Autoridad Del Canal De Panama v Sacyr, S.A & Ors

An appeal should not be permitted unless it passes the threshold in CPR Part 52.6. Where a defendant seeks a stay under section 9 of the Arbitration Act 1996, filing a defence under a court order, expressly reserving the right to pursue an appeal, does not necessarily amount to a step affirming the court proceedings or deprive the court of jurisdiction to grant a stay. Case management should balance the pending appeal against the need to progress commercial claims. The court may require limited pleadings while postponing substantive determination until the appeal position is clear.

The claimant brought proceedings on advance payment guarantees governed by English law and subject to the exclusive jurisdiction of the English court. In an earlier judgment, the court held that the guarantees were not first-demand instruments, refused a stay under section 9(1) of the Arbitration Act 1996, and declined to order a case management stay at that stage. The defendants sought permission to appeal the refusal of the section 9 stay and a stay of the English proceedings pending permission or appeal. The court also addressed costs and the procedural steps required while the appellate position remained unresolved.

1. Permission to appeal. The defendants’ application failed to satisfy either limb of CPR Part 52.6. Permission was therefore refused. The court recognised that the case raised an issue without a precise authority on the interaction between an exclusive jurisdiction clause and a section 9 stay, but held that any wider review was for the Court of Appeal.
2. Section 9(3). Section 9 forms part of a statutory code governing disputes within arbitration agreements. The relevant question is whether the defendant has taken a step which impliedly affirms the court proceedings and willingness to have the dispute determined by the court rather than arbitration. Filing a defence pursuant to a valid court order, while pursuing an appeal against the refusal of a section 9 stay, does not demonstrate that intention. The defence may contain an appropriate reservation. It follows that filing the defence would not deprive the court of jurisdiction under section 9(3).
3. Case management. The defendants were required to file defences without prejudice to their appeal by 21 November 2017. The defences need not address the detailed underlying contractual disputes. The immediate issue was the more limited question whether liability under the guarantees depended upon resolution of those disputes. A case management conference was to take place thereafter. The claim could be listed, but the court would not determine it before resolution of any appeal for which permission was granted.
4. Costs. The claimant was awarded two-thirds of its application costs, assessed on the standard basis, together with a payment on account of USD 300,000. The indemnity provisions in the guarantees did not extend to the claimant’s unsuccessful attempt to enforce them. The court also directed consequential costs for agreed amendments.

The judgment records an earlier first-instance decision on the guarantees and stay applications: [2017] EWHC 228 (Comm). Permission to appeal that decision was refused in this judgment. The defendants remained entitled to seek permission from the Court of Appeal.