In one of the first English High Court decisions relating to NFTs, Osborne Clarke has successfully defended New York-based Nifty Gateway LLC („Nifty“), operator of the digital assets platform niftygateway.com, against a claim brought by the well-known UK-based digital artwork collector, Amir Soleymani. The High Court held that it has no jurisdiction over the key parts of Mr Soleymani’s claim, and that the residual parts should be stayed in favour of the New York arbitration commenced by Nifty.
- To the extent that he entered into a binding contract with Nifty by reason of placing his successful bid, such a contract would be illegal under the Gambling Act 2005.
The jurisdictional „gateway“ relied upon by Mr Soleymani was CPR 6.33(2), on the basis that his claim was one which the Court had power to determine under s.15B of the Civil Jurisdiction and Judgments Act 1982 (the „CJJA“) – because (he said) the subject matter of his claim relates to a „consumer contract“ where the consumer is domiciled in the UK.
As regards the declarations sought by Mr Soleymani in respect of the arbitration clause, Deputy Judge Clare Ambrose held that the English Court has no jurisdiction.
The Judge agreed with Nifty that the purpose of these claims was to determine the existence / validity of an arbitration agreement, and therefore they fell within the „arbitration exception“ under Article 1(2)(d) of the Brussels Recast Regulation EU No. 1215/2012 (the „Regulation“). The consequence of this is that the claims fall outside the scope of the Regulation and therefore s.15B of the CJJA does not apply to them. The Judge rejected Mr Soleymani’s argument that the subject matter of his claims was in fact „consumer rights“ and not arbitration. At para. 61 of her judgment, the Judge held: „the Claimant’s claim for a declaration that the arbitration clause was not binding was within the scope of the arbitration exception and the Claimant failed to establish the better of the argument on satisfying the jurisdictional gateway relied upon in invoking the English court’s jurisdiction“.
The decision is an interesting development in the jurisprudence on the allocation of jurisdiction in crypto-asset cases. Nifty Gateway LLC was represented by Osborne Clarke’s Charlie Wedin, Henry Fox and Capucine de Hennin, who instructed Andrew Feld of Twenty Essex as counsel.
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