22/08/2025

High Court dismisses claim in Seaways charter case, highlights four ‘must-haves’ for arbitration challenges

In A&N Seaways v Allianz Bulk Carriers DMCC [2025] EWHC 2126 (Comm), HHJ Baumgartner (sitting as a judge of the High Court) handed down a decision of general interest to arbitration practitioners. The judgment canvassed the relevant legal principles on: (i) whether a party “takes no part in proceedings” pursuant to s.72 Arbitration Act 1996; (ii) amending an arbitration claim form out of time; (iii) pleading fraud; and (iv) indemnity costs where allegations of fraud have failed.

The judge dismissed the appellant charterers’ application to amend their s.72(2) claim to include fraud allegations and struck out their original claim, ordering them to pay owners’ costs on an indemnity basis.

James Lamming appeared unled for the successful owners.

Background

The parties entered into a trip-time charterparty for the vessel MV “Bharadwaj”. Several months into the charterparty, a dispute arose concerning non-payment of hire, leading the owners to withdraw the vessel and subsequently commence arbitration.

The charterers served an interim response on the owners, alleging that in fact the charterparty had been procured by fraud between one of their directors and the owners and that the charterers had been unaware of it. The charterers further applied for and received an extension of time from the arbitrator in which to file submissions, but ultimately elected not do so and did not participate further in the arbitration. The arbitrator subsequently issued an award in favour of the owners.

On the 28th day following issuance of the award, the charterers issued a claim form seeking to challenge the award under s.72(2)(a) of the Arbitration Act 1996. No evidence was filed alongside the claim form, nor was fraud pleaded. The owners applied to strike out the claim. The charterers resisted strike-out, subsequently providing a witness statement alleging far-reaching fraud. The owners maintained their strike-out application, inter alia on the basis that the allegations of fraud could not be maintained unless they were pleaded, and any fresh application to challenge the award would be out of time.

The charterers applied to amend their pleadings to allege fraud.

The judgment

HHJ Baumgartner refused permission to amend on the basis that:

• The alleged fraud was a fresh ground of challenge to the award, and was made well outside the 28-day period for challenges. The allegation was not a new one and there was no good reason why it had not been pleaded from the outset [25]–[41].
• The primary facts relied on by the charterers in their draft particulars did not support a pleading of fraud: indeed, they were more consistent with honesty than dishonesty [42]–[52].
• The fraud allegations showed no real prospect of success [53]–[57].

Of particular interest to practitioners will be the judge’s useful four-part summary at [28] of what a challenge to an arbitration award must contain.

The judge proceeded, on the owners’ application, to strike out the unamended claim on two individually sufficient bases.

• First, the charterers’ application to the tribunal for an extension of time to file submissions constituted “taking part in” the arbitration proceedings, disqualifying them from challenging the award under s.72 [64]–[76].
• Second, the unamended application showed no real prospect of success [77]–[82]. There was no realistic prospect (and no good evidence had been provided) of the charterers showing that the owners should have been aware of the alleged lack of authority of Mr Puria, the charterer’s director alleged to have acted fraudulently.

Observations

This case serves as a fine example of the courts’ robust approach in support of English-seated arbitration and a caution against late or “speculative, weak” challenges. Three specific points emerge.

1. Parties who seek to challenge an award are expected to put forward their entire challenge within 28 days of the award, complete with particularisation and supporting evidence, rather than piecemeal throughout proceedings [28]. Parties cannot speculatively enter a protective in-time claim form to anchor further claims they might wish to bring.
2. Allegations of fraud must be pleaded and evidenced squarely and precisely. The court will be prompt to weed out those which are not and make appropriate costs orders to reflect this. The order of indemnity costs here reflected the fact that the charterers’ conduct throughout the court proceedings had been chaotic, and the amendment application itself: “speculative, weak, opportunistic [and] thin” [85(2)].
3. Parties must “choose a lane” on participation in arbitration proceedings. If a party wishes to preserve its s.72 rights, it must elect really to snub the tribunal and refuse to participate at all. It cannot do what the charterers did in this case and adopt a halfway-house approach of seeking, by way of application, to alter the tribunal’s timetable and then subsequently to resile from that application.

James was instructed by Simon Johnson and Alex Ferrigno of MFB Solicitors.