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England and Wales High Court (Commercial Court) Decisions
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Cite as:  EWHC 538 (Comm)
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BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Rolls Building, Fetter Lane
London, EC4A 1NL
B e f o r e :
|DAEWOO SHIPBUILDING & MARINE ENGINEERING|
|- and -|
|(1) SONGA OFFSHORE EQUINOX LIMITED|
|(2) SONGA OFFSHORE ENDURANCE LIMITED||Defendants|
(instructed by Stephenson Harwood LLP) for the Claimants
Simon Rainey QC and Tom Bird
(instructed by Ince & Co LLP) for the Defendants
Hearing date: 5 March 2018
Crown Copyright ©
(1) The first is an application by the Defendants, Songa Offshore Equinox Limited and Songa Offshore Endurance Limited ("Songa"), to strike out/summarily dismiss the application of the Claimant, Daewoo Shipbuilding & Marine Engineering Company Limited ("DSME"), under section 69 of the Arbitration Act 1996 (the "Act") for permission to appeal against two arbitration awards on preliminary issues of construction (the "Awards") on the ground that the section 69 application was brought outside the 28-day time limit for such applications as set forth in section 70(3) of the Act.
(2) The second is an application by DSME, under section 80(5) of the Act, to extend time for the making of that section 69 application, if and insofar as an extension is necessary.
B. Factual Background
B.1 The Underlying Dispute
B.2 The Arbitration
i) "Under [the Contract], did DSME's right under Item 2 in the Yard Clarification List to notify Songa of errors in documents and/or drawings apply to errors in FEED (front-end engineering design) documentation?
ii) If so, then in the event that DSME duly notified such an error within the 90-day period, which party bore responsibility for any additional costs, expenses or delays resulting from such errors?"
B.3 The Award and the Memoranda of Correction
i) DSME's right under Item 2 in the Yard Clarification List to notify Songa of errors in documents and/or drawings did not apply to errors in FEED documentation; and
ii) In the event that DSME purported to notify an error in the FEED documentation within the 90-day period, DSME nevertheless bore responsibility for any additional costs, expenses or delays resulting from such error.
"1. The statement in paragraph 7 that it was Songa which identified the preliminary issue which the Award decides. It was, in fact, DSME which first identified the preliminary issue by way of its application for a trial of preliminary issues dated 31 May 2016;
2. The statement in paragraph 7 that it was DSME which pleaded a claim for rectification, and then abandoned such claim. DSME did not plead a claim for rectification. It was Songa which, by way of Ince & Co's email to the Tribunal dated 9 December 2016, abandoned its rectification plea advanced at paragraphs 89 to 91 of the Songa Equinox Defence and Counterclaim and at paragraph 11 of the Songa Endurance Defence and Counterclaim;
3. At paragraph 8, DSME is said to have been responsible for formulating the preliminary issues, but then at paragraph 15 the formulation of the first issue is said to have been Songa's. The wording of the preliminary issues adopted by the Tribunal at paragraph 8 of the Awards was first set out at paragraph 19 of DSME's application for a trial of preliminary issues dated 31 May 2016;
4. At paragraph 22 the key email of 27 May 2011 is dated in 2014."
B.4 The application for permission to appeal and subsequent events
"The 28 day period for bringing an appeal expired on 15 August. When we spoke this morning you advised that you had not received instructions from DSME to appeal.
Before we incur time and costs engaging with you on the ancillary items, we would be grateful if you would formally confirm that DSME has not appealed, and will not be appealing, the Tribunal's Award."
(1) Whether DSME's application for permission to appeal the Awards was brought within the 28-day time limit set out in section 70(3) of the Act – this being a question of whether time ran from the date of the Awards or from the Memoranda of Correction; and
(2) If DSME's application for permission to appeal the Awards was not brought in time, whether DSME should be granted a retrospective extension of time for issuing this appeal under section 80(5) of the Act.
C. The Time Limit under section 70 of the Arbitration Act 1996
C.1 The relevant provisions of the Act
"70 Challenge or appeal: supplementary provisions.
(1) The following provisions apply to an application or appeal under section 67, 68 or 69.
(2) An application or appeal may not be brought if the applicant or appellant has not first exhausted—
(a) any available arbitral process of appeal or review, and
(b) any available recourse under section 57 (correction of award or additional award).
(3) 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."
"54 Date of award.
(1) Unless otherwise agreed by the parties, the tribunal may decide what is to be taken to be the date on which the award was made.
(2) In the absence of any such decision, the date of the award shall be taken to be the date on which it is signed by the arbitrator or, where more than one arbitrator signs the award, by the last of them."
