Sumukan Ltd v The Commonwealth Secretariat

Section 69 of the Arbitration Act 1996 permits parties to exclude the statutory right of appeal on a question of law by incorporating an exclusion agreement by reference. The agreement need not spell out the exclusion in the arbitration clause itself. The ordinary question is whether reasonable notice of the incorporated term was given in the circumstances. The fact that a contracting party is a public authority does not impose a higher threshold. An agreed restriction, or complete exclusion, of court supervision under section 69 is compatible with Article 6 of the European Convention on Human Rights. Parties may choose arbitration, privacy and finality instead of subsequent court supervision, and cannot invoke Article 6 to avoid that freely agreed arrangement.

Asset Management Shop Ltd’s successor applied under section 69 of the Arbitration Act 1996 for permission to appeal an award of the Commonwealth Secretariat Arbitration Tribunal concerning ownership of a prototype website.

The contract incorporated the Statute of the Arbitral Tribunal of the Commonwealth Secretariat. Article IX.2 stated that the Tribunal’s judgment was final and binding and constituted an exclusion agreement. The respondent argued that incorporation by reference was sufficient to exclude the court’s section 69 jurisdiction. The applicant argued that an express reference to the exclusion was required, particularly because the respondent was a public authority and Article 6 of the Convention was engaged.

1. The application for permission to appeal was dismissed because the court had no jurisdiction to entertain it. Article IX.2 of the Commonwealth Secretariat Tribunal’s Statute was an effective and enforceable exclusion agreement.

2. Section 69(1) of the Arbitration Act 1996 begins with the words “unless otherwise agreed by the parties”. Those words permit an exclusion agreement incorporated by reference. The agreement need not be set out expressly on the face of the arbitration clause.

3. The relevant approach is ordinary contractual construction. An exclusion term may be incorporated by reference where reasonable notice has been given in all the circumstances. The exclusion of section 69 jurisdiction concerns ancillary dispute-resolution machinery rather than substantive contractual rights, and does not require a particularly high threshold of notice.

4. The reasoning in Arab African Energy Corporation v Oliproduckten Nederland [1983] 2 Lloyd’s 419 and Marine Contractors v Shell Petroleum Development of Nigeria [1984] 2 Lloyd’s Rep 77 supported this conclusion. The policy of English arbitration law favours finality and party autonomy, while preserving only the restricted supervisory regime created by section 69.

5. Article 6 did not require a special method of communicating an agreement excluding the right of appeal. Parties may agree to arbitration and thereby waive a public court hearing, and may also agree to exclude the restricted section 69 appeal facility. That consensual choice is compatible with the Convention whether or not one party is a public authority.

6. The interpretative obligation under section 3 of the Human Rights Act 1998 was not engaged. There was no Convention incompatibility requiring section 69(1) to be given a special meaning.

First-instance decision. No prior appellate decision is stated in the judgment.