CMA CGM SA v Beteiligungs-KG MS Northern Pioneer Schiffahrtsgesellschaft mbH & Co

Under section 69 of the Arbitration Act 1996, permission to appeal from an arbitral award depends on cumulative statutory criteria. The question must have been put to the tribunal, satisfy the applicable threshold of obvious error or general public importance and serious doubt, substantially affect rights, and make court determination just and proper. A faintly argued issue may still have been determined by the tribunal. In a time charter, a termination right normally must be exercised promptly. Continued performance beyond a reasonable period will ordinarily support election, waiver or estoppel, producing the same result as an implied term. The statutory threshold is broader than the former Nema guideline requiring a strong prima facie case. The appeal was dismissed because the delay made the juridical dispute immaterial and the arbitrators’ conclusion was not open to serious doubt.

Four owners chartered container vessels under NYPE time charters containing a war cancellation clause. The charterers purported to cancel after Germany participated in the Kosovo military operation. The arbitrators held the cancellations invalid, including because any cancellation right had not been exercised within a reasonable time. Tomlinson J refused permission to appeal the award under section 69 of the Arbitration Act 1996, but granted permission to appeal his refusal to the Court of Appeal. The issues concerned the statutory criteria for permission, whether the implied-term question had been put to the arbitrators, and whether the time issue made the other legal questions immaterial.

Appeal dismissed. The Court of Appeal treated its task under section 69(6) of the Arbitration Act 1996 as essentially supervisory.

1. Permission to appeal to the Court of Appeal. The principles stated in Antaios Compania SA v Salen AB (the Antaios) [1985] AC 191 continued to apply, subject to the fact that the criteria were now statutory. Permission to appeal from a judge’s decision on permission to appeal should be confined to cases requiring elucidation of the statutory criteria or their application. It should not be granted to relax the statutory restrictions.
2. Scope of review. The task was judicial review. Questions of law could be reviewed, but findings of fact and exercises of discretion were subject to the Wednesbury standard, as described in Edwards v Bairstow [1956] AC 14 and Wednesbury [1948] 1 KB 223.
3. Question put to the tribunal. The arbitrators had been asked to determine whether cancellation had to occur within a reasonable time. The issue had been raised in submissions, even though faintly. The absence of fuller argument about election, waiver and estoppel did not itself engage section 69(3)(b). Nevertheless, possible remittal for unresolved alternative issues supported refusal under section 69(3)(d).
4. Reasonable time. A time charter is a joint adventure. Business efficacy normally requires a termination right to be exercised promptly. Continued performance or use beyond the time reasonably required to react to the triggering circumstances will ordinarily indicate that the right is not being exercised. Election, waiver and estoppel will normally produce the same result as an implied term requiring prompt exercise. The arbitrators’ reliance on KKKK v Belships Co (1939) 63 L1.l.Rep 175 was not obviously wrong.
5. A delay of more than a month was inconsistent with an intention to cancel. The juridical basis of the reasonable-time requirement therefore did not affect the result, and the issue neither substantially affected the parties’ rights nor raised a question of general public importance. The construction issue was not decided because it had become academic. The Court added, obiter, that section 69(3)(c)(ii) imposed a broader threshold than the former Nema guideline and that disagreement among experienced arbitrators could establish serious doubt where the issue remained material. There was no order as to costs.

1. Court of Appeal: Considered the appeal under section 69(6) of the Arbitration Act 1996 and dismissed it. No order as to costs.
2. Queen’s Bench Division, Commercial Court: Tomlinson J refused permission to appeal the arbitral award under section 69, but granted permission to appeal his refusal to the Court of Appeal.
3. Arbitration: Three arbitrators held that the charterers’ purported cancellations were invalid, including because any cancellation right had not been exercised within a reasonable time.