English Court confirms strict approach to contractual interpretation of time limits in light of the Arbitration Act

In Friedhelm Eronat v CPNC International (Chad) Ltd and Cliveden Petroleum Co. Ltd [2024] EWHC 2880 (Comm), the English Commercial Court dismissed an appeal under section 69 of the Arbitration Act 1996, emphasising the strict approach the English Courts will take to the time limits under the Act. In this case, the court held on the basis of the particular clause in question, that the time for bringing an appeal starts running from the date of the award, and not from the date the award was notified to the parties, which took place five days after the date of the award.

Background

The underlying London-seated LCIA arbitration arose under a deed of indemnity between Mr Eronat, CPNC International (Chad) Ltd (CPNC), Cliveden Petroleum Co. Ltd (Cliveden) and CITIC Energy Inc (CITIC) (the Indemnity).

The arbitral tribunal found against Mr Eronat and held that Cliveden was entitled to be indemnified for the amount claimed (the Award). The Award was dated 11 April 2024 and notified to the parties by the LCIA on 16 April 2024.

Section 69 appeal

On 16 May 2024, Mr Eronat filed an appeal against the Award under s69 of the Arbitration Act 1996 (appeal on a point of law). Although the LCIA Rules, would ordinarily exclude the right to bring a s69 appeal, clause 14.3(a) of the Indemnity set out a bespoke right of appeal in the following terms:

In the event that the arbitration tribunal has materially erred in fact and/or law, the Parties are entitled to appeal the decision of the arbitration tribunal to a court in England provided that such appeal is brought within thirty (30) days after the decision is rendered.

Cliveden and CPNC applied for reverse summary judgment under s69(1) and s69(2) on the basis that the appeal was out of time pursuant to this clause because it was not brought within 30 days of the date the Award was made (11 April 2024). 

Mr Eronat argued that time started running from the date the parties were notified of the Award, being 16 April 2024, and thus his appeal was within the time limit.

The Court's decision

Bryan J held that the date on which the "decision" was "rendered" was the date of the Award, i.e. 11 April 2024. He noted in particular that this was consistent with the use of "render" elsewhere in the arbitration clause ("The arbitration tribunal shall conduct its session and render its decision in English").

Bryan J rejected, in strong terms, Mr Eronat's argument that time should start running from the date of notification of the Award. He noted the clear distinction in both the Arbitration Act 1996 (sections 54, 55 and 70(3)) and the LCIA Rules (article 26.2) between the date an award is made and the date it is notified to the parties.  It was inherent within this framework that parties may not receive an award until part-way through (or even after) the time period for bringing an appeal. Indeed, the court noted with reference to section 56(1) of the Arbitration Act and article 26.7 of the LCIA rules that a party may choose not to pay the fees and expenses of the arbitrators.

Interestingly, the court also held that it did not have jurisdiction to extend the time period for Mr Eronat to appeal, because the arbitration clause provided that "the parties expressly waive all rights to make an application or to appeal to the English courts under the Arbitration Act, except pursuant to clause 14.3(a)".

The court granted reverse summary judgment, refused permission to appeal and gave leave to enforce the Award.

Comment

The judgment in this case evidences the strict approach the English courts will take to time limits, with the Arbitration Act considered part of the relevant background when construing these contractual clauses. The judgment is notable for the strong terms in which the court dismissed the argument that time for appealing must run from notification of the award, expressly acknowledging that where notification of the award is delayed, parties can lose the right to appeal entirely.

While the case dealt with a bespoke contractual appeal right, it nonetheless serves as an important reminder that any party wishing to challenge or appeal an award under the Arbitration Act should act promptly.

The authors would like to thank Ella Winter for their contribution to this post.