The importance of being aware of the rules that apply to arbitration proceedings was highlighted by a recent High Court case in which an appeal against an arbitration award was struck out on the basis that it had been brought out of time.
A seller had entered into a contract with a purchaser for the supply of crude sunflower oil. The contract was subject to the Rules of Arbitration and Appeal of the Federation of Oils, Seeds and Fats Association Limited (FOSFA). A dispute arose, which was referred to FOSFA arbitration. The purchaser was successful before FOSFA’s First-tier Tribunal and subsequently its Board of Appeal, which issued its award on 26 March 2025. FOSFA notified the parties that the award was available to them upon payment.
The seller, a Russian entity, had difficulty paying the amount of the award due to sanctions and ultimately paid the outstanding balance on Saturday, 8 April. The award was released to the parties on the following Monday.
The seller appealed to the Court under Section 69 of the Arbitration Act 1996. Under Section 70(3) of the Act as it read at the time, an appeal must 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’. The appeal was brought 43 days after the date of the award and 28 days after it had been released. The seller applied to the Court for a declaration that its appeal was commenced in time, or alternatively for an extension of time under Section 80(5) of the Act. The purchaser sought an order striking out the appeal on the basis that it was out of time.
The Court noted that two previous cases had concluded that the time limit for any challenge to an appeal award must run from the date the award was issued. It found that the second limb of Section 70(3), referring to ‘any arbitral process of appeal or review’, must mean any arbitral appeal or review of the award that is intended to be the subject of the challenge under Section 69. When the award was issued, there was no available arbitral process of appeal or review – it could only be challenged by an arbitration claim to the Court under the Act – and therefore only the first limb of Section 70(3) was relevant. Time began to run from 26 March and the appeal had not been made in time.
Considering whether it should exercise its power to extend time under Section 80(5), the Court regarded the delay in remitting funds because of sanctions as excusable. However, the seller had not appreciated that, by the time the award was released, only 13 days remained. Given that the two previous cases on the running of time under Section 70(3) had both been decided well over a decade ago, the Court found it difficult to regard the seller’s error as forgivable and therefore declined to grant an extension of time. The case was struck out.
