Background

In Rollitt v Ballard [2017] EWHC 1500 (TCC), an ad hoc arbitration with the seat in England, the Claimant applied in February 2016 for a ruling that the arbitrator did not have jurisdiction. On 12 May 2016 the arbitrator notified the parties that the Award on the preliminary issue had been completed and that it would be published on payment of cleared funds in respect of his fees of £4,052.88. The parties disputed between themselves who was liable for the fees and, as a consequence, the Claimant did not send a cheque for the fees until 19 July 2016. On 8 August 2016, after receiving cleared funds, the arbitrator sent the Award dated 12 May 2016 to the parties.

On 5 September 2016 the Claimant issued an Arbitration Claim Form seeking permission to challenge the Award. At the same time the Claimant applied for an extension of time for issuing the Claim Form as under section 70(3) of the Arbitration Act 1996 the application for permission to appeal should have been filed within 28 days of the date of the Award, viz on or before 9 June 2016.

Decision

Notwithstanding the time limit in section 70(3) of the Arbitration Act 1996, section 79 gives the court power to extend the deadline if satisfied that otherwise a substantial injustice would be done. This was considered in Terna v Al Shamsi [2012] EWHC 3283 (Comm) which decided that the primary factors to consider when deciding whether to extend a deadline are:

  1. the length of the delay;
  2. whether the delaying party was acting reasonably in allowing the time limit to expire; and
  3. whether others had contributed to the delay.

Although the judge found that the Claimant had not deliberately delayed its request for an extension of time, the judge was of the opinion that the Claimant had no reasonable explanation for the 88 day further delay after 9 June 2016. Critically, the judge found that the Claimant had acted unreasonably in allowing the statutory 28 day period to expire while the parties disputed who should pay the arbitrator’s fees.

As part of its judgment the court affirmed that these strict time limits reflect the purpose of the Arbitration Act 1996, namely to obtain a fair resolution of disputes by a tribunal without unnecessary delay or expense and to promote the finality of arbitration awards.

Comment

This decision shows that when deciding whether to challenge an arbitral award, it is of the utmost importance to keep track of the statutory 28 day period running from the date of the award.

The courts generally consider that the party, who wishes to reserve its right to take the matter to the court, should take appropriate steps and ensure that the award is issued in time to enable the application to be made.

A dispute over payment of the arbitrator’s fees will not be sufficient reason for delaying. Therefore, the very short-term saving of the costs of the arbitration may be far outweighed by the cost of being out of time to challenge the award.