In the case of STA -v- OFY, the court considered the relevant factors applicable to granting an extension of time to challenge an arbitration award.

Factual background

This was an application by a state government (STA) for an extension of time to bring a challenge under section 68 of the Arbitration Act 1996 (the Act) in respect of a final award (the Final Award).

The arbitration was between STA and the defendant (OFY). The dispute arose out of what OFY contended was the wrongful repudiation by STA of a contract, under which OFY was to provide a fast-track power generation solution (the Contract). OFY's case was that, because of STA's repudiation, it was entitled to receive an Early Termination Payment. By the Final Award the tribunal ordered STA to pay to OFY the full amount of the Early Termination Payment, namely US$134,348,661 plus interest and costs, and dismissed STA's counterclaim.

The Final Award was dated 26 January 2021. The 28-day period prescribed by s.70(3) of the Act would have expired on 22 February 2021.

On 19 February 2021, STA applied ex parte on paper for an extension of time until 19 April 2021 to bring a challenge. In that first extension application, STA’s then solicitors gave evidence that they had been instructed the previous day, were reviewing the documents and gave reasons for seeking an extension of 56 days, including that there had been delays in their instruction due to "the painstaking and bureaucratic decision-making process”, a change in government and that COVID-19 had contributed to the delay, in particular because key members of the Office of the Attorney General contracted COVID-19, which had contributed to the disruption to the Office and STA's civil service still relied heavily on paper documents.

The Court extended the time for STA to issue and serve any challenge to the Final Award under s.67/68 of the Arbitration Act 1996 to 8 March 2021, and ordered that any application for a further extension of time had to be issued and served by 5 March 2021.

No application was made for a further extension by 5 March 2021, and no challenge under s.67 or s.68 of the Act was issued by 8 March 2021.

On 1 April 2021 STA, by its new solicitors, issued a claim form, applying under s.68(2)(c) and s. 68(2)(d) of the Act to set aside the Final Award based on two particular points. STA also issued an application notice seeking an extension of time for the bringing of a challenge to the Final Award.

Legal analysis

It was common ground that STA’s application for an extension of time to challenge the Final Award was to be assessed by reference to the factors set out in Kalmneft -v- Glencore International AG [2002] 1 Lloyd's Rep 128 and considered further in Terna Bahrain -v- Bin Kamil [2012] EWHC 3283 (Comm).

Taking each Kalmneft factor in turn, the judge held as follows.

Length of delay

The issue of the application for a second extension was 38 days after the 28-day period stipulated by the Act, and 27 days after the expiration of the deadline imposed by the initial order. In circumstances where, (per Terna Bahrain) the length of delay was to be judged against the yardstick of the 28 days provided for in the Act, and, in the present case, also against the yardstick of the length of the initial extension granted there was no doubt that the delay was significant and substantial.

The judge rejected STA’s argument that the delay ought not to be regarded as significant in view of the length of the arbitration and the amount of money involved: the length of the arbitration process should not have any significant bearing on the time within which an application should be made after an award and by contrast, the fact that a large sum was at stake might exacerbate the seriousness and significance of a failure to act promptly.

Did the applicant act reasonably?

STA did not act reasonably. This was a case in which it was required to act promptly not only in accordance with the time period specified by the Act, but also in light of the initial order. STA had given no adequate explanation of the delay.

The change in government did not mean that STA was unable to act in the meantime. In any event, in the present context of applications in respect of arbitrations the fact that a party was a foreign state was a matter of little significance: a foreign state was a litigant like any other litigant and was expected to comply with the rules and provisions of the CPR.

Further, the evidence as to the way in which COVID-19 was said to have affected STA was wholly inadequate to place any significant weight on this point. The court was now well used to evaluating contentions as to the effect of the pandemic on litigants and litigation. What was required, and was regularly provided, was a detailed explanation of the way in which the pandemic had affected particular people or particular processes. Such evidence was lacking.

Did OFY or the tribunal contribute to the delay?

There was no suggestion in this case that OFY or the tribunal had caused or contributed to the delay.

Prejudice

There was no evidence of prejudice which would be suffered by OFY by reason of the delay, other than the prejudice entailed by delay in enforcing the Final Award, though that was itself a form of prejudice even if there could be an award of interest. It was, however, well established that the absence of prejudice to the respondent was not a necessary condition for the refusal of an extension.

Continuation of arbitration?

The Final Award disposed of all claims and counterclaims, and so the arbitration had not continued during the period of the delay.

The merits of the proposed challenge

The present was one of the relatively infrequently encountered cases in which the court could see that the grounds of the proposed challenge were intrinsically weak.

Two grounds had been advanced in the claim form. The first was the contention that the tribunal had failed to be "guided by the terms and conditions of the contract", and that this constituted a failure to conduct the proceedings in accordance with the procedure agreed between the parties. However, this was a clear case of an attempt to present alleged errors of law as errors of procedure, by means of the contention that the findings of the tribunal did not accord with the terms of the agreement.

STA's second complaint was that the tribunal had failed to deal with all the issues, which were put to it and specifically its argument that OFY was not entitled to claim mobilisation costs because STA had not allocated a site. However, it was clear that the tribunal had dealt with this issue at various paragraphs of the Final Award.

Unfairness

The final factor was whether, in the broadest sense, it would be unfair to STA to be denied the opportunity of having its application determined. The judge held that it would not. STA had already been given an extension of time in which to bring a challenge under s.68 or to request a further extension. STA was solely responsible for having failed to avail itself of the usual period or that extension. This followed on from delays to the arbitration itself for which, as it seemed, STA was solely responsible and the application sought appeared intrinsically weak.

For these reasons, and in particular because of the length and circumstances of the delay and the absence of an adequate explanation for it, the judge dismissed STA's application.

This case provides useful analysis on how the court will apply the Kalmneft factors when considering an application to extend time for challenging an arbitral award. Of particular interest are the judge’s comments that the length of the arbitration and the sums at stake are irrelevant when it comes to considering the length of delay in applying. Further, this judgment provides a reminder that in order to rely on any COVID-19 related disruption, the court will require detailed and specific evidence.

In the case of STA -v- OFY, the court considered the relevant factors applicable to granting an extension of time to challenge an arbitration award.

Factual background

This was an application by a state government (STA) for an extension of time to bring a challenge under section 68 of the Arbitration Act 1996 (the Act) in respect of a final award (the Final Award).

The arbitration was between STA and the defendant (OFY). The dispute arose out of what OFY contended was the wrongful repudiation by STA of a contract, under which OFY was to provide a fast-track power generation solution (the Contract). OFY's case was that, because of STA's repudiation, it was entitled to receive an Early Termination Payment. By the Final Award the tribunal ordered STA to pay to OFY the full amount of the Early Termination Payment, namely US$134,348,661 plus interest and costs, and dismissed STA's counterclaim.