"57 Correction of award or additional award.
(1) The parties are free to agree on the powers of the tribunal to correct an award or make an additional award.
(2) If or to the extent there is no such agreement, the following provisions apply.
(3) The tribunal may on its own initiative or on the application of a party—
(a) correct an award so as to remove any clerical mistake or error arising from an accidental slip or omission or clarify or remove any ambiguity in the award, or
(b) make an additional award in respect of any claim (including a claim for interest or costs) which was presented to the tribunal but was not dealt with in the award.
These powers shall not be exercised without first affording the other parties a reasonable opportunity to make representations to the tribunal.
(4) Any application for the exercise of those powers must be made within 28 days of the date of the award or such longer period as the parties may agree.
(5) Any correction of an award shall be made within 28 days of the date the application was received by the tribunal or, where the correction is made by the tribunal on its own initiative, within 28 days of the date of the award or, in either case, such longer period as the parties may agree.
(6) Any additional award shall be made within 56 days of the date of the original award or such longer period as the parties may agree.
(7) Any correction of an award shall form part of the award.
"1 General principles
The provisions of this Part are founded on the following principles, and shall be construed accordingly—
(a) the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;
(b) the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest;
(c) in matters governed by this Part the court should not intervene except as provided by this Part."
i) First, it might be the case that any correction effectively resets the time limit for bringing an application or appeal, even if the corrections were wholly irrelevant to that subsequent application or appeal. This is the position adopted by DSME. That position could be arrived at if it was concluded that an application for a correction pursuant to section 57 of the Act was an arbitral process of appeal or review for the purposes of section 70(3), or alternatively if the date of the award for the purposes of section 70(3) where corrections are sought is when those corrections are published (or when the decision rejecting the proposed corrections is published as the case may be).
ii) Second, it might be the case that no application under section 57 is ever of any relevance to the time-limit set out in section 70(3) - the time limit is always 28 days from the original award.
iii) Third, the position might depend on the nature of the correction, such that the time limit was 28 days from the date of the original award unless there was a correction to the award of a particular type, for example if the correction was in some way material to the decision to appeal. This is the position adopted by Songa.
C.2 Prior Authorities
"These all refer to matters which should have been taken up with the arbitrator before an appeal should be launched. However, I do not agree with Mr Coster's submission that this has the effect of barring the whole of the appeal. I see no reason why an award should not be severed and those parts of the award which are unaffected by decisions on ambiguities or uncertainties should not have effect or be treated as unaffected without any requirement under s 70(2) first to have recourse to s 57 before launching an appeal or application. Mr Coster says that the purpose of the Act is to ensure both that the arbitrator and the courts are not troubled by repeated applications, but also that the court should have the totality of the arbitrator's views as clarified and with ambiguities removed in all respects before considering any appeal or process. He relies upon the words of sub-ss 2 and 3 in referring to any available process of appeal and any process of appeal or review.
I see the force of that argument. It certainly must apply where the uncertainty or ambiguity has affected or may affect that part of the result which is in question (and also perhaps in some cases the reasoning leading to that result). However, one must carefully consider what would be the point of delaying an appeal on a matter which as here would be completely unaffected by any possible outcome of going back to the arbitrator to clarify an ambiguity or uncertainty. The purpose of arbitration proceedings is, amongst other things, to have an expeditious and economical resolution of a dispute: see s 1 of the Act which provides:
"1.The provisions of this Part are founded on the following principles, and shall be construed accordingly-(a) the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense; (b) the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest; (c) in matters governed by this Part the court should not intervene except as provided by this Part…"
The time limits set out in the Act seem to me to point quite clearly to the court being seized of any appeal within a specific time limit. Recourse to s 57 necessarily postpones those time limits (see s 57(4)-(6)) and leaves any otherwise victorious party in uncertainty as to whether or not there would be a challenge to a part of the award which was otherwise entirely clear and certain as to its effect. Mr Coster's argument would therefore enable a recalcitrant party to apply to the arbitrator for the correction of any supposed error (of any of the kinds described in s 57(3)(a)) in order to give it more time to lodge any appeal or to make an application in respect of a part which could not possibly be connected to the supposed error. In addition the request for correction might demonstrate that there was no error so that the award would be altered. If there were an error and if the arbitrator's response to the application did resolve the question of law or ground of challenge an appeal or application would then be made within the statutory period. If either the applicant or the respondent to an appeal or application in respect of the unaffected part considered that its outcome might be influenced by the arbitrator's response then, and in the relatively unlikely event, that such an appeal or an application might be heard or decided before the response was known, an application should be made to the court for a postponement.
