A Ltd v B Ltd
June 11, 2014
COMMERCIAL COURT
United Kingdom
CORAM
- MR JUSTICE ANDREW SMITH
Areas of Law
- Alternative dispute resolution
- Civil Procedure
June 11, 2014
COMMERCIAL COURT
United Kingdom
CORAM
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Judgment
Mr Justice Andrew Smith:
This case raises a question about the claimants’ right to bring proceedings under sections 67 and 68 of the Arbitration Act 1996 (the “1996 Act”). The facts are not in dispute and straightforward. In order to preserve their anonymity, I shall refer to the claimants as “A” and the defendants as “B”, and say that they both are overseas trading companies. B claim that A made two contracts to buy cotton from them and have not made payment under them. They contend that the contracts provided for “ICA rules and arbitration” (ICA referring, of course, to the International Cotton Association Limited), and on 8 February 2012 they brought a reference under the Bylaws of the ICA claiming nearly seven and a half million dollars. A deny making the contracts, and so deny having agreed to ICA (or any) arbitration. They participated in the arbitration proceedings and disputed the Tribunal’s jurisdiction.
In an award dated 26 February 2013 (the “Award”) the Tribunal concluded that it had jurisdiction to decide the reference and upheld the claim. Under the relevant ICA rules, the 2011 edition, parties have a right to appeal to a so-called Technical Appeal Committee (“TAC”). Bylaw 312(9) provides under the heading “Technical Appeal Committee” as follows:
“An appeal involves a new hearing of the dispute and the appeal committee can allow new evidence to be put forward. It may confirm, vary, amend or set aside the award of the first tribunal and make a new award covering all of the matters in dispute.”
Bylaw 311 is headed “Appeals” and provides as follows:
“1. If either party disagrees with the tribunal’s Award, it can appeal to us within the period specified in the Award. It must send Notice of Appeal to us.
Upon receipt of the Notice of Appeal we may demand that sums of money be deposited with us by the Appellant, by way of deposit against any fees, costs or expenses in connection with or arising out of the Appeal. Failure to pay within the specified period will result in the Appeal being dismissed.
The Directors, or appeal committee if appointed, can extend the time limits in Paragraph 2 above, but only if the firm concerned can show that substantial injustice would otherwise be done and the request for an extension is reasonable in all the circumstances. An extension will only be granted if it can be shown that substantial injustice may result of a request for an extension of time is refused …”
The period specified in the Award wa
AI Generated Summary
Mr Justice Andrew Smith determined a preliminary procedural issue arising from anonymized parties A and B in the context of ICA arbitration. B alleged A entered two cotton purchase contracts and failed to pay; A denied contract formation and any agreement to ICA arbitration, yet participated and challenged jurisdiction. The ICA tribunal issued an award on 26 February 2013 upholding B’s claim and finding jurisdiction. Under ICA’s 2011 rules, appeals go to a Technical Appeal Committee (TAC). A noticed an appeal but failed to pay demanded fees and deposit by 23 April 2013; the ICA dismissed the appeal on 24 April. A then paid and sought an extension; the ICA refused, and no TAC was appointed. In court A sought to set aside or declare the award of no effect under sections 67 and 68. The judge held that the TAC appeal is an “available arbitral process,” that exhaustion is fact-specific and was achieved only upon refusal of A’s extension request, and that section 73(2) (waiver) did not bar A’s challenge.