CL-2025-000207 - [2025] EWHC 2713 (Comm)

These facts raise the question of principle whether the 28-day period allowed by section 70(3) of the Arbitration Act 1996 for an appeal under section 69 runs, in this case, (a) from the date of the Appeal Award or (b) from the date when the Claimant received the Appeal Award and so received its result.

This was all before the effective date of the Arbitration Act 2025. Prior to amendment by the Arbitration Act 2025, section 70(3) of the Arbitration Act 1996 provided as follows:

“70 Challenge or appeal: supplementary provisions.

(1)

The following provisions apply to an application or appeal under section 67, 68 or 69.

(2)

An application or appeal may not be brought if the applicant or appellant has not first exhausted—

(a)

any available arbitral process of appeal or review, and

(b)

any available recourse under section 57 (correction of award or additional award).

(3)

Any application or appeal 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.”

Mr Pennington-Benton and Mr Smith KC found only two authorities that directly addressed the running of time under section 70(3) in the context of an arbitral appeal.

The first is UR Power GmbH v Kuok Oils and Grains Pte Ltd [2009] EWHC 1940 (Comm), at [58]-[60]. This, too, was a FOSFA case, involving a section 68 challenge by one of the parties (“Kuok”) to the ruling of the FOSFA Board of Appeal. Gross J introduced this section of his judgment at [54], noting that it was academic in the light of the conclusions set out in the preceding section of the judgment (where he had already concluded that the section 68 challenge had no merit), and that he therefore would express his conclusions briefly. I therefore agree with the parties that the observations at [58]-[60] are obiter. Nevertheless, Gross J’s reasons naturally deserve careful consideration:

“58.

The meaning of the wording in section 70(3), "… if there has been any arbitral process of appeal or review …", is, admittedly, puzzling. For my part, however, I am satisfied that whatever the true scope of that wording, Kuok’s suggested interpretation cannot be correct.

(i)

First, I am unable to accept that this wording applies to appeals within well-known two-tier arbitration schemes such as FOSFA or that of the Grain and Feed Trades Association ("GAFTA"). I was not referred by either party to any case where it was suggested that this wording was somehow applicable to arbitrations of this nature; if the Kuok construction was correct, it is surprising that there have not been any such authorities. To the contrary, it seems far more likely that the relevant date has been at least assumed to be the date of the appeal award in such schemes. See, for instance, Al Hadha Trading Co v Tradigrain SA [2002] 2 Lloyd’s Rep 512, at para 64.

(ii)

Secondly, the construction suggested by Kuok could readily result in a different cut-off date for applications brought by each party; on the Kuok construction, time would start counting only when the individual party was notified of the result in question. At first blush and as a matter of practicality, it would be surprising if Parliament had legislated to produce such an outcome.

(iii)

Thirdly, there can be no doubting the status of the Advisory Committee of the Department of Industry ("the DAC") and the considerable weight to be given to its views on the clauses of the Bill preceding the Act. In its report of February 1996, the DAC said this (at para 294) of the then clause 70(3), now section 70(3):

… It is possible that the time limit in Clause 70(3) will have expired by the time an award is released. However, the DAC is of the view that the date of the award is the only incontrovertible date from which the time period should run. Any other starting point would result in great uncertainty (eg as to the exact point at which an award is "released" or "delivered"). Further, any difficulties arising from specific circumstances can be easily remedied by way of an extension of time …

It is of course fair to say that this passage in the DAC’s February 1996 report does not by itself answer the question of interpretation which has arisen here. It says nothing as to the meaning of the key words in section 70(3) relied upon by Kuok. But the DAC was clearly interested in promoting certainty and the Kuok interpretation of section 70(3) would produce the very uncertainty the DAC was anxious to avoid.

59.

For these reasons, I prefer the URP to the Kuok interpretation of section 70(3). In the case of a FOSFA appeal award, time for any challenge starts running from the date of the appeal award.

60.

