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When can an applicant that took no part in the arbitral proceedings challenge an arbitration award?

04 October 2013
The Commercial Court has just given further guidance in The London Steam Ship Owners Mutual Insurance Assocn v Kingdom of Spain [2013] EWCA 2840.

The claimant commenced arbitration in England but the respondent contested the jurisdiction of the tribunal and refused to take part. The claimant obtained an award in its favour and sought enforcement in England. The respondent applied to court seeking to challenge the award under sections 72 and/or 67 of the Arbitration Act 1996. The section 67 challenge was out of time and the respondent sought an extension of time.

The Commercial Court allowed the extension, holding that it would be in the interests of justice to grant such extensions as would be necessary to ensure the respondent could deploy its full armoury of objections to the award. Walker J applied the principle identified in Dallah Real Estate v Pakistan that a person who denied being party to any relevant arbitration agreement had no obligation to participate in the arbitration or take any steps in what he maintained to be an invalid arbitration. It was concluded that those who choose not to participate in arbitral proceedings are entitled to await an application to enforce before challenging the award. The court also provided guidance on appeals under section 69, stating that such appeals were only available if the appellant had waived its objection to jurisdiction or the objection had failed.

The judgment is a useful restatement of the principle in Dallah and confirms that the courts in England will respect a non-participating party's right to object to jurisdiction at the enforcement stage. However, this should not be seen as encouragement for recalcitrant parties to seek to evade a final award. Any challenge to enforcement is subject to a strict 28 day deadline. As illustrated by the judgment, this will not be extended without good reason, to ensure that enforcement cannot be unduly delayed.

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