Damages Availabale for Breach of Arbitration Clause

When a party who has signed an arbitration clause fails to comply and brings suit, the other party generally has a right to go to court to compel arbitration. But does bringing the suit also entitle the other party to damages?  That was the question in a recent English Court of Appeal case, Sunrock Aircraft Corporation Limited v Scandinavian Airlines System Denmark-Norway-Sweden, [2007] EWCA Civ 882.

And the answer, said the Court, is yes. Failure to comply with a contractually agreed-upon term is a breach of contract. It would therefore entitle the other party to any damages that would ordinarily flow from any breach of contract.  Jeremy Glover of London’s Fenwick Elliott LLP offers a rundown of the case and commentary in Is There A Remedy For Breaching The Dispute Resolution Provisions Of A Contract? (Free registration required.)

[Frank Snyder]