The Final Award was dated 26 January 2021. The 28-day period prescribed by s.70(3) of the Act would have expired on 22 February 2021.

On 19 February 2021, STA applied ex parte on paper for an extension of time until 19 April 2021 to bring a challenge. In that first extension application, STA’s then solicitors gave evidence that they had been instructed the previous day, were reviewing the documents and gave reasons for seeking an extension of 56 days, including that there had been delays in their instruction due to "the painstaking and bureaucratic decision-making process”, a change in government and that COVID-19 had contributed to the delay, in particular because key members of the Office of the Attorney General contracted COVID-19, which had contributed to the disruption to the Office and STA's civil service still relied heavily on paper documents.

The Court extended the time for STA to issue and serve any challenge to the Final Award under s.67/68 of the Arbitration Act 1996 to 8 March 2021, and ordered that any application for a further extension of time had to be issued and served by 5 March 2021.

No application was made for a further extension by 5 March 2021, and no challenge under s.67 or s.68 of the Act was issued by 8 March 2021.

On 1 April 2021 STA, by its new solicitors, issued a claim form, applying under s.68(2)(c) and s. 68(2)(d) of the Act to set aside the Final Award based on two particular points. STA also issued an application notice seeking an extension of time for the bringing of a challenge to the Final Award.

Legal analysis

It was common ground that STA’s application for an extension of time to challenge the Final Award was to be assessed by reference to the factors set out in Kalmneft -v- Glencore International AG [2002] 1 Lloyd's Rep 128 and considered further in Terna Bahrain -v- Bin Kamil [2012] EWHC 3283 (Comm).

Taking each Kalmneft factor in turn, the judge held as follows.

Length of delay

The issue of the application for a second extension was 38 days after the 28-day period stipulated by the Act, and 27 days after the expiration of the deadline imposed by the initial order. In circumstances where, (per Terna Bahrain) the length of delay was to be judged against the yardstick of the 28 days provided for in the Act, and, in the present case, also against the yardstick of the length of the initial extension granted there was no doubt that the delay was significant and substantial.

The judge rejected STA’s argument that the delay ought not to be regarded as significant in view of the length of the arbitration and the amount of money involved: the length of the arbitration process should not have any significant bearing on the time within which an application should be made after an award and by contrast, the fact that a large sum was at stake might exacerbate the seriousness and significance of a failure to act promptly.

Did the applicant act reasonably?

STA did not act reasonably. This was a case in which it was required to act promptly not only in accordance with the time period specified by the Act, but also in light of the initial order. STA had given no adequate explanation of the delay.

The change in government did not mean that STA was unable to act in the meantime. In any event, in the present context of applications in respect of arbitrations the fact that a party was a foreign state was a matter of little significance: a foreign state was a litigant like any other litigant and was expected to comply with the rules and provisions of the CPR.

Further, the evidence as to the way in which COVID-19 was said to have affected STA was wholly inadequate to place any significant weight on this point. The court was now well used to evaluating contentions as to the effect of the pandemic on litigants and litigation. What was required, and was regularly provided, was a detailed explanation of the way in which the pandemic had affected particular people or particular processes. Such evidence was lacking.

Did OFY or the tribunal contribute to the delay?

There was no suggestion in this case that OFY or the tribunal had caused or contributed to the delay.

Prejudice

There was no evidence of prejudice which would be suffered by OFY by reason of the delay, other than the prejudice entailed by delay in enforcing the Final Award, though that was itself a form of prejudice even if there could be an award of interest. It was, however, well established that the absence of prejudice to the respondent was not a necessary condition for the refusal of an extension.

Continuation of arbitration?

The Final Award disposed of all claims and counterclaims, and so the arbitration had not continued during the period of the delay.

The merits of the proposed challenge

The present was one of the relatively infrequently encountered cases in which the court could see that the grounds of the proposed challenge were intrinsically weak.

Two grounds had been advanced in the claim form. The first was the contention that the tribunal had failed to be "guided by the terms and conditions of the contract", and that this constituted a failure to conduct the proceedings in accordance with the procedure agreed between the parties. However, this was a clear case of an attempt to present alleged errors of law as errors of procedure, by means of the contention that the findings of the tribunal did not accord with the terms of the agreement.

STA's second complaint was that the tribunal had failed to deal with all the issues, which were put to it and specifically its argument that OFY was not entitled to claim mobilisation costs because STA had not allocated a site. However, it was clear that the tribunal had dealt with this issue at various paragraphs of the Final Award.

Unfairness

The final factor was whether, in the broadest sense, it would be unfair to STA to be denied the opportunity of having its application determined. The judge held that it would not. STA had already been given an extension of time in which to bring a challenge under s.68 or to request a further extension. STA was solely responsible for having failed to avail itself of the usual period or that extension. This followed on from delays to the arbitration itself for which, as it seemed, STA was solely responsible and the application sought appeared intrinsically weak.

For these reasons, and in particular because of the length and circumstances of the delay and the absence of an adequate explanation for it, the judge dismissed STA's application.

This case provides useful analysis on how the court will apply the Kalmneft factors when considering an application to extend time for challenging an arbitral award. Of particular interest are the judge’s comments that the length of the arbitration and the sums at stake are irrelevant when it comes to considering the length of delay in applying. Further, this judgment provides a reminder that in order to rely on any COVID-19 related disruption, the court will require detailed and specific evidence.

In the case of STA -v- OFY, the court considered the relevant factors applicable to granting an extension of time to challenge an arbitration award.

Factual background

This was an application by a state government (STA) for an extension of time to bring a challenge under section 68 of the Arbitration Act 1996 (the Act) in respect of a final award (the Final Award).

The arbitration was between STA and the defendant (OFY). The dispute arose out of what OFY contended was the wrongful repudiation by STA of a contract, under which OFY was to provide a fast-track power generation solution (the Contract). OFY's case was that, because of STA's repudiation, it was entitled to receive an Early Termination Payment. By the Final Award the tribunal ordered STA to pay to OFY the full amount of the Early Termination Payment, namely US$134,348,661 plus interest and costs, and dismissed STA's counterclaim.

The Final Award was dated 26 January 2021. The 28-day period prescribed by s.70(3) of the Act would have expired on 22 February 2021.

On 19 February 2021, STA applied ex parte on paper for an extension of time until 19 April 2021 to bring a challenge. In that first extension application, STA’s then solicitors gave evidence that they had been instructed the previous day, were reviewing the documents and gave reasons for seeking an extension of 56 days, including that there had been delays in their instruction due to "the painstaking and bureaucratic decision-making process”, a change in government and that COVID-19 had contributed to the delay, in particular because key members of the Office of the Attorney General contracted COVID-19, which had contributed to the disruption to the Office and STA's civil service still relied heavily on paper documents.

The Court extended the time for STA to issue and serve any challenge to the Final Award under s.67/68 of the Arbitration Act 1996 to 8 March 2021, and ordered that any application for a further extension of time had to be issued and served by 5 March 2021.