For completeness, I express no concluded view as to the true ambit of the words in section 70(3), "… if there has been any arbitral process of appeal or review…". I am tentatively attracted to the view that they refer to such arbitration schemes which have some particular internal process for reconsideration of the award or appeal award. However that may be, I do not believe that this wording has any application to FOSFA or, for that matter, GAFTA appeal arbitrations. In such cases, it is the date of the award, or appeal award, as the case may be, which starts time counting.”

At the very end of his judgment, Gross J said that, if it had mattered, he would have granted an extension of time pursuant to section 80(5) of the Arbitration Act 1996, on the basis that the cause of the delay was Kuok’s solicitor’s mistaken interpretation of section 70(3). Gross J evidently regarded this mistake as excusable, given the puzzle presented by the wording of the provision (cf. his comments at [58]).

The second judgment that touches on the running of time under section 70(3) where there is an arbitral appeal is PEC Ltd v Asia Golden Rice Co Ltd [2012] EWHC 846 (Comm). This involved a GAFTA arbitration, but one party (“PEC”) claimed that GAFTA had no jurisdiction. The first-tier tribunal rejected this argument and awarded damages against PEC. Under the GAFTA Rules, there could not be an appeal to the GAFTA Appeal Board against the ruling on jurisdiction, but there could be against the award of damages. PEC appealed to the Appeal Board against the award, to the extent that the GAFTA Rules permitted. It also commenced proceedings under section 67 of the Arbitration Act 1996, disputing the first-tier tribunal’s ruling on jurisdiction. The section 67 proceedings were commenced more than 28 days after the award of the first-tier tribunal, giving rise to the question whether time for the section 67 challenge ran from the date of the first-tier award or from the date of the GAFTA Appeal Award. It was ultimately agreed between the parties that the court could and should grant PEC an extension of time, but Hamblen J nevertheless gave the question some consideration:

“8.

It was ultimately agreed between the parties that the court had jurisdiction to grant an extension of time and should grant such an extension, with further directions also being agreed.

9.

However, since the court has itself to be so satisfied and the present case indicates that there is some uncertainty as to the legal position I shall briefly set out my reasons for so concluding.

…

14.

I agree, however, with AGR that the effect of GAFTA 125 Rules 8.1(b) and 10.1 is that a first-tier award in which the tribunal determines that it has jurisdiction is "conclusive and binding" so far as the question of jurisdiction is concerned. The only way in which such a determination that the tribunal has jurisdiction may be challenged is by way of application to the court under section 67 of the 1996 Act. The time limit for bringing such a challenge is "within 28 days of the date of the award" pursuant to section 70(3) of the 1996 Act. The first-tier award must be and is the only relevant award for this purpose.

15.

I also agree with AGR that it is wrong to state that time is not yet running under section 70(3) because PEC "has not first exhausted . . . any available arbitral process of appeal or review" within the meaning of section 70(2) of the 1996 Act. In particular, so far as the question of jurisdiction is concerned, there is no "available arbitral process of appeal or review" (emphasis added). This is clear from Rule 8.1(b) of GAFTA 125. It will be noted that PEC has (correctly) not raised any question of jurisdiction in its statement of case in the GAFTA Appeal.

16.

It follows that under arbitration rules such as GAFTA 125 challenges to a decision of a first-tier tribunal that it has jurisdiction must be made within 28 days of that first-tier award regardless of whether there is an appeal on other matters, even overlapping matters, to the Board of Appeal.

17.

AGR further submitted that in any event, it is doubtful that the words "available arbitral process of appeal or review" refer to GAFTA appeals at all. In this connection I was referred to the judgment of Gross J in UR Power GmbH v Kuok Oils and Grains Pte Ltd [2009] 2 Lloyd’s Rep 495 at [60], in which he expressed the view (obiter) that these words (in section 70(3) of the 1996 Act) did not refer to GAFTA appeal arbitrations. This was disputed by PEC who submitted that the GAFTA appeal procedure is a paradigm example of an "arbitral process of appeal".

18.

