Case Alert - [2018] EWHC 538 (Comm)

Judge rules that appeal against an award (following correction of the award) was made too late

After an award was issued, the claimant applied under section 57(3) of the Arbitration Act 1996 ("the Act") to correct certain clerical errors. This was done 27 days after the award was issued. The claimant then sought permission to appeal the award under section 69 of the Act some 24 days later.

Section 70(3) of the Act provides that a section 69 application must be brought "within 28 days of the award or, if there has been any arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of that process". The first issue to be considered in this case was whether the 28 days ran from the date of the award or from the date of the correction.

The claimant sought to rely on the case of Surefire Systems v Guardian [2005], in which it was held that time ran from the date of an arbitrator's clarification. However, no authority was cited in support of that decision and the judge did not give reasons. In this case, it was held that K v S [2015] had set out the correct position: namely, that the reference to "any arbitral process of appeal or review" does not apply to corrected awards, which are not the same thing. The fact that a party has sought a corrected award does not, without more, extend time. The judge also agreed with the decision in Essar Oilfields v Norscot that where there is a material application for a correction pursuant to section 57, the 28 day period does run from the date of the corrected award (but that was not the case here): "Challenges to arbitration awards are strictly limited by the Arbitration Act…. I … consider that an application for correction of an award is material and will properly serve to postpone the running of the 28-day period until the date of the corrected award where the correction is necessary to enable the party to know whether he has grounds to challenge the award. .. However, where the grounds for challenge are known and are not dependent upon the outcome of the application for clarification then there is no good reason to postpone the running of the 28-day period until the date of the corrected award... To do so would unnecessarily delay the making of a challenge to an award. That would be contrary to the aim and object of the Act to promote the finality of arbitration awards".

The judge also declined to exercise his discretion to extend time pursuant to section 80(5) of the Act. The factors which the court has to take into account when deciding whether to exercise this discretion include the following:

(1) The length of the delay. The judge said that this should be measured against the 28 days provided for in the Act: "Therefore a delay measured even in days is significant". The delay here was described as substantial.

(2) Whether the claimant had acted reasonably. This was said to include an investigation of the reasons for the delay and here "the fact that "Korean corporations have very hierarchical management structures and take a considerable period of time in relation to important issues does not begin to justify delay".