No application was made for a further extension by 5 March 2021, and no challenge under s.67 or s.68 of the Act was issued by 8 March 2021.

On 1 April 2021 STA, by its new solicitors, issued a claim form, applying under s.68(2)(c) and s. 68(2)(d) of the Act to set aside the Final Award based on two particular points. STA also issued an application notice seeking an extension of time for the bringing of a challenge to the Final Award.

Legal analysis

It was common ground that STA’s application for an extension of time to challenge the Final Award was to be assessed by reference to the factors set out in Kalmneft -v- Glencore International AG [2002] 1 Lloyd's Rep 128 and considered further in Terna Bahrain -v- Bin Kamil [2012] EWHC 3283 (Comm).

Taking each Kalmneft factor in turn, the judge held as follows.

Length of delay

The issue of the application for a second extension was 38 days after the 28-day period stipulated by the Act, and 27 days after the expiration of the deadline imposed by the initial order. In circumstances where, (per Terna Bahrain) the length of delay was to be judged against the yardstick of the 28 days provided for in the Act, and, in the present case, also against the yardstick of the length of the initial extension granted there was no doubt that the delay was significant and substantial.

The judge rejected STA’s argument that the delay ought not to be regarded as significant in view of the length of the arbitration and the amount of money involved: the length of the arbitration process should not have any significant bearing on the time within which an application should be made after an award and by contrast, the fact that a large sum was at stake might exacerbate the seriousness and significance of a failure to act promptly.

Did the applicant act reasonably?

STA did not act reasonably. This was a case in which it was required to act promptly not only in accordance with the time period specified by the Act, but also in light of the initial order. STA had given no adequate explanation of the delay.

The change in government did not mean that STA was unable to act in the meantime. In any event, in the present context of applications in respect of arbitrations the fact that a party was a foreign state was a matter of little significance: a foreign state was a litigant like any other litigant and was expected to comply with the rules and provisions of the CPR.

Further, the evidence as to the way in which COVID-19 was said to have affected STA was wholly inadequate to place any significant weight on this point. The court was now well used to evaluating contentions as to the effect of the pandemic on litigants and litigation. What was required, and was regularly provided, was a detailed explanation of the way in which the pandemic had affected particular people or particular processes. Such evidence was lacking.

Did OFY or the tribunal contribute to the delay?

There was no suggestion in this case that OFY or the tribunal had caused or contributed to the delay.

Prejudice

There was no evidence of prejudice which would be suffered by OFY by reason of the delay, other than the prejudice entailed by delay in enforcing the Final Award, though that was itself a form of prejudice even if there could be an award of interest. It was, however, well established that the absence of prejudice to the respondent was not a necessary condition for the refusal of an extension.

Continuation of arbitration?

The Final Award disposed of all claims and counterclaims, and so the arbitration had not continued during the period of the delay.

The merits of the proposed challenge

The present was one of the relatively infrequently encountered cases in which the court could see that the grounds of the proposed challenge were intrinsically weak.

Two grounds had been advanced in the claim form. The first was the contention that the tribunal had failed to be "guided by the terms and conditions of the contract", and that this constituted a failure to conduct the proceedings in accordance with the procedure agreed between the parties. However, this was a clear case of an attempt to present alleged errors of law as errors of procedure, by means of the contention that the findings of the tribunal did not accord with the terms of the agreement.

STA's second complaint was that the tribunal had failed to deal with all the issues, which were put to it and specifically its argument that OFY was not entitled to claim mobilisation costs because STA had not allocated a site. However, it was clear that the tribunal had dealt with this issue at various paragraphs of the Final Award.

Unfairness

The final factor was whether, in the broadest sense, it would be unfair to STA to be denied the opportunity of having its application determined. The judge held that it would not. STA had already been given an extension of time in which to bring a challenge under s.68 or to request a further extension. STA was solely responsible for having failed to avail itself of the usual period or that extension. This followed on from delays to the arbitration itself for which, as it seemed, STA was solely responsible and the application sought appeared intrinsically weak.

For these reasons, and in particular because of the length and circumstances of the delay and the absence of an adequate explanation for it, the judge dismissed STA's application.

This case provides useful analysis on how the court will apply the Kalmneft factors when considering an application to extend time for challenging an arbitral award. Of particular interest are the judge’s comments that the length of the arbitration and the sums at stake are irrelevant when it comes to considering the length of delay in applying. Further, this judgment provides a reminder that in order to rely on any COVID-19 related disruption, the court will require detailed and specific evidence.

In the case of STA -v- OFY, the court considered the relevant factors applicable to granting an extension of time to challenge an arbitration award.

Factual background

This was an application by a state government (STA) for an extension of time to bring a challenge under section 68 of the Arbitration Act 1996 (the Act) in respect of a final award (the Final Award).

The arbitration was between STA and the defendant (OFY). The dispute arose out of what OFY contended was the wrongful repudiation by STA of a contract, under which OFY was to provide a fast-track power generation solution (the Contract). OFY's case was that, because of STA's repudiation, it was entitled to receive an Early Termination Payment. By the Final Award the tribunal ordered STA to pay to OFY the full amount of the Early Termination Payment, namely US$134,348,661 plus interest and costs, and dismissed STA's counterclaim.

The Final Award was dated 26 January 2021. The 28-day period prescribed by s.70(3) of the Act would have expired on 22 February 2021.

On 19 February 2021, STA applied ex parte on paper for an extension of time until 19 April 2021 to bring a challenge. In that first extension application, STA’s then solicitors gave evidence that they had been instructed the previous day, were reviewing the documents and gave reasons for seeking an extension of 56 days, including that there had been delays in their instruction due to "the painstaking and bureaucratic decision-making process”, a change in government and that COVID-19 had contributed to the delay, in particular because key members of the Office of the Attorney General contracted COVID-19, which had contributed to the disruption to the Office and STA's civil service still relied heavily on paper documents.

The Court extended the time for STA to issue and serve any challenge to the Final Award under s.67/68 of the Arbitration Act 1996 to 8 March 2021, and ordered that any application for a further extension of time had to be issued and served by 5 March 2021.

No application was made for a further extension by 5 March 2021, and no challenge under s.67 or s.68 of the Act was issued by 8 March 2021.

On 1 April 2021 STA, by its new solicitors, issued a claim form, applying under s.68(2)(c) and s. 68(2)(d) of the Act to set aside the Final Award based on two particular points. STA also issued an application notice seeking an extension of time for the bringing of a challenge to the Final Award.

Legal analysis

It was common ground that STA’s application for an extension of time to challenge the Final Award was to be assessed by reference to the factors set out in Kalmneft -v- Glencore International AG [2002] 1 Lloyd's Rep 128 and considered further in Terna Bahrain -v- Bin Kamil [2012] EWHC 3283 (Comm).