It is not necessary to decide this issue in the present case. However, I consider that this is very much an open question, notwithstanding the obiter comments made by Gross J. In particular, it is difficult to see how the GAFTA appeal procedure is not an "arbitral process of appeal" and, moreover, neither party was able to identify any "arbitral process of appeal" other than those provided under rules such as those of GAFTA or FOSFA. The forceful practical point made by Gross J was that the time limit for challenges to an appeal award should run, and has long been recognised to run, from the date of the award rather than from the uncertain time of notification of the outcome, which itself might differ as between the parties. A possible answer would be to construe section 70(3) as imposing the different time limit of 28 days from notification of the result of the arbitral process of appeal or review as applying in cases in which the appeal or review does not culminate in an award. Where it does culminate in an award then it is from the date of that award that time runs.

19.

Regardless of whether or not that is correct I conclude that in this case the time limit for a section 67 challenge has expired and that therefore an extension of time is required.

…

21.

The principal factors of relevance to an application for extension of time are set out in AOOT Kalmneft v Glencore International AG [2002] 1 Lloyd’s Rep 128 at [59]; see also The Amer Energy [2009] 2 Lloyd’s Rep 293 at [13]. I am satisfied that this is an appropriate case for an extension of time given in particular that: (1) the length of the delay is short - eight days; (2) there was some uncertainty as to whether the time limit applied so that PEC's failure to comply with it is explicable and, moreover, was fuelled by a desire to avoid any unnecessary costs; and (3) no real still less irredeemable prejudice has been suffered by AGR.”

Mr Pennington-Benton and Mr Smith KC agreed that Hamblen J’s comments were obiter, and I again agree in relation to what he said at [18]. However, the rest of Hamblen’s J’s judgment was not obiter, including the other paragraphs that I have set out above; this is evident from the comments at [9], in particular the statement that “the court has itself to be so satisfied”.

There is a tension between Gross J’s tentative view in UR Power GmbH v Kuok Oils and Grains Pte Ltd at [60] that the words “if there has been any arbitral process of appeal or review” do not apply to FOSFA or GAFTA appeal arbitrations and Hamblen J’s view in PEC Ltd v Asia Golden Rice Co Ltd at [18] that they do. In the light of subsequent decisions on section 70(2), where the phrase “arbitral process of appeal or review” is also used and where it must have the same meaning, it must now be clear that FOSFA and GAFTA appeal arbitrations do, in principle, fall within this phrase: A Ltd v B Ltd [2014] EWHC 870 (Comm), per Andrew Smith J at [10]; Daewoo Shipbuilding & Marine Engineering Co Ltd v Songa Offshore Equinox Ltd [2018] EWHC 538 (Comm), per Bryan J at [53].

Otherwise, however, Gross J and Hamblen J essentially agreed on the fundamental point: any challenge under the Arbitration Act 1996 to an appeal award must run from the date of the appeal award: see UR Power GmbH v Kuok Oils and Grains Pte Ltd at [59] and PEC Ltd v Asia Golden Rice Co Ltd at [18], fourth sentence.

I do not find this mysterious, or (in Gross J’s word) puzzling. Any challenge under sections 67, 68 or 69 of the Arbitration Act 1996 must relate to an award, this being where the tribunal’s reasons are set out; this is reflected in the words of sections 67, 68 and 69; and see further section 52(4), which requires the award to contain the tribunal’s reasons (unless otherwise agreed). It therefore is entirely natural that the first limb of section 70(3) sets out the primary or default position in relation to the running of time, by reference to the date of the award.

When understood in this context, the second limb of section 70(3), referring to “any arbitral process of appeal or review”, must mean any arbitral appeal or review of the award that is intended to be the subject of the challenge under section 67, 68 or 69. Where that award is the subject of an arbitral appeal or review, the normal 28-day period for the challenge under 67, 68 or 69 is extended, pending the outcome of that arbitral appeal or review. However, where there is or cannot be any arbitral appeal or review of the relevant award, the second limb does not apply.

