CL-2024-000510 - [2025] EWHC 1523 (Comm)

In the result, both the section 68 challenge and the section 67 challenge fail on their merits. This is certainly not a case where the Claimants have surmounted the high threshold of showing that the arbitral tribunal has gone so wrong in its conduct that justice cries out for it to be corrected (Footnote: ¹²) and the Tribunal throughout undoubtedly had substantive jurisdiction to make its award.

I would add that, since I have found that there was no serious irregularity (apparent bias) affecting the Tribunal in this case, it is unnecessary to go on to consider whether that alleged serious irregularity has caused substantial injustice to the Claimants.

In view of the failure of the Claimants’ substantive challenge under sections 67 and 68, I shall deal relatively briefly with K’s procedural challenges as follows:

The Tribunal issued its Award on 12 August 2024. By section 70(3) of the Act, the 28-day period for any application or appeal under sections 67-69 expired on 9 September 2024.

On 5 September 2024, the Claimants issued their Arbitration Claim Form. That Arbitration Claim Form was never served on K, despite Reed Smith requesting, by email dated 13 September 2024 that Zaiwalla do so. Instead, on 6 September 2024 the Claimants filed an ex parte application for permission to amend the Claim Form and for a 28-day extension of time for service of that Amended Claim Form and to bring a section 68 or section 69 challenge (the “Ex Parte Application”). This was supported by a witness statement from the Claimants’ solicitors (“Crestohl 1”) dated 5 September 2024.

Bright J. granted the application on 10 September 2024, and extended time until 4pm on Monday 7 October 2024 to bring a section 68 or section 69 challenge (but not a section 67 challenge, which the Claimants had not sought). But for the Bright J. Order, the Claim Form would have expired after one month, namely on 5 October 2024.

On the very last day of the extended period, namely 7 October 2024, Zaiwalla purported to serve the Amended Claim Form and other documents on Reed Smith by email. Reed Smith had not indicated their willingness to accept service by email. Under CPR PD 6A, paragraph 4.1, service may be effected by email only if the party to be served, or their solicitors, have indicated in writing that they will accept service by this means. Further still, 7 October 2024 was too late to effect service in any event as service by email on that date would not have been deemed to take effect until 2 business days later: CPR 6.14. Service was therefore defective in any event.

One week after its attempt to effect electronic service, Zaiwalla purported to effect service by post, sending hard copies of the Claim Form and related documents to Reed Smith on 15 October 2024. By that time the Claim Form had expired, but had it not, deemed service would have occurred on 17 October 2024.

On 25 October 2024 K applied to set aside service upon it of the Claim Form and the Amended Claim Form, in particular pursuant to CPR 11. The Claimants’ responsive evidence (“Crestohl 3”) did not contest that K had not given written indication that service could be effected on it electronically. However, it was not until 2 December 2024 (around 5 weeks after K filed its application), that the Claimants applied under CPR 6.15(2) for retrospective validation of their purported service by email on 7 October, as well as for relief from sanctions under CPR 3.9, on the ground that K was “playing technical games” and its challenge was “wholly technical” because it was made aware of the contents of the Amended Claim Form by email on 7 October. The Claimants did not address the criteria under CPR 3.9 or explain its 5-week delay in filing the application.

CPR 6.15 provides as follows:

“Service of the claim form by an alternative method or at an alternative place

6.15

(1)

Where it appears to the court that there is a good reason to authorise service by a method or at a place not otherwise permitted by this Part, the court may make an order permitting service by an alternative method or at an alternative place.

(2)

On an application under this rule, the court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service.”

As Lord Clarke stated in Abela v Baadarani [2013] 1 WLR 2043 at [33], “under rule 6.15(2), in a case not involving the Hague Service Convention or a bilateral service Treaty, the court should simply ask whether, in all the circumstances, there is good reason to order that steps taken to bring the claim form to the attention of the defendant is good service.”

Whether there is good reason so to order is a matter of factual evaluation which does not lend itself to over-analysis: Barton v Wright Hassall LLP [2018] 1 WLR 1119 at [9]. In particular Lord Sumption explained as follows (in elaborating upon Abela):

Crucially, Lord Sumption stated as follows in Barton at [16]:

“The first point to be made is that it cannot be enough that Mr. Barton’s mode of service successfully brought the claim form to the attention of Berrymans. As Lord Clarke JSC pointed out in Abela v Baadarani [2013] 1WLR 2043, this is likely to be a necessary condition for an order under CPR r 6.15, but it is not a sufficient one. Although the purpose of service is to bring the contents of the claim form to the attention of the defendant, the manner in which this is done is also important. Rules of court must identify some formal step which can be treated as making him aware of it. This is because a bright line rule is necessary in order to determine the exact point from which time runs for the taking of further steps or the entry of judgment in default of them. Service of the claim form within its period of validity may have significant implications for the operation of any relevant limitation period, as they do in this case. Time stops running for limitation purposes when the claim form is issued. The period of validity of the claim form is therefore equivalent to an extension of the limitation period before the proceedings can effectively begin. It is important that there should be a finite limit on that extension. An order under CPR r 6.15 necessarily has the effect of further extending it. For these reasons it has never been enough that the defendant should be aware of the contents of an originating document such as a claim form. Otherwise any unauthorised mode of service would be acceptable, notwithstanding that it fulfilled none of the other purposes of serving originating process.”

Mr. Barton had failed to take reasonable steps to serve the claim form in accordance with the rules (CPR 7.5). All that he did was employ a mode of service which he should have appreciated was not in accordance with the rules [21].