Taking each Kalmneft factor in turn, the judge held as follows.

Length of delay

The issue of the application for a second extension was 38 days after the 28-day period stipulated by the Act, and 27 days after the expiration of the deadline imposed by the initial order. In circumstances where, (per Terna Bahrain) the length of delay was to be judged against the yardstick of the 28 days provided for in the Act, and, in the present case, also against the yardstick of the length of the initial extension granted there was no doubt that the delay was significant and substantial.

The judge rejected STA’s argument that the delay ought not to be regarded as significant in view of the length of the arbitration and the amount of money involved: the length of the arbitration process should not have any significant bearing on the time within which an application should be made after an award and by contrast, the fact that a large sum was at stake might exacerbate the seriousness and significance of a failure to act promptly.

Did the applicant act reasonably?

STA did not act reasonably. This was a case in which it was required to act promptly not only in accordance with the time period specified by the Act, but also in light of the initial order. STA had given no adequate explanation of the delay.

The change in government did not mean that STA was unable to act in the meantime. In any event, in the present context of applications in respect of arbitrations the fact that a party was a foreign state was a matter of little significance: a foreign state was a litigant like any other litigant and was expected to comply with the rules and provisions of the CPR.

Further, the evidence as to the way in which COVID-19 was said to have affected STA was wholly inadequate to place any significant weight on this point. The court was now well used to evaluating contentions as to the effect of the pandemic on litigants and litigation. What was required, and was regularly provided, was a detailed explanation of the way in which the pandemic had affected particular people or particular processes. Such evidence was lacking.

Did OFY or the tribunal contribute to the delay?

There was no suggestion in this case that OFY or the tribunal had caused or contributed to the delay.

Prejudice

There was no evidence of prejudice which would be suffered by OFY by reason of the delay, other than the prejudice entailed by delay in enforcing the Final Award, though that was itself a form of prejudice even if there could be an award of interest. It was, however, well established that the absence of prejudice to the respondent was not a necessary condition for the refusal of an extension.

Continuation of arbitration?

The Final Award disposed of all claims and counterclaims, and so the arbitration had not continued during the period of the delay.

The merits of the proposed challenge

The present was one of the relatively infrequently encountered cases in which the court could see that the grounds of the proposed challenge were intrinsically weak.

Two grounds had been advanced in the claim form. The first was the contention that the tribunal had failed to be "guided by the terms and conditions of the contract", and that this constituted a failure to conduct the proceedings in accordance with the procedure agreed between the parties. However, this was a clear case of an attempt to present alleged errors of law as errors of procedure, by means of the contention that the findings of the tribunal did not accord with the terms of the agreement.

STA's second complaint was that the tribunal had failed to deal with all the issues, which were put to it and specifically its argument that OFY was not entitled to claim mobilisation costs because STA had not allocated a site. However, it was clear that the tribunal had dealt with this issue at various paragraphs of the Final Award.

Unfairness

The final factor was whether, in the broadest sense, it would be unfair to STA to be denied the opportunity of having its application determined. The judge held that it would not. STA had already been given an extension of time in which to bring a challenge under s.68 or to request a further extension. STA was solely responsible for having failed to avail itself of the usual period or that extension. This followed on from delays to the arbitration itself for which, as it seemed, STA was solely responsible and the application sought appeared intrinsically weak.

For these reasons, and in particular because of the length and circumstances of the delay and the absence of an adequate explanation for it, the judge dismissed STA's application.

This case provides useful analysis on how the court will apply the Kalmneft factors when considering an application to extend time for challenging an arbitral award. Of particular interest are the judge’s comments that the length of the arbitration and the sums at stake are irrelevant when it comes to considering the length of delay in applying. Further, this judgment provides a reminder that in order to rely on any COVID-19 related disruption, the court will require detailed and specific evidence.

In the case of STA -v- OFY, the court considered the relevant factors applicable to granting an extension of time to challenge an arbitration award.

Factual background

This was an application by a state government (STA) for an extension of time to bring a challenge under section 68 of the Arbitration Act 1996 (the Act) in respect of a final award (the Final Award).

The arbitration was between STA and the defendant (OFY). The dispute arose out of what OFY contended was the wrongful repudiation by STA of a contract, under which OFY was to provide a fast-track power generation solution (the Contract). OFY's case was that, because of STA's repudiation, it was entitled to receive an Early Termination Payment. By the Final Award the tribunal ordered STA to pay to OFY the full amount of the Early Termination Payment, namely US$134,348,661 plus interest and costs, and dismissed STA's counterclaim.

The Final Award was dated 26 January 2021. The 28-day period prescribed by s.70(3) of the Act would have expired on 22 February 2021.

On 19 February 2021, STA applied ex parte on paper for an extension of time until 19 April 2021 to bring a challenge. In that first extension application, STA’s then solicitors gave evidence that they had been instructed the previous day, were reviewing the documents and gave reasons for seeking an extension of 56 days, including that there had been delays in their instruction due to "the painstaking and bureaucratic decision-making process”, a change in government and that COVID-19 had contributed to the delay, in particular because key members of the Office of the Attorney General contracted COVID-19, which had contributed to the disruption to the Office and STA's civil service still relied heavily on paper documents.

The Court extended the time for STA to issue and serve any challenge to the Final Award under s.67/68 of the Arbitration Act 1996 to 8 March 2021, and ordered that any application for a further extension of time had to be issued and served by 5 March 2021.

No application was made for a further extension by 5 March 2021, and no challenge under s.67 or s.68 of the Act was issued by 8 March 2021.

On 1 April 2021 STA, by its new solicitors, issued a claim form, applying under s.68(2)(c) and s. 68(2)(d) of the Act to set aside the Final Award based on two particular points. STA also issued an application notice seeking an extension of time for the bringing of a challenge to the Final Award.

Legal analysis

It was common ground that STA’s application for an extension of time to challenge the Final Award was to be assessed by reference to the factors set out in Kalmneft -v- Glencore International AG [2002] 1 Lloyd's Rep 128 and considered further in Terna Bahrain -v- Bin Kamil [2012] EWHC 3283 (Comm).

Taking each Kalmneft factor in turn, the judge held as follows.

Length of delay

The issue of the application for a second extension was 38 days after the 28-day period stipulated by the Act, and 27 days after the expiration of the deadline imposed by the initial order. In circumstances where, (per Terna Bahrain) the length of delay was to be judged against the yardstick of the 28 days provided for in the Act, and, in the present case, also against the yardstick of the length of the initial extension granted there was no doubt that the delay was significant and substantial.

The judge rejected STA’s argument that the delay ought not to be regarded as significant in view of the length of the arbitration and the amount of money involved: the length of the arbitration process should not have any significant bearing on the time within which an application should be made after an award and by contrast, the fact that a large sum was at stake might exacerbate the seriousness and significance of a failure to act promptly.

