Out-Law / Your Daily Need-To-Know

Time to challenge appeal begins at date of award, says High Court

Out-Law News | 29 Apr 2016 | 5:47 pm | 2 min. read

The time allowed to challenge an arbitration award begins on the date that the award is made, and not when the parties receive it, the High Court in England has said.

The court had been asked to grant an extension of time to challenge an award that was made on 27 March 2015. The statutory time limit for an application to challenge the award was 28 days; until 24 April 2015 in this case. 

The tribunal, however, did not release the award until fees had been paid by the parties, on 20 June.

A party known as "S" then applied to challenge the award and to appeal on a point of law, and asked for a time extension as the application was 74 days over the time limit.

The court refused to grant an extension, due to the length of the delay and the fact that S had been both slow to pay its own share of the tribunal fees and slow to chase its opponents for their share. The amount outstanding could easily have been paid by S, it said.

"In total it took the sellers 102 days to issue these proceedings: almost four times as long as it should have done," the judge, Sir Bernard Eder, said in his judgment.

"To allow a party to take 102 days instead of the usual 28 would of itself undermine the policy of the Act with its emphasis on speed and finality," he said.

"Further … the outstanding fees were relatively modest; and there is no suggestion here that there was any financial difficulty in making the payments necessary to obtain the release of the award," he said.

Arbitration expert Richard Twomey of Pinsent Masons, the law firm behind Out-Law.com, said: "The Commercial Court decision is a valuable reminder to parties seeking to challenge an arbitral award that the time runs from the actual date of the award and not when it is actually released to the parties."

"Parties need to be mindful that generally a tribunal will not release an award until its fees are paid and it would only be in rare circumstances, such as a party’s financial difficulty, that a tribunal would consider releasing the award before payment," Twomey said.

Nicola King, also of Pinsent Masons, said: "In this case the length of the delay in making the application to challenge was taken into consideration, as well as the fact the tribunal fees were modest. A court may be more sympathetic to parties that are only a day or two late in submitting an appeal request.”

"The court considered the merits of the grounds of appeal under the Arbitration Act and concluded that this was not a case which could properly be regarded as giving rise to a serious irregularity. Sir Bernard was also not persuaded that the decision of the tribunal was 'obviously wrong', of 'general public importance' or at least 'open to serious doubt' within the meaning of the Act. The court may be more favourably to agreeing an extension if the claimant’s challenge had clear merits," she said.