02/10/2025

Promptness as a principle: extensions of time under the Arbitration Act 1996

In African Distribution Company v AAstar Trading Pte Ltd [2025] EWHC 2428 (Comm), HHJ Tindal (sitting as a judge of the High Court) handed down a decision which will be of general interest to arbitration practitioners.

James Lamming appeared as sole counsel for the successful respondent.

Background

Disputes arose between the parties under 16 sale contracts subject to GAFTA arbitration. On 20 July 2023, the respondent (AAStar) sent a notice of arbitration to the claimant to two generic email addresses owned by the claimant (ADC), which ADC had previously used to communicate with AAStar during the performance of the sale contracts. ADC did not respond to this notice or participate in the subsequent GAFTA arbitration. An award was subsequently issued on 21 February 2024 in favour of AAStar in the sum of approximately US$3 million and sent to both parties.

On 27 August 2024, ADC brought challenges to the award under ss.67, 68 and 72(1) of the Arbitration Act 1996, all of which alleged variations on the theme that service of the notice of arbitration had been defective such that ADC had never been properly informed of the arbitration. ADC’s case was that it had been unaware of proceedings because the relevant emails were never delivered (and that, in any event, it had been inappropriate for these emails to be used to commence arbitration), and first heard of the arbitration upon being notified of subsequent enforcement proceedings in Côte d’Ivoire on 8 July 2024.

ADC further applied under s.80(5) of the Arbitration Act for a retrospective extension of the 28-day period required for its s.67 and s.68 challenges. AAStar resisted ADC’s application for an extension.

Judgment

The judge refused the extension for s.67 and s.68 applications (which were therefore struck out) on the basis that:

• ADC had failed to show sufficient risk of unfairness, or to justify its significant delay, when weighed against the fact that expedition is fundamental to the arbitral system [78].
• In particular, ADC had failed to take advice on challenging the award promptly [70].
• Its challenge was no more than arguable, even after a year of litigation [76].
• It arguably had an alternative remedy in the form of s.72(1) [44] – all of which weighed against extending time.

The judge awarded AAStar the costs of and occasioned by the extension application hearing.

Observations

This is the second significant decision on s.72 in as many months (following A&N Seaways v Allianz Bulk Carriers DMCC [2025] EWHC 2126 (Comm) on the test for non-participation).

Like A&N Seaways, this judgment is in some ways a cautionary tale: a party seeking to challenge an award will be expected to act promptly and take English legal advice when faced with an award against it, and its s.67–69 challenges may be struck out if they fail to do so.

Of particular interest to practitioners will be the judge’s obiter remarks ([39]–[44]) suggesting that s.72(1) is in fact available as remedy even after an award has been made. The judge noted that there was a divergence of judicial and textbook opinion (between Merkin and Flannery on the Arbitration Act 1996 and Russell on Arbitration) on the point. The question will be finally determined at a rolled-up hearing with the substantive s.72(1) challenge in the New Year.

If the judge’s obiter remarks are followed in the New Year, it is likely to have significant implications for how and when parties choose to put their claims under s.72. In particular, the judge’s conclusion that s.72(1) was intended to be a “free-standing, flexible [and] discretionary” remedy, which enables a party to get a more calibrated and bespoke declaration, is likely to prompt further consideration of what principles are relevant to the exercise of the court’s discretion and the appropriate terms of any bespoke declarations.

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