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ARBITRATION CLAUSE

October 29th, 2026 by James Goudie KC

The underlying question in the appeal to the Supreme Court in KINGDOM OF SPAIN v LONDON STEAMSHIP OWNERS MUTUAL INSURANCE ASSOCIATION ( 2026 ) UKSC 36, a case arising from an environmental disaster, was how the PRINCIPLE THAT A THIRD PARTY CANNOT TAKE THE BENEFIT OF A CONTRACT WITHOUT ACCEPTING ITS BURDEN ( the conditional benefit principle ) applies to a contract containing an arbitration clause. The Court rules that a third party entitled to enforce a contract containing an arbitration clause who chooses to take that benefit by asserting a claim under the contract thereby becomes bound by the arbitration clause in the same way as a party to the contract.

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