Key takeaways
Strict deadlines govern arbitration claim forms
Failure to serve within one month risks dismissal.
Non-disclosure undermines urgent court relief
Applicants must disclose all facts in good faith.
Procedural missteps can void freezing orders
Late service and errors led to WWFO discharge.
AAA -v- BBB & others [2025] EWHC 1647 (Comm)
This decision provides a salutary reminder of the importance of compliance with procedural rules and that an arbitration claim form must be served within one month of its issue. If an extension of time is required in order to allow for service out of the jurisdiction, an application to extend the validity of the arbitration claim form should be made promptly and in time.
The background facts
A dispute arose under a software licence agreement between the claimant, AAA, and BBB concerning an online casino platform. The claimant alleged he was owed certain sums by BBB, which BBB denied. BBB also claimed to have a counterclaim for certain sums.
In November 2024, Mr X, the claimant group’s chief legal officer, swore an affidavit in support of the claimant’s application for a worldwide freezing order (WWFO) pursuant to s.44(3) Arbitration Act 1996 (1996 Act) against BBB and others in aid of a Latvian-seated arbitration between the claimant and BBB. In that affidavit, Mr X stated that the claimant was “imminently” intending to refer the claims against BBB to arbitration in Latvia. In fact, in January 2024, the claimant’s Balkan lawyers, NBLO, had served a notice to arbitrate on BBB but matters appeared not to have progressed after that.
S.44 of the 1996 Act provides that in an urgent case, the Court may, on the application of a party or proposed party to arbitral proceedings, make such orders as it considers necessary to preserve evidence or assets.
The arbitration claim form and the WWFO application notice were sealed on 18 December 2024. Pursuant to CPR 62.4(2), the arbitration claim form was required to be served within one month of its date of issue, i.e. by 17 January 2025.
The hearing of the without notice WWFO application was eventually listed for 7 February 2025, partly due to the Court being in vacation. However, on the evidence, the claimant also did not appear to pursue the matter with urgency, so the court listing office assumed it was not urgent.
In the meantime, the time for serving the arbitration claim form had expired on 17 January 2025. However, at the WWFO hearing, the judge’s attention was not drawn to the fact that the arbitration claim form had expired 21 days previously. An interim WWFO was granted at the hearing.
No steps had been taken to serve the arbitration claim form because, as Mr X subsequently submitted in a witness statement, to have served the arbitration claim form on BBB prior to the hearing of the WWFO application and the sealing of the WWFO on 13 February, would have defeated the purpose of a without notice application. The claimant’s position was that the arbitration claim form had only been issued in support of the WWFO application, rather than as a “stand alone” document.
The WWFO included an undertaking by the claimant to serve the arbitration claim form and other documents as soon as practicable. The judge had also granted leave to serve the proceedings on BBB out of the jurisdiction.
However, no steps were taken by the claimant in connection with serving the arbitration claim form until 28 February 2025, when the claimant contacted the Foreign Process Section (FPS) with regard to formal service of proceedings out of the jurisdiction. In the interim, BBB had been notified informally of the WWFO.
When, on March 2025, the FPS notified the claimant that the arbitration claim form had expired and asked whether any extension had been granted, NBLO replied that the judge who granted the WWFO had granted leave to serve the arbitration claim form and documents out of the jurisdiction. Therefore, in the claimant’s view, no extension was required.
As the Court subsequently noted, NBLO had failed to understand (i) the significance of the arbitration claim form, as the document based on whose service the Court’s jurisdiction was founded, and (ii) the mandatory requirement to serve the arbitration claim form within one month of its issue.
The arbitration claim form was purportedly served on BBB by a process server on 26 March 2025, ten weeks after it had expired. On 28 March 2025, the FPS notified the claimant that it needed an extension of time before the FPS could serve the arbitration claim form and documents on its behalf.
On 9 April 2025, the claimant applied for an extension of time to serve the arbitration claim form pursuant to CPR 62.4(2). That was the incorrect provision, the applicable requirements being set out in CPR 7.6. In its application, the claimant also did not explain
when the arbitration claim form had expired;
what, if anything had been done to serve it before its expiry;
what, if any, difficulties the claimant had with serving during the one-month period;
what had been done to resolve those difficulties, or
the basis upon which it could be said that the claimant had made the extension application promptly.
The claimant submitted in evidence its position that the arbitration claim form had only been issued in support of the WWFO application and was only a supporting document to that application. Therefore, it did not consider an extension of time to have been required because it was only obliged to serve the arbitration claim form after the WWFO was sealed on 13 February 2025. Nonetheless, it said it was now seeking an extension because of the FPS’ stance.
