to consider the claim. The claimant contended that the tribunal did not have jurisdiction because the power to appoint a judicial trustee was only exercisable by the court, making it inarbitrable.

Held:

1. (1) There was no English authority directly on the point, but Rinehart v Welker [2012] (obiter) expressed the view that an agreement to submit a dispute about the removal of a trustee to arbitration was not contrary to public policy, and the fact that an arbitrator cannot grant all the relief a court is empowered to grant does not mean that the dispute is incapable of arbitration. A similar approach was taken by common-law jurisdictions to the analogous situation of whether the relationship between shareholders had broken down in the context of an application for a winding-up petition. In such cases, matters in dispute could be resolved by arbitration notwithstanding that only a court could make a winding-up order. That approach was confirmed in FamilyMart China Holding Co Ltd v Ting Chuan (Cayman Islands) Holding Corp [2023].
2. (2) The fact that a claim sought relief which the tribunal could not grant did not make the dispute inarbitrable as:
   1. (a) the grounds on which the appointment was sought were clearly suitable for resolution by arbitration; and
   2. (b) in such an arbitration, the tribunal would have the power to make a direction as to the defendants’ position which could, if necessary, be enforced outside the arbitration.
3. (3) The fact that a claimant was seeking a remedy in legal proceedings that was not available in the arbitration did not justify refusing a stay under s9 of the Arbitration Act 1996. The non-availability of the remedy was simply a consequence of the fact that the parties had agreed to resolve their disputes by arbitration under a different system of law with different procedures and remedies (Société Commerciale de Reassurance v Eras International Ltd [1992] applied).

JUDGMENT MASTER CLARK: [1] This is my judgment on the defendants’ application dated 24 January 2023 seeking: (1) a stay of the claim pursuant to s9 of the Arbitration Act 1996 (‘the 1996 Act’); alternatively (2) to strike out the claim as an abuse of process. Parties and the claim [2] The claimant, Chaim Grosskopf, …

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