Did the applicant act reasonably?

STA did not act reasonably. This was a case in which it was required to act promptly not only in accordance with the time period specified by the Act, but also in light of the initial order. STA had given no adequate explanation of the delay.

The change in government did not mean that STA was unable to act in the meantime. In any event, in the present context of applications in respect of arbitrations the fact that a party was a foreign state was a matter of little significance: a foreign state was a litigant like any other litigant and was expected to comply with the rules and provisions of the CPR.

Further, the evidence as to the way in which COVID-19 was said to have affected STA was wholly inadequate to place any significant weight on this point. The court was now well used to evaluating contentions as to the effect of the pandemic on litigants and litigation. What was required, and was regularly provided, was a detailed explanation of the way in which the pandemic had affected particular people or particular processes. Such evidence was lacking.

Did OFY or the tribunal contribute to the delay?

There was no suggestion in this case that OFY or the tribunal had caused or contributed to the delay.

Prejudice

There was no evidence of prejudice which would be suffered by OFY by reason of the delay, other than the prejudice entailed by delay in enforcing the Final Award, though that was itself a form of prejudice even if there could be an award of interest. It was, however, well established that the absence of prejudice to the respondent was not a necessary condition for the refusal of an extension.

Continuation of arbitration?

The Final Award disposed of all claims and counterclaims, and so the arbitration had not continued during the period of the delay.

The merits of the proposed challenge

The present was one of the relatively infrequently encountered cases in which the court could see that the grounds of the proposed challenge were intrinsically weak.

Two grounds had been advanced in the claim form. The first was the contention that the tribunal had failed to be "guided by the terms and conditions of the contract", and that this constituted a failure to conduct the proceedings in accordance with the procedure agreed between the parties. However, this was a clear case of an attempt to present alleged errors of law as errors of procedure, by means of the contention that the findings of the tribunal did not accord with the terms of the agreement.

STA's second complaint was that the tribunal had failed to deal with all the issues, which were put to it and specifically its argument that OFY was not entitled to claim mobilisation costs because STA had not allocated a site. However, it was clear that the tribunal had dealt with this issue at various paragraphs of the Final Award.

Unfairness

The final factor was whether, in the broadest sense, it would be unfair to STA to be denied the opportunity of having its application determined. The judge held that it would not. STA had already been given an extension of time in which to bring a challenge under s.68 or to request a further extension. STA was solely responsible for having failed to avail itself of the usual period or that extension. This followed on from delays to the arbitration itself for which, as it seemed, STA was solely responsible and the application sought appeared intrinsically weak.

For these reasons, and in particular because of the length and circumstances of the delay and the absence of an adequate explanation for it, the judge dismissed STA's application.

This case provides useful analysis on how the court will apply the Kalmneft factors when considering an application to extend time for challenging an arbitral award. Of particular interest are the judge’s comments that the length of the arbitration and the sums at stake are irrelevant when it comes to considering the length of delay in applying. Further, this judgment provides a reminder that in order to rely on any COVID-19 related disruption, the court will require detailed and specific evidence.

In the case of STA -v- OFY, the court considered the relevant factors applicable to granting an extension of time to challenge an arbitration award.

Factual background

This was an application by a state government (STA) for an extension of time to bring a challenge under section 68 of the Arbitration Act 1996 (the Act) in respect of a final award (the Final Award).

The arbitration was between STA and the defendant (OFY). The dispute arose out of what OFY contended was the wrongful repudiation by STA of a contract, under which OFY was to provide a fast-track power generation solution (the Contract). OFY's case was that, because of STA's repudiation, it was entitled to receive an Early Termination Payment. By the Final Award the tribunal ordered STA to pay to OFY the full amount of the Early Termination Payment, namely US$134,348,661 plus interest and costs, and dismissed STA's counterclaim.

The Final Award was dated 26 January 2021. The 28-day period prescribed by s.70(3) of the Act would have expired on 22 February 2021.

On 19 February 2021, STA applied ex parte on paper for an extension of time until 19 April 2021 to bring a challenge. In that first extension application, STA’s then solicitors gave evidence that they had been instructed the previous day, were reviewing the documents and gave reasons for seeking an extension of 56 days, including that there had been delays in their instruction due to "the painstaking and bureaucratic decision-making process”, a change in government and that COVID-19 had contributed to the delay, in particular because key members of the Office of the Attorney General contracted COVID-19, which had contributed to the disruption to the Office and STA's civil service still relied heavily on paper documents.

The Court extended the time for STA to issue and serve any challenge to the Final Award under s.67/68 of the Arbitration Act 1996 to 8 March 2021, and ordered that any application for a further extension of time had to be issued and served by 5 March 2021.

No application was made for a further extension by 5 March 2021, and no challenge under s.67 or s.68 of the Act was issued by 8 March 2021.

On 1 April 2021 STA, by its new solicitors, issued a claim form, applying under s.68(2)(c) and s. 68(2)(d) of the Act to set aside the Final Award based on two particular points. STA also issued an application notice seeking an extension of time for the bringing of a challenge to the Final Award.

Legal analysis

It was common ground that STA’s application for an extension of time to challenge the Final Award was to be assessed by reference to the factors set out in Kalmneft -v- Glencore International AG [2002] 1 Lloyd's Rep 128 and considered further in Terna Bahrain -v- Bin Kamil [2012] EWHC 3283 (Comm).

Taking each Kalmneft factor in turn, the judge held as follows.

Length of delay

The issue of the application for a second extension was 38 days after the 28-day period stipulated by the Act, and 27 days after the expiration of the deadline imposed by the initial order. In circumstances where, (per Terna Bahrain) the length of delay was to be judged against the yardstick of the 28 days provided for in the Act, and, in the present case, also against the yardstick of the length of the initial extension granted there was no doubt that the delay was significant and substantial.

The judge rejected STA’s argument that the delay ought not to be regarded as significant in view of the length of the arbitration and the amount of money involved: the length of the arbitration process should not have any significant bearing on the time within which an application should be made after an award and by contrast, the fact that a large sum was at stake might exacerbate the seriousness and significance of a failure to act promptly.

Did the applicant act reasonably?

STA did not act reasonably. This was a case in which it was required to act promptly not only in accordance with the time period specified by the Act, but also in light of the initial order. STA had given no adequate explanation of the delay.

The change in government did not mean that STA was unable to act in the meantime. In any event, in the present context of applications in respect of arbitrations the fact that a party was a foreign state was a matter of little significance: a foreign state was a litigant like any other litigant and was expected to comply with the rules and provisions of the CPR.

Further, the evidence as to the way in which COVID-19 was said to have affected STA was wholly inadequate to place any significant weight on this point. The court was now well used to evaluating contentions as to the effect of the pandemic on litigants and litigation. What was required, and was regularly provided, was a detailed explanation of the way in which the pandemic had affected particular people or particular processes. Such evidence was lacking.

