Daewoo Shipbuilding & Marine Engineering Company Ltd v Songa Offshore Equinox Ltd & Anor

Under the Arbitration Act 1996, correcting an award does not automatically restart the 28-day period for a court challenge. Time is postponed only where the correction is material to the proposed challenge and is necessary to determine whether grounds exist. Trivial clerical corrections leave time running from the original award. The statutory scheme distinguishes correction by the original tribunal from an arbitral appeal or review by another body. Extensions are exceptional and require consideration of delay, reasonableness, responsibility, prejudice, progress, merits and fairness, with speed and finality carrying primary weight.

The claimant sought permission under section 69 of the Arbitration Act 1996 to appeal two arbitration awards concerning the construction of turnkey contracts for drilling rigs. The awards were issued on 18 July 2017. The tribunal later corrected minor clerical errors on 14 August 2017. The claimant issued its arbitration claim form on 8 September 2017, after the 28-day period from the awards had expired.

The defendants applied to strike out or summarily dismiss the section 69 application. The claimant sought a retrospective extension of time under section 80(5). The central issues were whether time ran from the original awards or the memoranda of correction, and, if the application was late, whether the interests of justice required an extension.

The extension application was refused and the section 69 application was dismissed.

1. Statutory construction. Sections 70(2) and 70(3) distinguish an arbitral process of appeal or review from recourse under section 57. The former ordinarily involves review by another arbitral body. Correction by the tribunal that made the award is not an arbitral appeal or review. The court followed the reasoning in K v S [2015] EWHC 1945 (Comm) and Price v Carter [2010] EWHC 1451 (TCC), and disapproved the contrary approach in Surefire Systems Limited v Guardian ECL Limited [2005] EWHC 1860 (TCC).
2. Material corrections. The 28-day period normally runs from the original award. An immaterial correction, such as an unrelated typographical error, does not alter that date. The court nevertheless endorsed the materiality approach in K v S and Essar Oilfields Services Ltd v Norscot Management Pvt Ltd [2016] EWHC 2361 (Comm): where a correction is necessary to enable a party to know whether it has grounds to challenge, time runs from the corrected award. Unaffected and severable parts may retain the original date.
3. Extension of time. Applying Terna Bahrain Holding Company WLL v Bin Kamil Al Shamsi [2012] EWHC 3283 (Comm), the court treated the delay, the absence of a reasonable explanation, and the lack of responsibility on the defendants or tribunal as primary factors. The absence of irremediable prejudice was not decisive. The merits were neither obviously strong nor intrinsically weak, and broad fairness did not overcome the statutory policy of speedy finality.
4. The 24-day delay was substantial against the statutory 28-day yardstick. The clerical corrections were wholly unrelated to the proposed appeal. The extension was therefore refused under section 80(5), and the section 69 application was dismissed. Costs were prima facie to follow the event.