Clarifying when time for appealing a GAFTA jurisdiction award commences under S67 Arbitration Act 1996 – PEC LTD V Asia Golden Rice Co Ltd [October 2012]

The facts

Asia Golden Rice (“AGR”) alleged that in May 2008 it had agreed to sell to PEC 25,000 mts of rice, but PEC had failed to perform the agreement. PEC denied the existence of any agreement, and the issue of whether an agreement had been made, as well as the substantive dispute, was referred to a GAFTA tribunal at the first tier level.

The GAFTA tribunal made its award on 2 July 2012 and held that it had jurisdiction because an agreement was made incorporating the GAFTA Arbitration Rules. US$6,250,000 was awarded to AGR in damages plus interest, fees and costs. PEC appealed to the GAFTA Board of Appeal on the substantive issues and, as to jurisdiction, to the Court under S67 of the Arbitration Act 1996 (“AA”).

S70(3) AA provides that any such appeal under S67 AA “must be brought within 28 days of the date 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”. If time counted from the date of the award of the GAFTA tribunal at the first tier, PEC would have missed the statutory time limit by 8 days. PEC argued that the 28 day period was calculated from the date of any appeal award issued by the GAFTA Board of Appeal. Alternatively, if time did run from the date of the first tier award, then an extension of time should be granted.

The decision

The parties agreed that the Court should grant a time extension, but the decision addressed the uncertainly of time limits on such appeals.

  1. The GAFTA award determined the question of jurisdiction. Given that an award on jurisdiction could not be appealed to the GAFTA Board of Appeal, the GAFTA award on jurisdiction was final and binding. Therefore any appeal as to jurisdiction could only be raised under S67 AA. Therefore, the 28 day period was to be calculated from the date of the first tier GAFTA award despite the other aspects of the award being appealed to the GAFTA Board of Appeal.
  2. The extension of time was necessary and should be granted. The delay was intended to be minimal, and no prejudice would be suffered if the extension were granted. The delay was also explicable due to the uncertainty of the operation of the time limits under the GAFTA Rules.

Comments

This decision clarifies that the 28 day period for challenging any GAFTA first tier tribunal award on jurisdiction under S67 AA is to be calculated from the date of that first tier award, regardless of any appeal made on any other issue to the GAFTA Board of Appeal.