7 Sep 2018

Arbitration challenges of any description have a poor success record. All have strict time limits and these are strictly enforced. In two recently reported cases the Courts have clarified when time starts to run from when the tribunal is asked to clarify or correct an award; and in the second case dismissed a challenge as being out of time (especially as the claim was not perceived to have any real merit).

S.70 (2) & (3) AA 1996 provide:

“(2) An application or appeal may not be brought if the applicant or appellant has not first exhausted—(a) any available arbitral process of appeal or review, and (b) any available recourse under section 57 (correction of award or additional award).”

 “(3) Any application or appeal must be brought within 28 days of the date of the award or, if there has been any arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of that process.”

In Daewoo Shipbuilding v Songa Offshore [2018] the Court addressed the issue of when time starts to run where a party seeks correction or clarification of an arbitral award as a precursor to challenging the award either under ss.67 or 68 or 69 of the AA 1996.

In summary, after a thorough analysis of the authorities, the Court held:

  • The arbitral process of correction and clarification of an award by the tribunal is not “any arbitral process of appeal or review” under s.70(3) for the purposes of the running of the 28 days.
  • Accordingly, simply applying for a correction will not, of itself, push back the start date for the running of time: the decision in Surefire Systems v Guardian ECL [2005] was wrong.
  • But where a correction or clarification must necessarily be sought in order to be able to bring the challenge to the award itself (pursuant to s.70(2)), then time runs from the date of that type of correction or clarification being made (a ‘material’ correction).
  • To give effect to that, the “date of the award” in s.70(3) is to be read as “the date of the award as corrected” by a material correction.

Please read the full article in PDF format here

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