In a recent decision refusing permission to appeal on a point of law under s.69 of the English Arbitration Act the English Commercial Court has provided guidance on the scope of agreements to appeal.

The law

  • S.69(1): unless the parties otherwise agree, a party to arbitral proceedings may appeal to the court on a question of law arising out of an award.
  • S.69(2): an appeal shall not be brought except with the agreement of all the other parties to the proceedings, or with the leave of the court.
  • S.69(3): leave to appeal shall only be given if the court is satisfied that certain criteria are satisfied, including: that the determination of the question will substantially affect the rights of one or more of the parties.

The case

In ST Shipping and Transport PTE Ltd v Space Shipping Ltd [2016] EWHC 880 (Comm), the parties had entered into a Charterparty that included an arbitration clause in which they agreed either party could “appeal to the High Court on any question of law arising out of an award.”

A dispute arising under the Charterparty was referred to arbitration and a partial final award issued.  The Charterers appealed to the court under s.69 citing a number of issues of law.  They argued that they did not need permission to appeal because the arbitration clause satisfied the s.69(2) requirement of “agreement of all the other parties to the proceedings”.

Popplewell J held that one of the issues involved no question of law; it was in reality an appeal against a finding of fact.  In dismissing this issue he noted, “It hardly needs repeating that it is the policy of the 1996 Act to prevent such illegitimate attempts to go behind a tribunal’s findings of fact.

The Owners argued that the remaining issues did not fall within the scope of the agreement to appeal because it was to be construed as an agreement to the bringing of appeals only if and to the extent that the questions of law will substantially affect the rights of the parties. The remaining issues could not succeed as a result of the finding of fact referred to above, meaning that their determination would not substantially affect the rights of the parties so they did not fall within the agreement to appeal.

Popplewell J held that the arbitration clause was clearly drafted with the terms of s.69 in mind.  This meant that the scope of the agreement to appeal must be limited to a question of law whose determination by the court may serve a useful purpose for the parties and is not academic.  The issue is whether the determination of the question of law will substantially affect the rights of the parties.  It is for the party asserting that he does not need permission to appeal, on the grounds that he has an agreement to appeal, to establish that fact by adducing evidence with his application (unless it’s obvious from the terms of the award).

The Judge was not satisfied that these criteria were fulfilled.  Permission to appeal was therefore required but refused.

Points to remember

  • Where there is an agreement to appeal that has been drafted with s.69 in mind, the courts are likely to construe it as an agreement to the bringing of appeals only if and to the extent that the questions of law will substantially affect the rights of the parties.
  • The courts will not be duped into reopening tribunal’s findings of fact in circumstances where they are dressed up as appeals on a point of law.