Key takeaways
Time starts from award date, not notification
Court confirms strict interpretation under Arbitration Act.
Late challenges risk being shut out completely
Failure to act promptly leaves no room for appeal.
Extensions are rare and hard to justify
Courts expect diligence despite practical payment delays.
JSC “Kazan Oil Plant” -v- Aves Trade DMCC [2025] EWHC 2713 (Comm)
In a dispute arising out of a contract for the sale and purchase of crude sunflower oil that was subject to the FOSFA rules of arbitration and appeal, there was a difference of opinion between the parties on whether the 28-day statutory time period for appealing an arbitral appeal award started running from the date of the award, or the date the parties were notified of the result of the appeal process.
The Court has found that time started running from the date of the award. This reflected the reasoning behind the relevant statutory provision (s.70(3) of the Arbitration Act 1996), namely that the date of the award was the only incontrovertible date from which the time period should run. Any other starting point would result in great uncertainty and any difficulties arising from specific circumstances could be easily remedied by way of an extension of time.
The background facts
The dispute which arose related to a contract dated 13 August 2020 between JSC “Kazan Oil Plant” (as Seller) and Aves Trade DMCC (as Buyer) in respect of 48,000 mt 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).
The dispute was referred to FOSFA arbitration. The FOSFA first-tier tribunal issued its award in favour of the Buyer on 27 March 2024 (FTT Award). The Seller served notice of appeal under the FOSFA Rules and its appeal against the FTT Award was referred to the FOSFA Board of Appeal.
An oral FOSFA appeal hearing took place in London on 16 and 17 December 2024. The FOSFA Board of Appeal issued its Arbitration Appeal Award dated 26 March 2025 (Appeal Award). The fact that the Appeal Award was available was notified to the parties on that same date, by an email from FOSFA to the Seller (being the claimant/appellant in the arbitration proceedings), copied to the Buyer. That email indicated the amount of outstanding fees, costs and expenses and called upon the Seller, as appellant, to pay the outstanding balance and take up the Appeal Award. The email also stated that, upon receipt of payment, the Appeal Award would be released to the parties.
The Seller is a Russian entity. It encountered difficulties in paying for the Appeal Award due to sanctions. Ultimately, payment was made by an intermediary in the UAE via a transfer on 8 April 2025 – a Saturday. The Appeal Award was released by FOSFA and received by the Seller on the following Monday, 10 April 2025.
On 8 May 2025, the Seller issued an arbitration claim form, seeking to appeal the Appeal Award pursuant to s.69 Arbitration Act 1996 (the 1996 Act) on a point of law. This was 43 days after the date of the Appeal Award; and precisely 28 days after the date when the Seller received the Appeal Award.
The Buyer contended that the appeal to the Court was out of time. On 17 June 2025, the Seller issued an application, seeking an extension of time if it was necessary. On 18 June 2025, the Buyer applied to strike out the Seller’s arbitration claim form.
The Court was required to consider: (i) whether the claim was brought out of time; and, if so (ii) whether an extension of time should be granted.
The 1996 Act
S.70(2)(a) of the 1996 Act provides that any application or appeal under ss. 67 to 69 may not be brought if the appellant or applicant has not first exhausted any available arbitral process or appeal or review.
S.70(3) states that 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.”
The Commercial Court decision
The key question was whether the 28-day time-period under s.70(3) ran from the date of the Appeal Award or from the date when the Appeal Award was received by the Seller and so notified of the result.
There appeared to be only two authorities dealing directly with the running of time under s.70(3) in the context of an arbitral appeal. The first involved a FOSFA arbitration, UR Power GmbH -v- Kuok Oils and Grains Pte Ltd [2009] EWHC 1940 (Comm)(Kuok) and the second, a GAFTA arbitration, PEC Ltd -v- Asia Golden Rice Co Ltd [2012] EWHC 846 (Comm)(PEC).
While the two earlier decisions differed in the reasoning put forward, the Court in this case concluded that the judges in both those earlier cases had agreed on the fundamental point: any challenge under the 1996 Act to an arbitral appeal award must run from the date of the appeal award.
The Court in this case agreed with that conclusion. It had long been recognised that the time limit for challenges to an appeal award should run from the date of the appeal award rather than from the uncertain time of notification of the outcome, which itself might differ as between the parties.
The Court added that, contrary to what had been suggested in Kuok, this conclusion applied equally to FOSFA and GAFTA appeal awards as it did to any other arbitral appeal award. The fact that GAFTA and FOSFA offered two-tier arbitration schemes did not lead to a different conclusion in this respect. Where there had been an award by a first-tier tribunal and that was appealed to the second-tier tribunal, then time started to count from the date of the appeal award as that was the award being challenged in court.
The Court further highlighted that there was also a general understanding among arbitration professionals that any challenges to a FOSFA or GAFTA appeal ran from the date of the appeal award.
The Court concluded that the arbitration claim form had not been issued within time. The Court further declined to extend time. One reason for the delay, payment difficulties due to sanctions, was excusable. However, the Seller had instructed Russian, not English, lawyers and had, therefore, failed to properly appreciate the time limit and to use the time it had to appeal effectively.
The claim was struck out.
Comment
The decision highlights once again the importance of bringing challenges to arbitration awards, whether first- or second-tier awards, within the statutory time-limit of 28 days from the date of the award.
Delayed payment of the tribunal’s fees for whatever reason that results in a challenge to the award being made out of time is unlikely to result in a time extension being granted.
