The High Court has ruled that neither side will immediately recover the costs of an application to pause proceedings to wind up SK Fishing Limited while a wider commercial dispute is sent to arbitration.
The dispute arose from a fishing business operated since 2010 by two principals under an agreement containing a broad arbitration clause. Their joint enterprise later involved SK Fishing Limited, another company called Ronieran Limited and a partnership. After one principal died in February 2021, his widow and executrix effectively succeeded to his position in the business.
The respondent/petitioner commenced proceedings in June 2024 seeking to wind up SK Fishing and, days later, separate proceedings seeking dissolution of the partnership. The applicant subsequently initiated arbitration and sought a High Court stay of the winding-up case.
That was not a straightforward arbitration application. SK Fishing itself was not originally a party to the arbitration agreement. The respondent also argued that the applicant had lost any automatic entitlement to a stay under Article 8 of the UNCITRAL Model Law by already submitting his first statement on the substance of the dispute.
Rather than litigate those jurisdictional questions, the parties later agreed a new and substantially wider submission to arbitration. It brought the companies, the principals and the deceased principal's estate into the arbitration and extended the arbitrator's jurisdiction to the partnership, company and related financial disputes. The parties also agreed that the winding-up proceedings should be stayed.
Mr Justice Kennedy held that this compromise made the original stay application moot. But he rejected both sides' claims to have effectively won the motion. The final agreement went materially beyond what the applicant had originally sought and required concessions from both parties.
The judge therefore ordered that the costs of the stay application be costs in the cause of the winding-up proceedings. That means responsibility for those costs will be determined with the eventual outcome of the company case.