In the Technology and Construction Court O’Farrell J recently considered an application to extend time for challenging an award as the Claimant missed the 28 day deadline for filing an application with the court. The arbitrator in an ad hoc arbitration seated in England notified the parties that the Award had been completed and that it would be released on payment of his fees. As often happens arguments ensued as to who was liable for what and the Claimant did not pay its share until 32 days later. The arbitrator immediately published his Award to the parties and the Claimant filed its application to challenge the Award and for leave to do so 84 days late. This raised very similar issues to the case of Rollitt v Ballard [2017] EWHC 1500, which we reported on last month when the Claimant delayed 88 days. In the present case the court also decided that the Claimant’s 84 day delay was not acceptable but for slightly different reasons refused to give permission to file the application late. Squibb Group v Pole 2 Pole Scaffolding [2017] EWHC 2394 (TCC)

Squibb Group v Pole 2 Pole Scaffolding [2017] EWHC 2394 (TCC)

Principles

The main issue to be determined by O’Farrell J, was whether extending the period for issuing the Claim Form was appropriate.

O’Farrell J referred to section 80(5) of the Arbitration Act 1996, which provides “where any provision of this Part requires an application or appeal to be made to the court within a specified time, the rules of court (…) apply in relation to that requirement.” The relevant rules of court are CPR 62.9 and CPR 3.1, which allow the court a discretion to extend time for making an application for permission to appeal, even after the 28 day period has expired.

O’Farrell J also referred to the principles applicable to the court’s discretion to extend time identified by Popplewell J inTerna v Al Shamsi [2012] EWHC 3283 (Comm), the primary factors being:

  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.

Discretion

Before considering these primary factors, O’Farrell J affirmed that the 28 days time limit in the Arbitration Act 1996 is a reflection of the principle of speedy finality that underlines the purpose of the Arbitration Act 1996. Any party requesting an extension of time should therefore show that the interests of justice require a departure from the timetable of the Arbitration Act 1996.

O’Farrell J was of the opinion that the Claimant had no reasonable explanation for the 84 day delay from 25 May 2017 until 17 August 2017, which counts as a substantial delay. A failure to pay the arbitrator’s fees, without any explanation, is not a reasonable excuse for delay in issuing a challenge. The Claimant should have taken appropriate steps to ensure that it preserved any right to challenge the Award.

Moreover, O’Farrell J considered it very significant in this particular case that any delay in receiving payment of the sum awarded and any additional expense incurred in enforcing the Award would place considerable financial strain on the Defendant, which company had a modest turnover in comparison to the Claimant. It would therefore have caused irredeemable harm to the Defendant.

Comment

This decision shows again that in order to challenge an arbitral award, it is of the utmost importance to comply with the statutory 28 day period which starts running from the date that the award is available and not the date it is received. The fact that a party had not seen the award because it had not paid the arbitrator’s fees is not an acceptable excuse.