In Gulf Import & Export Co v Bunge SA – Butterworths Law Direct 21.11.07 the Commercial Court considered whether there had been an ad hoc submission to arbitration of a matter that fell outside the FOSFA arbitration rules.

It was held that as the question in the present case was about the scope of the rules pursuant to which the arbitration was being conducted, the correct basis for the challenge to the appeal award was s 68(2)(b) of the Arbitration Act 1996 and that there had been a serious irregularity because the Board of Appeal had exceeded its powers under those rules. On the true construction of the FOSFA Rules of Arbitration and Appeal as a whole, the right of appeal under r 7 was unfettered such that the Board of Appeal could exercise its own discretion to allow a claim that had lapsed under r 3 to continue. The court also commented that if one was trying to spell out from conduct whether a party to an arbitration had made an ad hoc submission, that was an example of an implication of a contract from conduct to which the general principle in Baird Textiles Holdings v Marks & Spencer plc applied, namely that the conduct giving rise to the ad hoc submission to arbitration must be consistent only with an ad hoc submission.