In the present case, when the FTT Award was issued on 27 March 2024, there was an available arbitral process of appeal or review, at least for some purposes, viz. appeal to the FOSFA Appeal Board. This potentially brought into play section 70(2)(a) and the second limb of section 70(3) – or might have, if the Claimant had sought to appeal the FTT Award. However, the section 69 appeal in this case does not relate to the FTT Award.

By contrast, when the Appeal Award was issued on 26 March 2025, there was no available arbitral process of appeal or review. The Appeal Award could only be challenged by an arbitration claim to the High Court, under the Arbitration Act 1996. Therefore, only the first limb of section 70(3) was and is relevant. Time began to run from 26 March 2025.

This approach is consistent with all three of the important observations made by Gross J in UR Power GmbH v Kuok Oils and Grains Pte Ltd at [58]. It is also consistent with Hamblen J’s point in PEC Ltd v Asia Golden Rice Co Ltd at [14]-[16], noting that the appeal to the GAFTA Appeal Board in relation to the award of damages was not relevant to the case before him; the section 67 jurisdictional challenge did not relate to the GAFTA appeal proceedings; it related to the first-tier award; and there was no available arbitral process of appeal or review in respect of that first-tier award, as regards jurisdiction.

A further illustration is provided by the facts in A Ltd v B Ltd. This concerned an arbitration under the rules of the International Cotton Association (“ICA”), which provided for arbitral appeals. An award was issued on 26 February 2013, which was adverse to A Ltd. A Ltd sent a notice of appeal to the ICA, but failed to remit the funds that the ICA required, for the appeal to progress. The appeal therefore was dismissed administratively, without an appeal award, on 24 April 2013. A Ltd applied for an extension of time on 3 May 2013, which the ICA refused. A Ltd then commenced proceedings under the Arbitration Act 1996 on 22 May 2013, challenging the award of 26 February 2013 under sections 67 and 68. This was more than 28 days after the award that A Ltd sought to challenge, but within 28 days from the date when A Ltd learnt the result of its arbitral appeal.

In that case, there does not appear to have been any argument as to whether the High Court proceedings were brought within time under section 70(3): rightly so, because the award that was the subject of the section 67 and 68 challenges had been the subject of an arbitral process of appeal, within the second limb of section 70(3); therefore, time did not start to run until 24 April 2023 at the earliest (and possibly not until A Ltd’s application for an extension of time was refused by the ICA; see the judgment at [21]).

Mr Pennington-Benton submitted that, in the present case, the fact that the FTT Award was the subject of an arbitral appeal to the FOSFA Board of Appeal meant that time for an appeal under section 69 ran from the date when the Appeal Award was sent to the Claimant, rather than the date of the Appeal Award. I would have understood this submission, if the section 69 appeal had related to the FTT Award, rather than the Appeal Award – cf. the facts of A Ltd v B Ltd. However, the submission cannot be right where the appeal relates to the Appeal Award, and where there is no arbitral process of appeal or review in relation to the Appeal Award.

Mr Pennington-Benton also referred to section 55 of the Arbitration Act 1996, which relates to notification of the award, as an aid to understanding the reference to notification in the second limb of section 70(3). However, on the approach that I have suggested, the second limb simply does not arise. Furthermore, Mr Pennington-Benton accepted that FOSFA did not have to release the Appeal Award until it had received payment: see section 55(3) and section 56(1).

I understand Gross J to have been suggesting in UR Power GmbH v Kuok Oils and Grains Pte Ltd at [58(i)] that there was a general understanding among arbitration professionals that time for any challenges to a FOSFA and GAFTA appeal runs from the date of the appeal award, and that he was citing Al Hadha Trading Co v Tradigrain SA [2002] 2 Lloyd’s Rep 512, at [64], as an example. If so, that certainly reflects my own experience. More importantly, it reflects the purpose of section 70(3), as encapsulated in the extract from the DAC report quoted by Gross J at [58(iii)].

The approach to the first and second limbs of section 70(3) that I have suggested above fits with these precepts, as well as (in my view) being a natural reading that easily accommodates the words used by the statutory draftsman and their context. The Claimant’s case does not.

I therefore find that the claim form was not issued within time under section 70(3).