Unhappy With an Arbitration Decision? Don't Delay Your Appeal In the interests of swift dispute resolution, contract arbitration
22nd May 2018Back to articles
In the interests of swift dispute resolution, contract arbitrations are subject to strict time limits at every stage and any failure to comply with them can have disastrous consequences.
That was certainly so in one case in which a shipbuilding company lost the opportunity to challenge an arbitration panel's award after delaying too long in lodging an appeal to the High Court.
The dispute concerned high value contracts to build two semi-submersible drilling rigs for use in the Norwegian offshore oil fields. The builder of the rigs and their buyer each blamed the other for cost and time overruns. Following a preliminary hearing, the panel found against the builder on two important issues relating to the interpretation of the contracts.
The builder subsequently lodged an appeal under Section 69 of the Arbitration Act 1996 against the panel's award. It was accepted that the appeal had been launched more than 28 days after the panel's award was issued, the time limit specified by Section 70(3) of the Act. However, the builder submitted that time had only started to run after the panel corrected certain errors in the award and that the appeal was therefore in time.
In ruling on the matter, the Court acknowledged that it would be acceptable to postpone the running of the 28-day deadline in circumstances where corrections to an award were substantive and necessary to enable the parties to understand it. In rejecting the builder's arguments, however, the Court noted that the relevant errors in this case were of a purely clerical and typographical variety. In those circumstances, there was no good reason for extending the deadline.
Also refusing to exercise its discretion to extend time, the Court noted that the builder had provided no satisfactory explanation for the substantial delay of 24 days in lodging its appeal. The builder had not acted reasonably and the alleged lack of prejudice suffered by the buyer did not by itself justify extending the deadline. In the circumstances, the builder's appeal was summarily dismissed.
Paul Walshe, Litigation Solicitor says "The moral of the story is to act promptly as soon as any dispute arises and to make sure you comply with the arbitration procedures in full. Failure to do so may mean the loss of the chance to fight your corner."
For information and advice contact us at any of our offices below:
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