Key takeaways
Non-participants face strict challenge limitations
Courts uphold GAFTA rules even without active involvement.
Section 28 does not shield late applications
Timing remains critical for post-award challenges.
Early engagement prevents costly arbitration risks
Proactive participation avoids procedural and financial pitfalls.
African Distribution Company SARL -v- AASTAR Trading Pte Ltd [2025] EWHC 2428 (Comm)
This was an application brought by the claimant, African Distribution Company SARL, to set aside a GAFTA arbitration award in favour of the defendant, AASTAR Trading Pte Ltd.
The claimant was a “non-participant” under s.72 of the Arbitration Act 1996 (AA 1996), which means it was a party to the GAFTA proceedings, but had not taken part, as it contended it had not been validly served with the Notice of Arbitration.
The claimant’s applications under ss. 67 and 68 AA 1996 for extensions of time to challenge the award were unsuccessful. However, the Court found that the claimant could seek appropriate relief under s.72(1) AA 1996 and that the 28-day time-limit under s.70(3) AA 1996 would not apply.
Even though the application was brought under the AA 1996, the Court also usefully considered the relevant sections in light of the amendments made by the Arbitration Act 2025 (AA 2025).
The background facts
The claimant was an Ivorian company specialising in the trade of fresh or industrial nature food products.
The defendant was a Singaporean trading company specialising in the supply of various products, including food products.
The parties entered into numerous contracts on the defendant’s standard form. The contracts provided for GAFTA arbitration “in Singapore in accordance with Arbitration Rule 125 of GAFTA”. The GAFTA arbitration rules (GAFTA Rules) provide for arbitration in London.
A dispute arose across sixteen contracts, under which the defendant demanded payment. The defendant proceeded to email a letter before claim to the claimant using two generic email addresses.
After no response had been received, the defendant issued GAFTA arbitration proceedings by emailing a Notice of Arbitration to the same two generic email addresses and then to GAFTA. The claimant did not respond to the Notice or to any of the following emails sent by the defendant and GAFTA to those same email addresses.
The arbitrator was appointed in London and in due course issued an award in London in favour of the defendant in respect of 13 out of the 16 disputed contracts (Award). In the Award, the arbitrator stated that whilst the GAFTA Rules changed in January 2022, under each version, the seat of an arbitration by GAFTA was London, which took precedence over the reference to Singapore in the arbitration clause. Subsequently, local enforcement proceedings were physically served by a bailiff on the claimant in the Ivory Coast.
The claimant applied to the English High Court seeking to set aside the Award on three grounds for lack of substantive jurisdiction under s. 67 AA 1996 and/or procedural irregularities under s.68 AA 1996. It also sought an extension of time to apply for relief available to a non-participant in the arbitration under s. 72(1) AA 1996.
The claimant’s application was brought after the expiry of the 28-day limit for s.67 and s.68 challenges, which is set out in s.70(3) AA 1996. The claimant relied on the Court’s discretion under CPR 62.9 to seek an extension of time. An issue also arose as to whether the 28-day time-limit applied to an application under s.72(1).
AA 1996
S.72 provides as follows:
“72 Saving for rights of person who takes no part in proceedings.
(1) A person alleged to be a party to arbitral proceedings but who takes no part in the proceedings may question (a) whether there is a valid arbitration agreement, (b) whether the tribunal is properly constituted, or (c) what matters have been submitted to arbitration in accordance with the arbitration agreement, by proceedings in the court for a declaration or injunction or other appropriate relief.
(2) He also has the same right as a party to the arbitral proceedings to challenge an award (a) by an application under section 67 on the ground of lack of substantive jurisdiction in relation to him, or (b) by an application under section 68 on the ground of serious irregularity within the meaning of that section affecting him; and section 70(2) (duty to exhaust arbitral procedures) does not apply in his case.”
The Commercial Court decision
The Court confirmed that s72(1) applies only to non-participants in an arbitration.
Furthermore, s.72(1) is a free-standing right (i.e. separate to and independent of any rights under s.67 to 69 AA 1996) by proceedings for injunctive, declaratory or other relief. It is not, therefore, subject to time-limit constraints applicable to the ss.67 and 68 applications in this case.
Additionally, and on the authorities (which appeared to be, but the Court found were not, inconsistent), the Court decided that s.72(1) relief is available post-, and not only pre-, award.
By contrast, s.72(2) is not a free-standing right and allows non-participants to exercise a similar right to that of a participant party to challenge an award under ss.67 and 68. It is, therefore, subject to the 28-day time-limit. The s.72(1) claim could, therefore, proceed but the Court sought further submissions from counsel in this regard.
In deciding whether to exercise its discretion to grant time extensions for challenging the Award under ss.67 and 68, the Court considered the relevant (non-exhaustive) factors set out in AOOT Kalmneft -v- Glencore [2001] 2 All ER Comm (59), namely:
the length of the delay
whether the claimant acted reasonably
whether the respondent or the arbitrator contributed to the delay
whether the respondent would suffer irremediable prejudice
whether the arbitration has continued during the period of delay and, if so, what impact on the progress of the arbitration or the costs incurred in respect of the determination of the application by the court might now have
the strength of the application
whether in the broadest sense it would be unfair to the applicant for him to be denied the opportunity of having the application determined
Having considered the relevant circumstances in this case, the Court concluded that there was significant delay in seeking the extension of time, for which the defendant bore no responsibility. This delay was not justified when expedition was fundamental to the arbitral system.
The claimant also failed to get appropriate legal advice about challenging the Award. While the issue of whether there had in fact been no valid service of the arbitral proceedings was relevant to the question of fairness, the Court noted that as the claimant had an alternative remedy under s.72(1), the prejudice that the defendant would suffer if an extension of time were granted for the ss.67 and 68 applications weighed against doing so. Therefore, it dismissed those extension applications.
Validity of email service
In reaching its decision, the Court made some useful observations on the validity of service of arbitration proceedings by email to a generic email address. The Court confirmed that service of the claim in arbitration proceedings can be effective when sent to a generic email address.
The defendant’s Singaporean lawyers did not request a “read receipt” when emailing the Notice of Arbitration nor did GAFTA do so with its later emails, which would have allowed the Court to find “as fact that those emails were received”. It was plausible that the emails were caught by spam or deleted over time. The lack of a receipt created an “evidential gap about whether the Notice was read”.
Comment
The decision provides useful guidance on a number of principles regarding post-award applications by non-participants.
From a practical standpoint, it also reinforces important principles:
The time-pressure on litigants to act promptly in assessing whether to challenge awards.
The importance of having clear service provisions in the contract.
Absent clear service provisions, when serving by email, it is good practice to include “read receipts”.
A party cannot rely on the content of legal advice they received while also reserving privilege of over it. In this case, the claimant alleged that its Ivorian lawyer said it could ignore the Award in the enforcement proceedings and a debate ensued as to whether privilege had been waived and also as to the capacity in which that alleged advice was being relied upon.
