An arbitration award has been handed down - but what is the deadline to appeal the award to the English courts? And when does time start running where there is an application for correction of the award? The recent case of Daewoo Shipbuilding & Marine Engineering Company Ltd -v- Songa Offshore Endurance Ltd  EWHC 538 (Comm) provides useful clarification and guidance on the running of time for appeals in the context of applications under the slip rule.
The starting point is that if an arbitration award is to be appealed to the High Court pursuant to the Arbitration Act 1996, section 70(3) of the Act provides that the appeal must be lodged either:
- Within 28 days of the date of the award; or
- If there has been any arbitral process of appeal or review, within 28 days of the date when the appellant is notified of the result of the process.
In this case, the claimant alleged that a section 57 application for correction of the award was an arbitral process of appeal or review and would result in the 28 day appeal window running from the date on which the tribunal notified the parties of the result of that application - not from the date of the award. The particular application made by the claimant consisted of corrections of clerical errors only. The court held that the process for correction or clarification of an award under section 57 was not an ‘arbitral process of appeal or review’ under section 70(3) and therefore an application for such a correction will not extend the window in which an appeal to the High Court can be made. However, if the correction or clarification requested is a material correction (i.e. one which is necessary to allow the award to be challenged) then the 28 day deadline will run from the date of the correction or clarification. For instance, an application requesting an additional award for an issue not decided by the tribunal but put to it by one of the parties is an illustration of a material correction for these purposes.
Mr Justice Bryan held that a section 57 application could not be a process of appeal or review for the purposes of section 70(3) for three reasons:
- The ordinary and natural meaning of section 70 as a whole clearly differentiated between an appeal or review and a correction. Bryan J held that a reference to a ‘relevant process’ must be one by which an award is subject to appeal or review by another arbitral body;
- There was recent authority which held the same outcome; and
- The fundamental principles of the Arbitration Act 1996 are to ensure arbitration obtains fair resolution without unnecessary delay or expense. Bryan J held that the principles of finality and speed would be undermined if an application for any correction had the outcome of extending the time in which an appeal may be lodged.
However, where a clarification of the award is a necessary prerequisite of challenging the award, section 70(2) requires that all arbitral recourse to the tribunal is sought before making an appeal to the High Court. In these circumstances, as illustrated in the earlier example where an award does not deal with an issue put to the tribunal by one of the parties, the deadline for bringing an appeal will be 28 days from the date of the correction - the judge held ‘the purpose is to ensure that before there is any challenge, any arbitral procedure that is relevant to that challenge has first been exhausted. Thus if there is a material ambiguity that is relevant to the application or appeal you must first go back to the arbitrators, whereas if you are seeking to correct typos then that is not a bar to you pursuing your application. It is only where a matter is material that you first have to exhaust the available remedies specified in section 70(2), so that it is only in those circumstances that it is necessary for time only to run after those available remedies have been exhausted. The judge in the case considered that a section 57 correction which is material to any application to appeal should be easy to identify. However if ever there is uncertainty as to the materiality of a section 57 correction being sought, we recommend that either an appeal is lodged within the 28-days of the original award, with liberty to amend at a later date if necessary; alternatively that an application is issued to obtain an extension of time in which to lodge an appeal beyond the 28 days from the date of the original award.
In closing, the judge was not attracted by the claimant’s secondary argument seeking excusal for its 24 day delay in circumstances where the period for bringing the application ought to have been 28 days. In dismissing this argument, the judge drew from previous authority in expressing his view that a delay measured in days is significant, whilst a delay of weeks and months is substantial. Furthermore, the granting of an extension of time does not arise as a matter of right; rather, reasons for the extension are required. In this case, no explanation was provided by the claimant as to why an extension was being sought.
This case demonstrates the importance that the court gives to the principles of speed and finality, and serves as a reminder to parties of the need to adhere to deadlines and to bring applications in a timely manner.