16/11/2021

511-day extension granted to 28-day statutory time limit for bringing challenges to arbitral awards

Minister of Finance (Incorporated) and another v International Petroleum Investment Co and another [2021] EWHC 2949 (Comm)

 

In what he termed an ‘unusual and special case’ Mr Justice Baker in the Commercial Court granted the extension of time required by the claimants for bringing a serious irregularity arbitration claim under section 68(2) of the Arbitration Act 1996 (AA 1996). This meant allowing the challenge to be brought some 511 days late as opposed to the usual 28 days limit. The court conceded that this was an exceptional length of extension to grant but described it as ‘an exceptional decision to meet the justice of an exceptional case’.

What are the practical implications of this case?

The time limit of 28 days from the date of any arbitral award (or the date the parties are notified of the result of any tribunal process of appeal of review) for challenging that same award, as fixed under AA 1996, s 70(3), is notoriously tight and is generally strictly enforced by the English courts.

This decision provides a relatively rare example of willingness on the part of the court to exercise an unusually high degree of flexibility and to grant a sizeable extension to an already expired time limit. Although the judge repeatedly stressed the unusual and exceptional nature of the case, undoubtedly this decision will provide fresh impetus and hope to those parties who may simply assume they are time barred under AA 1996, s 70(3) and thereby automatically locked out from challenging arbitral awards, whether final, interim or consent in nature.

The decision is to be welcomed for applying a common sense and practical approach to a statutory time limit which can often operate in an unduly harsh way. This is particularly so in circumstances when, for example, successful parties deliberately stall the payment of arbitral fees in order to delay the parties’ receipt of an award, thereby diminishing further the time window available to then challenge that same award. The exceptionally lengthy extension granted by the court in this case allowed the claimants to proceed with their serious irregularity challenge to a consent award (the Consent Award)—issued by a tribunal appointed under the London Court of International Arbitration Arbitration Rules, made pursuant to AA 1996, s 68(2)(g).

Colleen Hanley takes a closer look at the case in question.

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This article was first published by Lexis®PSL on 08/11/2021.