London Sack & Bag [1943] 2 All ER 763

• Claimant and Defendant were both members of a trade association company. Articles of association stated that ‘trade disputes’ should be submitted to arbitration.

• Dispute between two members arose as to a transaction between them; one of pair refused to submit to arbitration and sued.

• Defendant sought to have court case stayed.

Held

• No rights of action can arise under articles in relation to matters which arise outside the ‘company relationship’

• Matter under dispute was a commercial trading transaction

  • Thus transaction had nothing to do with Claimant and Defendant’s membership of company.

• Thus article could not be enforced against Claimant.