Rollitt (t/a CD Consult) v Ballard

Extensions of time for challenging an arbitration award are exceptional. The applicant must explain the delay, and delay measured against the statutory 28-day period is significant. The court will consider the length and reasons for delay, responsibility for it, prejudice, the continuation of the arbitration, the apparent strength of the challenge and overall fairness. The first three factors are primary.

Permission to appeal under Arbitration Act 1996, section 69, requires satisfaction of each statutory condition. A challenge based on factual or mixed questions is outside the proper scope of an appeal on a question of law. A serious-irregularity challenge under section 68 has a high threshold and requires both serious irregularity and substantial injustice.

The claimant applied on paper for an extension of time to challenge an arbitrator’s preliminary award, permission to appeal on points of law, permission to rely on further grounds and evidence, and permission to amend the claim to challenge a later costs award for serious irregularity.

The 28-day period for challenging the preliminary award expired on 9 June 2016. The award was not released until 8 August 2016 because the arbitrator exercised a lien pending payment of his fees. The claimant issued proceedings on 5 September 2016, 88 days after expiry of the statutory period. The later Costs Award was issued on 24 October 2016.

The central issues were whether time should be extended under section 79(1) of the Arbitration Act 1996, whether permission to appeal should be granted under section 69, and whether the proposed serious-irregularity challenge to the Costs Award was properly arguable.

1. Extension of time. The application to rely on further grounds and evidence was granted, but the extension itself was refused. The 88-day delay was substantial when measured against the statutory 28-day period. The claimant was responsible for ensuring that the award was taken up in time to preserve any right of challenge. The arbitrator was entitled to retain the award pending payment under section 56 of the Arbitration Act 1996. Payment by post and the period of almost one month after release of the award were not reasonably explained.
2. The applicable factors were the length of delay, the reasonableness of the applicant’s conduct, any contribution by the respondent or arbitrator, irremediable prejudice, the continuation and cost of the arbitration, the apparent strength of the challenge, and overall fairness. The first three were primary. The merits would not normally be investigated substantially, but an intrinsically weak or apparently strong challenge could be relevant.
3. Permission to appeal. Even if the application had been timely, permission under section 69 was refused. The proposed arguments concerning incorporation of the arbitration agreement and the alleged tiered dispute-resolution procedure appeared strong and involved questions the arbitrator had been asked to determine. However, the challenge concerning the consumer issue involved findings of fact and mixed fact and law, rather than an appealable question of law. Further, success on the first two issues could not affect jurisdiction because the finding that the arbitration agreement was invalid under the consumer legislation would remain decisive. The statutory requirement that the determination substantially affect the parties’ rights was therefore not met.
4. Costs Award. Permission to amend the claim to challenge the Costs Award under section 68(2)(a) was refused. The statutory test requires breach of the tribunal’s general duty under section 33, serious irregularity and substantial injustice. The threshold is deliberately high. The arbitrator had power to determine costs, had allowed both parties to make submissions, and was entitled to decide whether to proceed before the court challenge was determined. There was no procedural unfairness, and in any event no substantial injustice resulted because the challenge to the preliminary award failed.
5. The extension of time, permission to appeal and permission to amend were refused. The proposed serious-irregularity challenge was not properly arguable and had no real prospect of success.

First-instance paper application determined by the High Court, Technology and Construction Court. The judgment does not state any prior court decision in the same proceedings.