Did OFY or the tribunal contribute to the delay?

There was no suggestion in this case that OFY or the tribunal had caused or contributed to the delay.

Prejudice

There was no evidence of prejudice which would be suffered by OFY by reason of the delay, other than the prejudice entailed by delay in enforcing the Final Award, though that was itself a form of prejudice even if there could be an award of interest. It was, however, well established that the absence of prejudice to the respondent was not a necessary condition for the refusal of an extension.

Continuation of arbitration?

The Final Award disposed of all claims and counterclaims, and so the arbitration had not continued during the period of the delay.

The merits of the proposed challenge

The present was one of the relatively infrequently encountered cases in which the court could see that the grounds of the proposed challenge were intrinsically weak.

Two grounds had been advanced in the claim form. The first was the contention that the tribunal had failed to be "guided by the terms and conditions of the contract", and that this constituted a failure to conduct the proceedings in accordance with the procedure agreed between the parties. However, this was a clear case of an attempt to present alleged errors of law as errors of procedure, by means of the contention that the findings of the tribunal did not accord with the terms of the agreement.

STA's second complaint was that the tribunal had failed to deal with all the issues, which were put to it and specifically its argument that OFY was not entitled to claim mobilisation costs because STA had not allocated a site. However, it was clear that the tribunal had dealt with this issue at various paragraphs of the Final Award.

Unfairness

The final factor was whether, in the broadest sense, it would be unfair to STA to be denied the opportunity of having its application determined. The judge held that it would not. STA had already been given an extension of time in which to bring a challenge under s.68 or to request a further extension. STA was solely responsible for having failed to avail itself of the usual period or that extension. This followed on from delays to the arbitration itself for which, as it seemed, STA was solely responsible and the application sought appeared intrinsically weak.

For these reasons, and in particular because of the length and circumstances of the delay and the absence of an adequate explanation for it, the judge dismissed STA's application.

This case provides useful analysis on how the court will apply the Kalmneft factors when considering an application to extend time for challenging an arbitral award. Of particular interest are the judge’s comments that the length of the arbitration and the sums at stake are irrelevant when it comes to considering the length of delay in applying. Further, this judgment provides a reminder that in order to rely on any COVID-19 related disruption, the court will require detailed and specific evidence.

In the case of STA -v- OFY, the court considered the relevant factors applicable to granting an extension of time to challenge an arbitration award.

Factual background

This was an application by a state government (STA) for an extension of time to bring a challenge under section 68 of the Arbitration Act 1996 (the Act) in respect of a final award (the Final Award).

The arbitration was between STA and the defendant (OFY). The dispute arose out of what OFY contended was the wrongful repudiation by STA of a contract, under which OFY was to provide a fast-track power generation solution (the Contract). OFY's case was that, because of STA's repudiation, it was entitled to receive an Early Termination Payment. By the Final Award the tribunal ordered STA to pay to OFY the full amount of the Early Termination Payment, namely US$134,348,661 plus interest and costs, and dismissed STA's counterclaim.

The Final Award was dated 26 January 2021. The 28-day period prescribed by s.70(3) of the Act would have expired on 22 February 2021.

On 19 February 2021, STA applied ex parte on paper for an extension of time until 19 April 2021 to bring a challenge. In that first extension application, STA’s then solicitors gave evidence that they had been instructed the previous day, were reviewing the documents and gave reasons for seeking an extension of 56 days, including that there had been delays in their instruction due to "the painstaking and bureaucratic decision-making process”, a change in government and that COVID-19 had contributed to the delay, in particular because key members of the Office of the Attorney General contracted COVID-19, which had contributed to the disruption to the Office and STA's civil service still relied heavily on paper documents.

The Court extended the time for STA to issue and serve any challenge to the Final Award under s.67/68 of the Arbitration Act 1996 to 8 March 2021, and ordered that any application for a further extension of time had to be issued and served by 5 March 2021.

No application was made for a further extension by 5 March 2021, and no challenge under s.67 or s.68 of the Act was issued by 8 March 2021.

On 1 April 2021 STA, by its new solicitors, issued a claim form, applying under s.68(2)(c) and s. 68(2)(d) of the Act to set aside the Final Award based on two particular points. STA also issued an application notice seeking an extension of time for the bringing of a challenge to the Final Award.

Legal analysis

It was common ground that STA’s application for an extension of time to challenge the Final Award was to be assessed by reference to the factors set out in Kalmneft -v- Glencore International AG [2002] 1 Lloyd's Rep 128 and considered further in Terna Bahrain -v- Bin Kamil [2012] EWHC 3283 (Comm).

Taking each Kalmneft factor in turn, the judge held as follows.

Length of delay

The issue of the application for a second extension was 38 days after the 28-day period stipulated by the Act, and 27 days after the expiration of the deadline imposed by the initial order. In circumstances where, (per Terna Bahrain) the length of delay was to be judged against the yardstick of the 28 days provided for in the Act, and, in the present case, also against the yardstick of the length of the initial extension granted there was no doubt that the delay was significant and substantial.

The judge rejected STA’s argument that the delay ought not to be regarded as significant in view of the length of the arbitration and the amount of money involved: the length of the arbitration process should not have any significant bearing on the time within which an application should be made after an award and by contrast, the fact that a large sum was at stake might exacerbate the seriousness and significance of a failure to act promptly.

Did the applicant act reasonably?

STA did not act reasonably. This was a case in which it was required to act promptly not only in accordance with the time period specified by the Act, but also in light of the initial order. STA had given no adequate explanation of the delay.

The change in government did not mean that STA was unable to act in the meantime. In any event, in the present context of applications in respect of arbitrations the fact that a party was a foreign state was a matter of little significance: a foreign state was a litigant like any other litigant and was expected to comply with the rules and provisions of the CPR.

Further, the evidence as to the way in which COVID-19 was said to have affected STA was wholly inadequate to place any significant weight on this point. The court was now well used to evaluating contentions as to the effect of the pandemic on litigants and litigation. What was required, and was regularly provided, was a detailed explanation of the way in which the pandemic had affected particular people or particular processes. Such evidence was lacking.

Did OFY or the tribunal contribute to the delay?

There was no suggestion in this case that OFY or the tribunal had caused or contributed to the delay.

Prejudice

There was no evidence of prejudice which would be suffered by OFY by reason of the delay, other than the prejudice entailed by delay in enforcing the Final Award, though that was itself a form of prejudice even if there could be an award of interest. It was, however, well established that the absence of prejudice to the respondent was not a necessary condition for the refusal of an extension.

Continuation of arbitration?

The Final Award disposed of all claims and counterclaims, and so the arbitration had not continued during the period of the delay.

The merits of the proposed challenge

The present was one of the relatively infrequently encountered cases in which the court could see that the grounds of the proposed challenge were intrinsically weak.

