In <span class="news-text_italic-underline">Orange Transgroup Ltd and another v Shein Distribution UK Ltd [2025] EWHC 2966 (KB)</span>, the High Court (England and Wales) granted stays of English proceedings in favour of ICC arbitration, relying not on section 9 of the Arbitration Act 1996 but on its inherent jurisdiction. The core issue was whether a valid arbitration agreement existed, as one of the key contracts relied upon by Shein had allegedly been executed by an individual, “Bill”, who Orange said had no actual or ostensible authority to bind it. This placed the existence and validity of the arbitration agreement in dispute.
The parties had entered into a services agreement containing an arbitration clause and a supplemental agreement, both signed by Bill for Orange. Shein commenced ICC arbitration, seeking repayment of prepayments allegedly owed by Orange. Orange denied that Bill had any authority to execute the contracts and, together with IT Way, issued English court proceedings. Shein applied to stay those claims for arbitration; the claimants, in turn, argued that Shein had accepted the court’s jurisdiction by not filing a CPR 11 application.
Dexter Dias J dismissed that argument, noting that Shein had filed its stay applications within the CPR 11 time limit and had made clear throughout that it disputed jurisdiction. Requiring a separate CPR 11 application would have been unnecessarily duplicative and if this was wrong, the judge confirmed he would have used CPR 3.10 to rectify any procedural defect.
Turning to the stay applications, Dexter Dias J found that the question of Bill’s authority raised a substantial issue going to the very existence of the arbitration agreement. While arbitration clauses are legally separable from their host contracts, an allegation of lack of authority affects both the main contract and the arbitration clause. The evidential record before the Court was noticeably thin and the judge considered that the arbitrator was the more appropriate decision maker under section 30 of the Arbitration Act 1996, particularly given the imminent arbitral timetable and the opportunity for the parties to present evidence properly in that forum.
Because section 9 of the Arbitration Act 1996 requires a court to be satisfied that a valid arbitration agreement exists before granting a stay and because that threshold could not be met on the material available, the judge instead relied on the Court’s inherent jurisdiction. In doing so, he followed the well-established principle that inherent stays may be granted where it is sensible for the arbitral tribunal to address the matter first, provided the tribunal is equipped to do so and the stay will not prejudice the parties. He also stayed IT Way’s claims, noting Shein’s undertaking that it would not oppose IT Way’s participation in the arbitration and that a stay avoided the risk of parallel proceedings and inconsistent outcomes.
The judgment is noteworthy for its confirmation that a stay sought on the basis of an arbitration clause can make a CPR 11 application unnecessary, offering a pragmatic procedural approach. It is also significant because stays under inherent jurisdiction are traditionally granted only in exceptional circumstances, yet the judge considered the combination of the incomplete evidential picture and the clarity of the arbitral timetable sufficient to justify deploying this discretion.
