CL-2024-000457, 000458, 000459 - [2025] EWHC 1803 (Comm)

As well as replying to those cases on their respective merits, which in the present context includes their admissibility as arguments on a s.69 appeal, Mr Nolan KC said of the second alternative case that it was not open to the seller, because there had been no respondent’s notice to raise it.

An objection that an argument is not available to a respondent on the final hearing of a s.69 appeal may be an objection that due to the nature of such an appeal, and recognising the primacy of the arbitral process, the argument is one that the court cannot or should not entertain. That is what I mean when referring to the admissibility of an argument on a s.69 appeal.

An argument that is inadmissible in that sense cannot affect the outcome of the s.69 appeal for what is, in context, a substantive reason, concerning the proper ambit of intervention by the court under the 1996 Act. Thus for instance, several authorities hold that under s.69 it is no more open to a respondent than it is to an appellant to go behind or beyond the arbitrators’ findings of fact, at all events if, in the case of going beyond those findings, the respondent would be seeking findings it did not seek from the arbitrators: see, for example, The Mary Nour (No.2), CTI Group Inc v Transclear SA [2007] EWHC 2340 (Comm); Cottonex Anstalt v Patriot Shipping Mills Ltd [2014] EWHC 236 (Comm); MUR Shipping BV v RTI Ltd [2022] EWHC 467 (Comm) (on appeal, not touching this point, [2022] EWCA Civ 1406, [2024] UKSC 18).

On the other hand, an objection to a respondent’s argument may be that it should not be allowed to rely on it for the procedural reason that the respondent failed to comply with an obligation relating to it that arose under the CPR or a Practice Direction (or an order giving directions in the particular case). That was the additional point taken against the seller’s second alternative case.

The premise for the objection was that notice of an intention to pursue the second alternative case should have been given under CPR PD62 para 12.6(2). PD62 para 12.6 is in these terms (as it has been since October 2010, when the default rule became for leave to appeal applications to be dealt with on paper such that oral hearings for leave have become vanishingly rare):

“A respondent who wishes to oppose an application for permission to appeal must file a respondent’s notice which–

(1)

sets out the grounds (but not the argument) on which the respondent opposes the application; and

(2)

states whether the respondent wishes to contend that the award should be upheld for reasons not expressed (or not fully expressed) in the award and, if so, states those reasons (but not the argument).”

The seller’s second alternative case, as clarified by Mr Debattista in oral argument, did not contend that the Awards should be upheld for reasons other than those given by the Board of Appeal. Rather, it contended that if the appeals were well founded, meaning that the Board was wrong in law to uphold the seller’s claims under s.49(2), the relief granted under s.69(7) should be or should include remission to the Board for it to consider in each case whether to uphold instead a different claim. So if CPR PD62 para 12.6 applied here at all, I would say that sub-paragraph (2) did not require that second alternative case to be stated in the respondent’s notice.

However, on its terms, CPR PD62 para 12.6 did not apply anyway. The seller did not oppose the leave to appeal application. On the plain language of the Practice Direction, it therefore came under no obligation to file a respondent’s notice. It might perhaps have been required to do so as a condition of granting it permission to participate, having acknowledged service so far out of time, but in fact unqualified permission was granted.

Foxton et al., “Mustill & Boyd: Commercial and Investor State Arbitration”, 3^rd Ed. (2024) at 14.167, cite MRI Trading AG v Erdenet Mining Corp LLP [2012] EWHC 1988 (Comm) at [39], for a proposition that, “If a party contends that an award should be upheld for reasons not set out in the award, [it] is required to file a respondent’s notice at the stage of the application for [leave] to appeal”. Eder J’s decision to allow the appeal in that case, and not remit to the arbitrators, was later upheld without reference to the procedural point: [2013] EWCA Civ 156.

The procedural objection, taken as it was only against the seller’s second alternative case, was not the subject of fully researched argument. Procedural objections like it have been considered a number of times in the case law, not all of which counsel cited. My dismissal of the procedural objection does not affect the outcome of these appeals because I agree with Mr Nolan KC’s submission that the seller’s second alternative case was inadmissible anyway (see paragraphs 62 to 63 below). I therefore did not delay matters by inviting further submissions on the case law, but Appendix A to this judgment sets out a fuller explanation of my conclusion that there was no good procedural objection, lest a different view be taken as to its decisiveness if the matter goes further.

The upshot is that, in my judgment: MRI Trading is not authority for the seemingly absolute proposition stated by Eder J; CPR PD62 para 12.6 should be applied in accordance with its terms; and there was no procedural breach by the seller beyond its failure to acknowledge service within time. After the order granting the seller permission to participate at the hearing, which contained no restriction on the arguments available to it in resisting the appeal, the seller was in the same position as if it had acknowledged service within time but had then chosen not to oppose the application for leave to appeal. The procedural rules do not require such a respondent to do anything more at the leave to appeal stage. If the court grants leave on the papers, then apart from complying with any directions given in the particular case, the respondent’s subsequent procedural obligations are only the usual ones applicable to preparation for and appearance at a hearing in this court, essentially cooperation as to hearing bundles and any other practicalities, and the timely filing and service of a skeleton argument.

If CPR PD62 para 12.6 had required the seller’s second alternative case to have been raised by a respondent’s notice filed and served at the leave to appeal stage, so that permission was required to rely on it at the appeal hearing, I would not have granted permission. No respondent’s notice was in fact filed or served. If Mr Debattista’s skeleton arguments were treated as a potential substitute, they came over eight months out of time with no adequate explanation for the delay. The only explanation for the late emergence of the desire to argue the points taken by the seller was Mr Debattista’s assertion without evidence, referred to further below, that the seller had been hampered in some way by financial constraints. He did not even assert that the seller had been unable to participate at the leave to appeal stage.

However, for the reasons given in paragraphs 25 to 26 above (and more fully in Appendix A), in my view no permission was required.

For completeness, I should deal with what Mr Debattista said in his skeleton arguments, in anticipation of the procedural objection being raised. He said that the seller ought not to be precluded from putting forward the full range of its substantive arguments on the s.69 appeal, firstly, because the seller’s financial position had hindered it from participating properly at the leave to appeal stage and, secondly, because “there is no legal bar to a point being raised at the challenge stage [viz., at the final hearing of an appeal for which leave has been given] which might have been raised earlier at [the] leave stage”, for which Mr Debattista cited Sharp Corp Ltd v Viterra BV [2024] UKSC 14.

The first explanation is a factual one for which there was no evidence before the court.

The second explanation is not supported by Sharp Corp v Viterra. In that case, Cockerill J dismissed an appeal against a GAFTA Appeal Award because, in her judgment, the appellant buyer had not shown that the Board of Appeal had erred in law. The Court of Appeal allowed an appeal and ordered remission to the Board of Appeal on the basis that, in its judgment, on the facts found the Board of Appeal should have concluded that the terms of the contracts in question had been varied from c&f to ex-warehouse, so the Board had erred in assessing damages by reference to a notional substitute c&f contract.

On that point, the Supreme Court allowed an appeal by the seller, holding that whether and if so how the contracts in question had been varied was not a question the Board of Appeal had been asked to determine. The Court of Appeal had therefore allowed an appeal on a question of law upon which leave to appeal had not been, and could not have been, granted. A cross-appeal by the buyer was also allowed, such that the final result was still a remission to the Board of Appeal, but not on the basis of variation.

None of that touches at all the question of what arguments are available to a respondent to a s.69 appeal, at the final hearing of the appeal, leave having been granted, either as a matter of substance (admissibility), or as a consequence of the procedural rules applicable in the appeal proceedings.