Two grounds had been advanced in the claim form. The first was the contention that the tribunal had failed to be "guided by the terms and conditions of the contract", and that this constituted a failure to conduct the proceedings in accordance with the procedure agreed between the parties. However, this was a clear case of an attempt to present alleged errors of law as errors of procedure, by means of the contention that the findings of the tribunal did not accord with the terms of the agreement.

STA's second complaint was that the tribunal had failed to deal with all the issues, which were put to it and specifically its argument that OFY was not entitled to claim mobilisation costs because STA had not allocated a site. However, it was clear that the tribunal had dealt with this issue at various paragraphs of the Final Award.

Unfairness

The final factor was whether, in the broadest sense, it would be unfair to STA to be denied the opportunity of having its application determined. The judge held that it would not. STA had already been given an extension of time in which to bring a challenge under s.68 or to request a further extension. STA was solely responsible for having failed to avail itself of the usual period or that extension. This followed on from delays to the arbitration itself for which, as it seemed, STA was solely responsible and the application sought appeared intrinsically weak.

For these reasons, and in particular because of the length and circumstances of the delay and the absence of an adequate explanation for it, the judge dismissed STA's application.

This case provides useful analysis on how the court will apply the Kalmneft factors when considering an application to extend time for challenging an arbitral award. Of particular interest are the judge’s comments that the length of the arbitration and the sums at stake are irrelevant when it comes to considering the length of delay in applying. Further, this judgment provides a reminder that in order to rely on any COVID-19 related disruption, the court will require detailed and specific evidence.

In the case of STA -v- OFY, the court considered the relevant factors applicable to granting an extension of time to challenge an arbitration award.

Factual background

This was an application by a state government (STA) for an extension of time to bring a challenge under section 68 of the Arbitration Act 1996 (the Act) in respect of a final award (the Final Award).

The arbitration was between STA and the defendant (OFY). The dispute arose out of what OFY contended was the wrongful repudiation by STA of a contract, under which OFY was to provide a fast-track power generation solution (the Contract). OFY's case was that, because of STA's repudiation, it was entitled to receive an Early Termination Payment. By the Final Award the tribunal ordered STA to pay to OFY the full amount of the Early Termination Payment, namely US$134,348,661 plus interest and costs, and dismissed STA's counterclaim.

The Final Award was dated 26 January 2021. The 28-day period prescribed by s.70(3) of the Act would have expired on 22 February 2021.

On 19 February 2021, STA applied ex parte on paper for an extension of time until 19 April 2021 to bring a challenge. In that first extension application, STA’s then solicitors gave evidence that they had been instructed the previous day, were reviewing the documents and gave reasons for seeking an extension of 56 days, including that there had been delays in their instruction due to "the painstaking and bureaucratic decision-making process”, a change in government and that COVID-19 had contributed to the delay, in particular because key members of the Office of the Attorney General contracted COVID-19, which had contributed to the disruption to the Office and STA's civil service still relied heavily on paper documents.

The Court extended the time for STA to issue and serve any challenge to the Final Award under s.67/68 of the Arbitration Act 1996 to 8 March 2021, and ordered that any application for a further extension of time had to be issued and served by 5 March 2021.

No application was made for a further extension by 5 March 2021, and no challenge under s.67 or s.68 of the Act was issued by 8 March 2021.

On 1 April 2021 STA, by its new solicitors, issued a claim form, applying under s.68(2)(c) and s. 68(2)(d) of the Act to set aside the Final Award based on two particular points. STA also issued an application notice seeking an extension of time for the bringing of a challenge to the Final Award.

Legal analysis

It was common ground that STA’s application for an extension of time to challenge the Final Award was to be assessed by reference to the factors set out in Kalmneft -v- Glencore International AG [2002] 1 Lloyd's Rep 128 and considered further in Terna Bahrain -v- Bin Kamil [2012] EWHC 3283 (Comm).

Taking each Kalmneft factor in turn, the judge held as follows.

Length of delay

The issue of the application for a second extension was 38 days after the 28-day period stipulated by the Act, and 27 days after the expiration of the deadline imposed by the initial order. In circumstances where, (per Terna Bahrain) the length of delay was to be judged against the yardstick of the 28 days provided for in the Act, and, in the present case, also against the yardstick of the length of the initial extension granted there was no doubt that the delay was significant and substantial.

The judge rejected STA’s argument that the delay ought not to be regarded as significant in view of the length of the arbitration and the amount of money involved: the length of the arbitration process should not have any significant bearing on the time within which an application should be made after an award and by contrast, the fact that a large sum was at stake might exacerbate the seriousness and significance of a failure to act promptly.

Did the applicant act reasonably?

STA did not act reasonably. This was a case in which it was required to act promptly not only in accordance with the time period specified by the Act, but also in light of the initial order. STA had given no adequate explanation of the delay.

The change in government did not mean that STA was unable to act in the meantime. In any event, in the present context of applications in respect of arbitrations the fact that a party was a foreign state was a matter of little significance: a foreign state was a litigant like any other litigant and was expected to comply with the rules and provisions of the CPR.

Further, the evidence as to the way in which COVID-19 was said to have affected STA was wholly inadequate to place any significant weight on this point. The court was now well used to evaluating contentions as to the effect of the pandemic on litigants and litigation. What was required, and was regularly provided, was a detailed explanation of the way in which the pandemic had affected particular people or particular processes. Such evidence was lacking.

Did OFY or the tribunal contribute to the delay?

There was no suggestion in this case that OFY or the tribunal had caused or contributed to the delay.

Prejudice

There was no evidence of prejudice which would be suffered by OFY by reason of the delay, other than the prejudice entailed by delay in enforcing the Final Award, though that was itself a form of prejudice even if there could be an award of interest. It was, however, well established that the absence of prejudice to the respondent was not a necessary condition for the refusal of an extension.

Continuation of arbitration?

The Final Award disposed of all claims and counterclaims, and so the arbitration had not continued during the period of the delay.

The merits of the proposed challenge

The present was one of the relatively infrequently encountered cases in which the court could see that the grounds of the proposed challenge were intrinsically weak.

Two grounds had been advanced in the claim form. The first was the contention that the tribunal had failed to be "guided by the terms and conditions of the contract", and that this constituted a failure to conduct the proceedings in accordance with the procedure agreed between the parties. However, this was a clear case of an attempt to present alleged errors of law as errors of procedure, by means of the contention that the findings of the tribunal did not accord with the terms of the agreement.

STA's second complaint was that the tribunal had failed to deal with all the issues, which were put to it and specifically its argument that OFY was not entitled to claim mobilisation costs because STA had not allocated a site. However, it was clear that the tribunal had dealt with this issue at various paragraphs of the Final Award.

