Not Logged In, Login,

Wednesday, January 17, 2018

EXTENSION OF STATUTORY TIME LIMIT FOR APPLYING TO THE COURT UNDER SECTIONS 67/8/9 OF THE ARBITRATION ACT 1996

We wish to advise members of this recent decision of Mr Justice Colman. The case concerned a contract governed by English law which provided for disputes to be submitted to arbitration in London under the English Arbitration Act. The claimant disputed the arbitrator's jurisdiction, submitting that it was not bound by the English courts or the arbitration clause because the contract was invalid having been fraudulently entered into.

The Court held that by section 31 of the 1996 Act, the arbitrator could rule on the objection to his jurisdiction in an award as to jurisdiction or deal with it in his award on the merits.

The arbitrator made an award as to jurisdiction. This was after written submissions but without any supporting evidence having been received from the claimant. The claimant disputed this award and made applications to the Court under sections 67 and 68 of the Act to set aside the ruling.

The Act provided that the rules concerning extending periods of time were those of the Civil Procedure Rules. His Lordship held that the criteria applicable to applications to extend time under the 1996 Act differed from those under the rules, as the 1996 Act was based upon the principles of party autonomy and finality of awards, thus restricting the supervisory role and interventions of the court in arbitration proceedings and avoiding unnecessary delay or expense. His Lordship went on to say that the following considerations were likely to be material:

i) Length of delay;
ii) Whether in permitting the time limit to expire and the subsequent delay to occur, the party was acting reasonably in all the circumstances;
iii) Whether the respondent to the application caused or contributed to the delay;
iv) Whether that respondent would by reason of the delay suffer irremediable prejudice in addition to mere loss of time if the application proceeded;
v) Whether the arbitration had continued during the period of delay and if so what impact on the progress of the arbitration or the costs incurred a determination of the application might have;
vi) The strength of the application;
vii) Whether in the broadest sense it would be unfair to the applicant to deny him the opportunity to have the application determined.

The weight to be given to those considerations was likely to be influenced by the general considerations of avoiding delay and expense, public policy encouraging foreign commercial parties to use English arbitration and making allowances for parties inexperienced at international arbitration who had to move more tentatively.

The Court held that the claimant had failed to show any reasonable excuse for its non-compliance with the time limits and therefore dismissed the application.

Comment

It has always been something of an uphill struggle to seek to make an application out of time. This decision provides helpful clarification of the criteria that a court should consider when considering to extend time in relation to an application made under the Arbitration Act 1996.

Source: The Times 20 November 2001

Contact: John Fawcett-Ellis