PEC Ltd v Asia Golden Rice Company Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Hamblen |
| Judgment Date | 17 October 2012 |
| Neutral Citation | [2012] EWHC 846 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 17 October 2012 |
[2012] EWHC 846 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building Fetter Lane, London, EC4A 1NL
Mr Justice Hamblen
Brian Dye (instructed by Zaiwalla & Co solicitors) for the Applicant
Michael Collett and Charlotte Tan (instructed by Clyde & Co solicitors) for the Respondent
Hearing dates: 12 October 2012
Introduction
This is an application by the Applicant ("PEC") for an order extending PEC's time for making any application challenging the jurisdiction of the tribunal under section 67 of the Arbitration Act 1996 ("the 1996 Act") until 28 days after the determination of the appeal in the GAFTA arbitration between the parties.
The application arises in connection with a disputed contract for the sale by the Respondent ("AGR") to PEC of 25,000 mt of Thai Rice which, on AGR's case, was concluded in May 2008 but was not performed by PEC.
By an award dated 2 July 2012 ("the Award") a GAFTA tribunal (consisting of Mr Graham Perry, Mr Charles Debattista and Mr Kevin Haylock) held that:
(1) A contract was concluded on 15 May 2008.
(2) The contract concluded incorporated the GAFTA 125 Arbitration Rules.
(3) The tribunal had jurisdiction to hear the dispute.
(4) The contract concerned a tonnage of 25,000 mt.
(5) PEC was to pay AGR US$6,250,000 plus interest, fees and costs.
PEC has made an appeal to the GAFTA Appeal Board which is due to be heard between 14 and 16 January 2013. The appeal does not relate to the issue of jurisdiction since under GAFTA Rules there is no appeal from a decision that the first tier tribunal has jurisdiction.
It was PEC's primary submission that no extension of time is required for making any application under section 67 of the 1996 Act, on the grounds that time would only run under section 70(2) of the 1996 Act from the date of the GAFTA Appeal Award.
If, contrary to its primary case, the section 70(2) time limit runs from the date of the Award (2 July 2012), PEC seeks an extension of time pursuant to section 80(5) of the 1996 Act and CPR 62.9.
AGR's position was as follows:
(1) The time for making an application under section 67 of the 1996 Act has expired. If PEC wishes to make such an application, it requires an extension from the Court.
(2) It is a matter for the Court whether it is prepared to grant such an extension on the basis of PEC's evidence.
It was ultimately agreed between the parties that the Court had jurisdiction to grant an extension of time and should grant such an extension, with further directions also being agreed.
However, since the Court has itself to be so satisfied and the present case indicates that there is some uncertainty as to the legal position I shall briefly set out my reasons for so concluding.
The GAFTA Rules
The GAFTA 125 Arbitration Rules provide so far as material as follows:
" 8. ISSUES OF SUBSTANTIVE JURISDICTION, PROVISIONAL ORDERS AND AWARDS ON DIFFERENT ASPECTS
8.1 Issues of Substantive Jurisdiction
(a) The tribunal may rule on its own jurisdiction, that is, as to whether there is a valid arbitration agreement, whether the tribunal is properly constituted and what matters have been submitted to arbitration in accordance with the arbitration agreement.
(b) In the event that the tribunal determines it has no jurisdiction, GAFTA will notify the parties of the tribunal's decision. Such decision shall be final and binding upon the parties subject to any right of appeal to a board of appeal pursuant to Rule 10. … In the event that the tribunal determines that it has jurisdiction, no appeal shall lie to a board of appeal.
…
9. AWARDS OF ARBITRATION
…
9.4 Subject to any right of appeal pursuant to Rule 10 awards of arbitration shall be conclusive and binding on the parties with respect both to the matters in dispute and as to costs.
…
10. RIGHT OF APPEAL
10.1 Save as provided in Rules 6.4, 8.1(b), 8.2, 19 and 21, either party may appeal against an award to a board of appeal provided that the following conditions are complied with: —…
12. APPEAL PROCEDURE
…
12.6 The award of the board of appeal … shall be final, conclusive and binding."
The 1996 Act provides so far as material as follows:
" 67.—Challenging the award: substantive jurisdiction.
(1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court—
(a) challenging any award of the arbitral tribunal as to its substantive jurisdiction; or
(b) for an order declaring an award made by the tribunal on the merits to be of no effect, in whole or in part, because the tribunal did not have substantive jurisdiction.
A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3).
(2) The arbitral tribunal may continue the arbitral proceedings and make a further award while an application to the court under this section is pending in relation to an award as to jurisdiction.
…
70.—Challenge or appeal: supplementary provisions.
(1) The following provisions apply to an application or appeal under section 67, 68 or 69.
(2) An application or appeal may not be brought if the applicant or appellant has not first exhausted—
(a) any available arbitral process of appeal or review, and
(b) any available recourse under section 57 (correction of award or additional award).
(3) Any application or appeal must be brought within 28 days of the date of the award or, if there has been any arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of that process.
…
73.—Loss of right to object.
…
(2) Where the arbitral tribunal rules that it has substantive jurisdiction and a party to arbitral proceedings who could have questioned that ruling—
(a) by...
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A. Ltd v B. Ltd
...cases, it is the date of the award, or appeal award, as the case may be, which starts time counting." 9 On the other hand, in PEC Ltd v Asia Golden Rice Pte Ltd, [2012] EWHC 846 (Comm) Hamblen J said at para 18: "It is not necessary to decide this issue in the present case. However, I cons......