Unfairness

The final factor was whether, in the broadest sense, it would be unfair to STA to be denied the opportunity of having its application determined. The judge held that it would not. STA had already been given an extension of time in which to bring a challenge under s.68 or to request a further extension. STA was solely responsible for having failed to avail itself of the usual period or that extension. This followed on from delays to the arbitration itself for which, as it seemed, STA was solely responsible and the application sought appeared intrinsically weak.

For these reasons, and in particular because of the length and circumstances of the delay and the absence of an adequate explanation for it, the judge dismissed STA's application.

This case provides useful analysis on how the court will apply the Kalmneft factors when considering an application to extend time for challenging an arbitral award. Of particular interest are the judge’s comments that the length of the arbitration and the sums at stake are irrelevant when it comes to considering the length of delay in applying. Further, this judgment provides a reminder that in order to rely on any COVID-19 related disruption, the court will require detailed and specific evidence.

In the case of STA -v- OFY, the court considered the relevant factors applicable to granting an extension of time to challenge an arbitration award.

Factual background

This was an application by a state government (STA) for an extension of time to bring a challenge under section 68 of the Arbitration Act 1996 (the Act) in respect of a final award (the Final Award).

The arbitration was between STA and the defendant (OFY). The dispute arose out of what OFY contended was the wrongful repudiation by STA of a contract, under which OFY was to provide a fast-track power generation solution (the Contract). OFY's case was that, because of STA's repudiation, it was entitled to receive an Early Termination Payment. By the Final Award the tribunal ordered STA to pay to OFY the full amount of the Early Termination Payment, namely US$134,348,661 plus interest and costs, and dismissed STA's counterclaim.

The Final Award was dated 26 January 2021. The 28-day period prescribed by s.70(3) of the Act would have expired on 22 February 2021.

On 19 February 2021, STA applied ex parte on paper for an extension of time until 19 April 2021 to bring a challenge. In that first extension application, STA’s then solicitors gave evidence that they had been instructed the previous day, were reviewing the documents and gave reasons for seeking an extension of 56 days, including that there had been delays in their instruction due to "the painstaking and bureaucratic decision-making process”, a change in government and that COVID-19 had contributed to the delay, in particular because key members of the Office of the Attorney General contracted COVID-19, which had contributed to the disruption to the Office and STA's civil service still relied heavily on paper documents.

The Court extended the time for STA to issue and serve any challenge to the Final Award under s.67/68 of the Arbitration Act 1996 to 8 March 2021, and ordered that any application for a further extension of time had to be issued and served by 5 March 2021.

No application was made for a further extension by 5 March 2021, and no challenge under s.67 or s.68 of the Act was issued by 8 March 2021.

On 1 April 2021 STA, by its new solicitors, issued a claim form, applying under s.68(2)(c) and s. 68(2)(d) of the Act to set aside the Final Award based on two particular points. STA also issued an application notice seeking an extension of time for the bringing of a challenge to the Final Award.

Legal analysis

It was common ground that STA’s application for an extension of time to challenge the Final Award was to be assessed by reference to the factors set out in Kalmneft -v- Glencore International AG [2002] 1 Lloyd's Rep 128 and considered further in Terna Bahrain -v- Bin Kamil [2012] EWHC 3283 (Comm).

Taking each Kalmneft factor in turn, the judge held as follows.

Length of delay

The issue of the application for a second extension was 38 days after the 28-day period stipulated by the Act, and 27 days after the expiration of the deadline imposed by the initial order. In circumstances where, (per Terna Bahrain) the length of delay was to be judged against the yardstick of the 28 days provided for in the Act, and, in the present case, also against the yardstick of the length of the initial extension granted there was no doubt that the delay was significant and substantial.

The judge rejected STA’s argument that the delay ought not to be regarded as significant in view of the length of the arbitration and the amount of money involved: the length of the arbitration process should not have any significant bearing on the time within which an application should be made after an award and by contrast, the fact that a large sum was at stake might exacerbate the seriousness and significance of a failure to act promptly.

Did the applicant act reasonably?

STA did not act reasonably. This was a case in which it was required to act promptly not only in accordance with the time period specified by the Act, but also in light of the initial order. STA had given no adequate explanation of the delay.

The change in government did not mean that STA was unable to act in the meantime. In any event, in the present context of applications in respect of arbitrations the fact that a party was a foreign state was a matter of little significance: a foreign state was a litigant like any other litigant and was expected to comply with the rules and provisions of the CPR.

Further, the evidence as to the way in which COVID-19 was said to have affected STA was wholly inadequate to place any significant weight on this point. The court was now well used to evaluating contentions as to the effect of the pandemic on litigants and litigation. What was required, and was regularly provided, was a detailed explanation of the way in which the pandemic had affected particular people or particular processes. Such evidence was lacking.

Did OFY or the tribunal contribute to the delay?

There was no suggestion in this case that OFY or the tribunal had caused or contributed to the delay.

Prejudice

There was no evidence of prejudice which would be suffered by OFY by reason of the delay, other than the prejudice entailed by delay in enforcing the Final Award, though that was itself a form of prejudice even if there could be an award of interest. It was, however, well established that the absence of prejudice to the respondent was not a necessary condition for the refusal of an extension.

Continuation of arbitration?

The Final Award disposed of all claims and counterclaims, and so the arbitration had not continued during the period of the delay.

The merits of the proposed challenge

The present was one of the relatively infrequently encountered cases in which the court could see that the grounds of the proposed challenge were intrinsically weak.

Two grounds had been advanced in the claim form. The first was the contention that the tribunal had failed to be "guided by the terms and conditions of the contract", and that this constituted a failure to conduct the proceedings in accordance with the procedure agreed between the parties. However, this was a clear case of an attempt to present alleged errors of law as errors of procedure, by means of the contention that the findings of the tribunal did not accord with the terms of the agreement.

STA's second complaint was that the tribunal had failed to deal with all the issues, which were put to it and specifically its argument that OFY was not entitled to claim mobilisation costs because STA had not allocated a site. However, it was clear that the tribunal had dealt with this issue at various paragraphs of the Final Award.

Unfairness

The final factor was whether, in the broadest sense, it would be unfair to STA to be denied the opportunity of having its application determined. The judge held that it would not. STA had already been given an extension of time in which to bring a challenge under s.68 or to request a further extension. STA was solely responsible for having failed to avail itself of the usual period or that extension. This followed on from delays to the arbitration itself for which, as it seemed, STA was solely responsible and the application sought appeared intrinsically weak.

For these reasons, and in particular because of the length and circumstances of the delay and the absence of an adequate explanation for it, the judge dismissed STA's application.

This case provides useful analysis on how the court will apply the Kalmneft factors when considering an application to extend time for challenging an arbitral award. Of particular interest are the judge’s comments that the length of the arbitration and the sums at stake are irrelevant when it comes to considering the length of delay in applying. Further, this judgment provides a reminder that in order to rely on any COVID-19 related disruption, the court will require detailed and specific evidence.