Summary

1. The claimants in this case were customers holding accounts with a digital asset trading exchange. Following the winding up of the company which operated the trading exchange, the claimants commenced the present representative proceedings seeking damages for fraudulent misrepresentation against the defendants, who were the former management of the company. The defendants applied for a stay of the proceedings in favour of arbitration, based on an arbitration clause in the customer service agreement. However, the defendants were not parties to this customer service agreement, which was between the company and each customer. The defendants' stay applications therefore raised the question of when a third party to a contract could rely on an arbitration clause in the contract.

2. I dismissed the defendants' applications. I now set out the grounds of my decision.

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Contract - Privity of contract - Whether third parties can rely on arbitration clause by virtue of Contracts (Rights of Third Parties) Act 2001