Sucafina SA v Rotenberg

In an arbitration governed by the Arbitration Act 1996, institutional rules displace the Act’s default powers only where they expressly modify them or are inconsistent with them. A tribunal may therefore issue a partial award under section 47 unless the agreement excludes that power. An award finally determining an issue is final and binding; describing it as interim does not create a conditional category of award. A later fee-payment provision should not be construed to nullify such an award or revive an earlier inconsistent award. Where a partial award does not expressly or necessarily set aside an earlier costs award, that costs award remains enforceable.

Sucafina appealed from the Commercial Court’s decision on an arbitration governed by the Coffee Trade Federation rules. Eder J held that two appeal interim awards were binding, but that the original arbitrator’s costs award could not be made or published without an extension under section 79 of the Arbitration Act 1996, which he refused. Sucafina challenged the declaration concerning the effect of the interim awards. Mr Rotenberg cross-appealed on the refusal of an extension. The central issues were whether the interim awards were partial awards under section 47, whether Rule 52 restored the original award, and whether the original arbitration costs remained payable.

The Court of Appeal dismissed Sucafina’s appeal on the principal issue but allowed it to the limited extent that the original arbitrator’s costs and fees award remained enforceable. Aikens LJ and Lloyd LJ agreed with the judgment of the President of the Queen’s Bench Division.

1. Partial awards. The Coffee Trade Federation rules provided that the Arbitration Act 1996 applied unless expressly modified by, or inconsistent with, the rules. Sections 38 and 39 concerned agreed powers and provisional relief, whereas section 47 conferred a default power to make awards on different issues unless the parties agreed otherwise. Nothing in Rules 48 or 49, or elsewhere in the rules, excluded that power.
2. Finality. An award finally determining an issue is either final and binding or it is not. The rules did not create an intermediate category of conditionally final award. The two appeal interim awards were therefore partial awards and final and binding on the issues they determined.
3. Rule 52. Even assuming that Rule 52 applied to the later final award, its fee-payment mechanism could not restore the original award of the Umpire or render the partial awards nugatory. The rule made commercial sense when applied to the part of the original award that remained extant after earlier awards. A construction producing that result would also be inconsistent with the ordinary use of partial awards and the available powers to secure arbitral fees.
4. Costs. The first appeal interim award set aside the decision concerning the identity of the contracting parties. It did not expressly set aside the Umpire’s costs award, nor did that result follow by necessary implication. The Board had reserved costs for later consideration. The original award requiring Mr Rotenberg to pay Sucafina the specified arbitration costs and fees therefore remained in force and could be enforced.
5. Section 79. The court stated the statutory requirements for extending an agreed time limit, including exhaustion of available arbitral recourse and substantial injustice, but did not determine Mr Rotenberg’s cross-appeal on its merits because he did not pursue it after the costs issue was resolved.

1. Court of Appeal (Civil Division) — In [2012] EWCA Civ 637, the appeal was allowed only to the limited extent that the original Umpire’s costs and fees award remained enforceable.
2. High Court, Commercial Court — In [2011] EWHC 901 (Comm), Eder J held that the two appeal interim awards were binding but refused an extension under section 79 and held that the arbitration costs could not be recovered.