Whether court should extend time to commence arbitration proceedings based on conduct of the defendants
Section 12 of the Arbitration Act 1996 provides (in relevant part) that " Where an arbitration agreement to refer future disputes to arbitration provides that a claim shall be barred…unless the claimant takes within a time fixed by the agreement some step…(a)to begin arbitral proceedings…the court may by order extend the time for taking that step…The court shall make an order only if satisfied….that the conduct of one party makes it unjust to hold the other party to the strict terms of the provision in question". The issue in this case was whether there had been such conduct by the defendants.
The defendants had participated in proceedings in Belgium but it was common ground that they did not thereby waive their right to arbitrate and nor had they submitted to the jurisdiction of the Belgium courts. (When the Belgian courts held that the dispute ought to be arbitrated instead, the claimant sought this extension of time to commence such arbitration). The claimant argued that until the defendants had taken the point some 2 and a half years after the commencement of the Belgian proceedings, it had believed that there was no dispute as to the jurisdiction of the Belgian courts. However, Burton J held that that did not amount to the sort of conduct referred to in section 12. The defendants had been entitled to act as they did and had not been required by the Belgian courts to take the jurisdiction point any earlier. The claimant ought not to have assumed that the defendants had no issue with Belgian jurisdiction.
Accordingly, the claimant was not entitled to an extension of time to commence arbitral proceedings.