Like the Claimants in this case, Mr. Barton advanced the submission that the defendant had been playing “technical games” with him. However, the sole basis for that submission was that the defendant had taken the point that service was invalid. Since they did nothing before the purported service by e-mail to suggest that they would not take the point, Lord Sumption explained that this did nothing to advance Mr. Barton’s case [22].

Lord Sumption also observed at [23] that Mr. Barton had failed to “allow himself time to rectify any mishap. But having issued the claim form at the very end of the limitation period and opted not to have it served by the court, he then made no attempt to serve it himself until the very end of its period of validity. A person who courts disaster in this way can have only a very limited claim on the court’s indulgence in an application under CPR r 6.15(2). By comparison, the prejudice to [the defendant] is palpable. They will retrospectively be deprived of an accrued limitation defence if service is validated.”

This is strikingly similar to the facts of the instant case. As was the case in R v The Good Law Project v Secretary of State for Health and Social Care [2022] EWCA Civ 355 at [97], the starting-point in the instant case is that we are concerned with an application for retrospective validation of a non-compliant form of service in circumstances where the effect of the order sought would be to deprive the defendant of a limitation defence. The loss of a limitation defence is an important factor in the exercise of the court’s discretion.

Moreover, this is not one of the typical types of case where it would be just to retrospectively validate non-compliant service, such as where the defendant has obstructed compliant service or where a claimant has taken reasonable steps to effect service but has been thwarted by some unforeseen external occurrence: The Good Law Project at [98]. Rather, all that the Claimants did was employ a mode of service which they should have appreciated was not in accordance with the rules.

Despite being given an extended period to serve their amended Claim Form, as in Barton the Claimants chose to do so on the very last day of the extended period, giving themselves no time to rectify their careless error. This was not a technical or trivial procedural error, or a case of K “playing technical games”; rather, the error was entirely of the Claimants’ own making. Indeed, as Underhill LJ stated in Good Law Project at [101]:

“A claimant is asking for a retrospective validation of non-compliant service in order to circumvent a limitation defence. Quite trivial errors can sometimes lead to limitation deadlines being missed. That can be harsh, and may be characterised as technical; but it is recognised as a necessary consequence of a limitation regime. The court will in this context be less ready to overlook mistakes of a kind which in other contexts would be accorded no real weight.”

In the circumstances, I do not consider that there is good reason to order that the steps taken to bring the claim form to the attention of K is good service. Accordingly service of the Arbitration Claim Form, as originally served and as amended, should not be retrospectively validated under CPR 6.15(2).

I also accept the submission of Mr. Mander that the Claimants’ alternative ground for retrospectively validating service of the Arbitration Claim Form, based upon CPR 3.9 (and applying the three stage test in Denton v White [2014] EWCA Civ 906 (Footnote: ¹³)), is misconceived, as CPR 3.9 is not an alternative route to validation of defective service of originating process. As Carr LJ stated in the Good Law Project at [79]:

“However and fundamentally, the court in Denton v White was not addressing relief from sanctions (or extensions of time) in the context of service of originating process. As set out above, applications for extensions of time for service of Part 7 and Part 8 claims do not fall under CPR r 3.1(2)(a) (but under CPR r 7.6). There is nothing to suggest that the court in Denton v White (or Hysaj) had in mind failures in service of originating process and applications for extensions of time for service of any claim of any sort, including judicial review claims. The three cases the subject of the appeals in Denton v White involved failures to comply with procedural failures during the life of the claims in question, that is to say after service of the claim forms. The breaches were variously late service of witness statements, failure to comply with an "unless” order, late service of a costs budget and late reporting of the outcome of settlement negotiations. The earlier case of Mitchell v News Group Newspapers Ltd (Practice Note) [2014] 1WLR 795("Mitchell”) also arose out of the late filing of a costs budget. The cases following Mitchell and considered in Denton v White (at paras 13—19) arose out of late service of particulars of claim, late disclosure, late service of witness statements and late tendering of security for costs. Hysaj involved late service of a notice of appeal.”

The same approach to CPR 3.9 was adopted in Barton at [8] (Footnote: ¹⁴).

But even if CPR 3.9 and the three-stage Denton test did apply in this case, I would not have granted the Claimants relief from sanctions in any event because in short, as the Defendant rightly submits, the failure to comply with CPR 7.5 was serious (giving rise as it did to the expiry of the limitation period); it arose as a result of carelessness on the part of the Claimants; and there are no countervailing factors. Indeed, the application for relief was not even made promptly: see paragraph 161 above. So far as the original Claim Form is concerned, the Claimants state that they chose not to serve it on K “because they were mindful that such claim form did not reflect the full legal advice which they would have wished to obtain”. They refer to it as a “placeholder” with a view to it being updated once permission had been granted for an extension of time for service of an Amended Claim Form and Counsel’s views had been obtained. That is an extraordinary position to adopt and certainly provides no justification for the default which occurred.

I accordingly refuse the Claimants’ application for service of the Arbitration Claim Form to be retrospectively validated pursuant to CPR 6.15(2) or CPR 3.9, with the consequence that the claim fails for this reason as well.

In the circumstances, it is unnecessary to go on to consider the issues referred to in paragraph 155(2) and (3) above.

So far as paragraphs 155(5) is concerned, I refuse permission to amend the Claim Form to include a challenge to the Award under s. 67 of the Act because I consider it to be unarguable by reason of the matters set out in paragraphs 17-18 and 21-47 above. In the circumstances I do not intend to add to the length of this judgment by considering the nice question (referred to in paragraph 155(4) above) of whether the Claimants have waived their rights to pursue their ss. 67 and/or 68 challenges under s. 73(1) of the Act.

In the circumstances, the Claimants’ challenges under sections 67 and 68 of the Act both fail and the arbitration claim is dismissed.