Posts tagged: GAFTA

The ambit of “proceedings” under s.72

In yet another eminently sensible decision the Court of Appeal has taken a broad view on the ambit of the “proceedings” referred to in s.72 Arbitration Act 1996. In Broda Agro Trade v Alfred Toepfer (2010) T commenced arbitration proceedings against B under the rules of GAFTA claiming damages for breach of an alleged contract for the supply by B to T of a quantity of milling wheat. B took the view that no contract was concluded and requested GAFTA not to accept jurisdiction. The GAFTA tribunal issued an interim award on jurisdiction concluding that there was a binding contract. In the substantive dispute B served and filed submissions but continued to maintain that there was no binding contract. The tribunal held that B had acted in breach of contract and awarded damages to T. The judge held that, although B had not taken part in the arbitration proceedings leading to the interim award on jurisdiction, it had taken part in the proceedings on the merits and therefore could not make an application under s. 72. questioning whether there was a valid arbitration agreement (which is permitted if a party takes no part in the proceedings) . B submitted that on its true construction the reference in s.72 to a person “who takes no part in the proceedings” was to a person who did not take part in the proceedings in which the tribunal decided whether it had substantive jurisdiction.
The Court of Appeal held that the wording of s.72 was clear. There was no basis for an implied restriction of the words “takes no part in the proceedings” to the proceedings relating to the determination of the substantive jurisdiction of the arbitrators. The purpose of the requirement was clear. A person who considered that he had not entered into an arbitration agreement was entitled to ignore the arbitration proceedings. If he took that course, his right to claim relief from the court could not be restricted because he did not participate in those proceedings. If, on the other hand, he participated in the proceedings, whether in relation to the jurisdiction of the arbitrators or in relation to the exercise of their asserted substantive jurisdiction, and was disappointed by their decision, he could fairly be required to bring proceedings to challenge their award within the limited time applicable to an application under s.67,

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