Clifford Chance

Court of Appeal rules on primacy of consumer rights over party autonomy to agree to arbitrate disputes

20 October 2022

In Soleymani v Nifty Gateway LLC (CMA Intervening), a UK-based collector of non-fungible tokens ("NFT") participated in an NFT auction run by a New York-based marketplace (Nifty Gateway), which was subject to T&Cs on a website. Following a dispute about the validity of the auction, the collector challenged the New York arbitration and governing law agreement in the T&Cs in the English courts as unfair under UK consumer protection laws and claimed that the auction contract was invalid under the UK's Gambling Act.

The Court of Appeal held that the English courts had no jurisdiction to hear the direct challenge to the arbitration agreement. However, it lifted a stay on the other claims and ordered a trial as to whether the arbitration agreement is unfair. It made clear that the vindication of an English consumer's rights takes precedent over other factors in favour of allowing a "foreign" arbitrator to decide the matter. This decision impacts on any business that sells goods, services or digital assets to customers in the UK and uses arbitration, governing law or foreign choice of court agreements in any online T&Cs.

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