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Background
The dispute arose from a contract between a seller and a purchaser concerning the supply of crude sunflower oil. The contract was governed by the Rules of Arbitration and Appeal of the Federation of Oils, Seeds and Fats Association Limited (FOSFA).
After arbitration proceedings were initiated, the purchaser succeeded before both FOSFA’s First-tier Tribunal and its Board of Appeal, which issued its award on 26 March 2025.
FOSFA notified the parties that the award was available upon payment of fees. However, the seller, a Russian entity, experienced delays in making payment due to international sanctions, eventually completing the payment on 8 April 2025, a Saturday. The award was released to the parties the following Monday.
The High Court Appeal
The seller subsequently lodged an appeal under Section 69 of the Arbitration Act 1996, which allows a party to challenge an award on a question of law.
Under Section 70(3) of the Act, any appeal must be made within 28 days of either:
- the date of the award, or
- if there has been an arbitral process of appeal or review, the date when the appellant was notified of the result of that process.
In this case, the appeal was brought 43 days after the award was issued and 28 days after it was released. The seller applied for a declaration that the appeal had been made in time, or alternatively for an extension of time under Section 80(5) of the Act.
The purchaser applied for the appeal to be struck out on the basis that it was out of time.
The Court’s Decision
The High Court reviewed previous authorities, both of which had confirmed that the 28-day time limit runs from the date the award is issued, not from when it is released.
The Court determined that the second limb of Section 70(3) referring to an “arbitral process of appeal or review” applies only when the party is appealing or reviewing the same award within the arbitral process itself.
In this instance, the FOSFA award had already exhausted all internal appeal procedures. The only remaining avenue was a court challenge under the Arbitration Act, and therefore time began to run from 26 March 2025, the date the award was issued.
The appeal had therefore been brought out of time.
Extension of Time Refused
Although the Court accepted that the seller’s difficulty in remitting payment due to sanctions was understandable, it noted that the party had miscalculated the time remaining and failed to appreciate that only 13 days were left once the award was released.
Given that the relevant case law on Section 70(3) had been settled for over a decade, the Court concluded that the seller’s error was not “sufficiently excusable” to warrant an extension of time under Section 80(5).
The appeal was struck out, serving as a reminder that arbitration deadlines are strictly applied and procedural awareness is essential.
Key Legal Takeaways
- Time limits in arbitration are strictly enforced. Parties must be vigilant about when the clock starts running, typically from the date the award is issued.
- Sanctions and logistical challenges may be mitigating factors but will not necessarily justify delay.
- Section 70(3) of the Arbitration Act 1996 governs appeal deadlines, and Section 80(5) provides limited scope for extensions.
- Failure to act promptly may result in an appeal being struck out, even where external factors contributed to the delay.
Frequently Asked Questions
Q1: When does the 28-day period to appeal an arbitration award begin?
It generally starts from the date the award is issued, not from the date it is received or released to the parties, unless there is a further arbitral process of review within the institution’s rules.
Q2: Can the Court extend the time limit to appeal an arbitration award?
Yes, under Section 80(5) of the Arbitration Act 1996, but only in limited circumstances. The applicant must show a good reason for the delay and that the extension would not prejudice the other party.
Q3: What is Section 69 of the Arbitration Act 1996?
Section 69 allows a party to appeal to the Court on a question of law arising out of an arbitration award, subject to strict time limits and procedural requirements.
Q4: What happens if an appeal is brought out of time?
The Court will strike out the appeal unless an extension of time is granted. Courts apply this rule strictly to ensure finality and efficiency in arbitration.
Q5: How can businesses avoid missing arbitration deadlines?
Engage experienced legal counsel familiar with arbitration procedure, maintain accurate records of award dates, and act immediately once an award is issued or received.