On 13 April 2025, the judge granted a twelve-month extension of time on the papers. This was 13 weeks after the arbitration claim form had expired.
BBB contested the Court’s jurisdiction and applied to the Court to (i) set aside the arbitration claim form, (ii) set aside the order extending the validity of the arbitration claim form, and (iii) discharge the WWFO.
Procedural rules
CPR 62.4(2) provides as follows:
"Unless the court orders otherwise an arbitration claim form must be served on the defendant within 1 month from the date of issue and rules 7.5 and 7.6 are modified accordingly."
CPR 7.5 deals with service of a claim form. It provides that the time for serving a claim form within the jurisdiction is four months and out of the jurisdiction is six months.
CPR 7.6 sets out the jurisdictional requirements for granting an extension of time for serving a claim form. The rule distinguishes between applications for an extension that are made in time and those that are made out of time, i.e. after a claim form has expired.
The Court has no jurisdiction to grant an extension if the requirements are not satisfied. However, the Court may refuse to grant an extension even if the requirements are met.
CPR 7.6(3) provides that the Court may only grant an extension of time after a claim form has expired if:
"(a) the court has failed to serve the claim form; or
(b) the claimant has taken all reasonable steps to comply with rule 7.5 but has been unable to do so; and
(c) in either case, the claimant has acted promptly in making the application.”
The Commercial Court decision
The Court dismissed the claimant’s argument that CPR 62.4(2) contained a freestanding power to extend time because it modified CPR 7.5 and 7.6. The Court found there was no authority indicating that this rule gave the Court a general discretionary power to extend time for service of an arbitration claim form.
The Court stated that, firstly, CPR 62.4(2) modified but did not replace CPR 7.5 and CPR 7.6, subject only to the replacement of the four-month period in CPR 7.5 by the one-month period in rule 62.4(2).
Secondly, given the emphasis placed on speed and finality in relation to arbitration applications, it could not have been intended to apply a less strict regime for extensions of time of arbitration claim forms than for claim forms in general. If anything, one would expect the opposite.
The Court also rejected the claimant’s submission that the one-month period in rule 62.4(2) did not apply where the arbitration claim form had to be served abroad. Again, this would cut against the policy of speedy finality in arbitration matters. While service overseas could take longer is some cases, delays in service could be, and often were, addressed by the making of an in-time application under rule 7.6(2).
Additionally, the Court found that the judge granting the WWFO could not have impliedly granted an extension of time for service of the arbitration claim form. An extension of time could only be granted if the Court satisfied itself that the requirements of CPR 7.6 had been met. Those requirements had not been drawn to the judge’s attention, nor had the judge been told that the claim form had expired.
The Court emphasised that applicants for without notice relief had a duty of utmost good faith to disclose all material facts to the Court that might reasonably have affected the Court’s decision.
The Court concluded that time for serving the claim form had not been extended and the WWFO should be discharged. The requirements of CPR 7.6 were not satisfied. Among other things, the claimant had not taken reasonable steps to serve the arbitration claim form within time and had taken no steps to attempt to serve the arbitration claim form until after it had expired. It could not rely on an argument that to have done so would have tipped off BBB regarding the WWFO. There were strict criteria for the grant of extensions, particularly retrospective extensions. Furthermore, BBB had been put on notice of potential legal proceedings in December 2023 but had taken no steps in the 15 months since then to dissipate assets or conceal evidence.
Additionally, the claimant had not progressed its WWFO application swiftly, such that the application was only heard on 7 February 2025. This delay was partly tactical and due to an attempt to coordinate with a parallel application for an injunction in Cyprus.
The claimant also did not act promptly in making its application for a time extension, even after the FPS pointed out in March 2025 that the arbitration claim form had expired.
Finally, there was material non-disclosure to the judge when applying for the WWFO without notice, and the extension of time in not pointing out that the arbitration claim form had expired and in not referring the judge to the requirements of CPR 7.6.
The Court noted the claimant wished to seek a new WWFO and its offer to undertake to issue a new arbitration claim form within two business days thereafter. The parties could make submissions in this regard if they wished. However, the Court cautioned that the material non-disclosure with regard to the original WWFO and extension application was serious, even if non-deliberate, and might be a strong factor against the grant of any further injunctions. Further, it might be regarded as abusive for the claimant to issue a further arbitration claim form after allowing the first one to expire.
Comment
The decision highlights the importance of abiding by the procedural rules and, in the case of applications for without notice relief, discharging the duty of utmost good faith to disclose all material facts. The fact that the representatives of a party may not be English-qualified lawyers will not be considered a reasonable excuse for misunderstanding the requirements and failing to comply.
