This recent decision by Foxton J (1) establishes that the appointment of an arbitrator by the Respondent on the last day of a 14-day time period and that the arbitrator’s unconditional acceptance and notification thereof to the Claimant is sufficient to comply with the arbitration clause in the BARECON 2001 form and thus to avoid the default situation whereby the Claimant’s arbitrator becomes the sole arbitrator.
Those interested in the legal principles should refer to paragraphs 14 to 23 of the judgment which deal with the various cases on what would constitute an “appointment” within the context of clause 30(a). The submission that an appointment required a binding contract between the appointing party and its arbitrator was rejected by the judge as being contrary to the established legal principles set out by the judge at paragraph 13 of his judgment (such principles applying equally to appointments under section 14 of the Arbitration Act 1996).
The takeaway point from this is that the contract between the appointing party and its chosen arbitrator is not relevant unless the arbitrator concerned makes his or her appointment conditional on certain terms being agreed. In this case, no conditional terms were communicated at the time of the arbitrator’s acceptance. It was held that the acceptance was valid and notification thereof was in compliance with the clause, notwithstanding that a dispute later arose as to the terms on which the arbitrator would be remunerated.
Of course, there are lessons to be learned here, not least so as to avoid a day’s hearing in the Commercial Court with four barristers and two sets of law firms in attendance and all the attendant costs exposure. The main lesson is to treat the time limits seriously and not to leave things to the last minute. It is open to the parties to agree to extend the time limits to appoint the Tribunal but, failing that, it is wise to take steps to approach suitable arbitrators in sufficient time to enable them to confirm that they are free to act and to agree the terms upon which they are prepared to act. If that had been done in this case, then this hearing could have been avoided.
- ARI v WXJ [2022] EWHC 1543 (Comm)
Nick Burgess
Partner
Elli Marnerou
Associate