In my judgment therefore Mr Coster's suggested interpretation is not consistent with the principles of the Act as set out in s 1, one of which is that there should be a fair resolution of disputes. A party should know whether it has got an award which will be enforceable or not and, if there is to be a challenge or appeal which is unrelated to the outcome of the correction of a supposed ambiguity or uncertainty, it is to know within a short time whether there is to be a challenge and why there is to be a challenge. Accordingly, giving the Act the teleological interpretation required by s 1, I do not consider that Mr Coster's argument is correct for this reason and those set out above. It is clear that resolution of the points upon which it is said there is ambiguity or uncertainty would not affect the main grounds of challenge."
"42. There is, potentially, a short answer to the Edwards' submission that Pillar's application was made out of time, namely that the application was made within time since, by virtue of section 70 (3) of the Act, the requisite 28 day period within which a court challenge must be made runs from the date of the award unless "there has been any arbitral process of appeal or review". In such a case, the period within the application must be made runs from the date when the applicant was notified of the result of that post-award process. It would seem arguable that the process of correcting each award that was undertaken by the arbitrator was a "process of review", in which case the relevant starting date for the 28 day period for the principal award was 17 June 2000. On this view, Pillar's section 68 application in connection with that award was made in time. However, it is also arguable that the process of correction is something different from a process of appeal or review, particularly since section 70 appears to distinguish a process of correcting the award from other processes of review. Section 70(2)(a) refers to a "process of appeal or review" and section 70(2)(b) refers to "any available recourse under section 57". I will, therefore, consider and determine Pillar's application for an extension of time since an extension of time would appear to be required as a prerequisite for my determining that application."
"8. Section 57(7) says in terms that the correction of the award shall form part of the award, and s.54 says that the date of the award, unless the tribunal has decided otherwise or it is otherwise agreed by the parties, shall be taken to be the date on which it is signed by the arbitrator. The ordinary construction of the Act, reading s.54(2) with s.70(3), is that, for the purposes of the latter, the date of the award is the date when the award is signed by the arbitrator.
9. So, on the face of it, if someone asked for a correction within the 28-day period provided by sub-section (4), then that process so initiated might well not be exhausted until after the 28-day period required by s.70(3) had expired. So how does one reconcile the apparent conflict between sub-s.(2)(b) and sub-s.(3) and s.70 with the process in s.57?"
"11. In considering what Parliament presumably intended by s.57 and s.70, then of these principles one needs to bear in mind the first, namely, that one of the objectives of arbitration is to obtain the resolution of disputes without unnecessary delay or expense; and the third, namely, that the court is not to intervene except as provided by that Part of the Act. It must also be inferred from the second principle that parties should not be required or obliged to go to the court unless it is absolutely essential, since the role of the court is a reserve power and to be minimised so that the parties may be free to resolve their disputes consensually. Thus the arbitration process should be worked through to finality before there is recourse to the court (see also section 70(3).
12. Because of the distinction made in sub-section (2) of section 70 between (a) the process of appeal or review and (b) recourse under section 57, the latter clearly cannot be a process of review. But for that distinction it would otherwise be so treated since the power to correct or to make an additional award would plainly be part of the "available arbitral process" as defined by section 82 of the Act as it would a process of review by a person vested by the parties with powers in relation to that matter (who may be the arbitrator). Quite clearly the distinction is drawn between those two methods of recourse. Thus the objection taken by the respondent throws up something in the nature of a Catch 22: If you cannot make an application or bring an appeal by virtue of s.70(2) until you have exhausted the process of review under s.57, how then can you ever comply with s.70(3)?"
"19. In my view, a balance has to be struck between the tension created between the application of the principles that there should be a fair resolution of a dispute and that the parties should not be involved in unnecessary delay and expense. Unnecessary expense is to be avoided, namely pre-emptive applications, and if the role of the court is to be kept to the minimum, and if parties are to know where they stand before they decide whether or not to make an application or to resist an application under s.68 or s.69, they must first know precisely what is the arbitrator's decision, where his award has been questioned under s.57. In my judgment, reading the provisions of the Act together, and applying section 1 in the purposive manner that is required, the reason why there is no reference in sub-s.(3) to sub-s.(2)(b), namely any available recourse under s.57, is because, for all practical purposes, the date of the award cannot be the date upon which it is signed by the arbitrator but the date upon which the correction is or, by decision of the arbitrator, [is] not made, following an application under s.57, because that is the date when any uncertainties that there may have been about the award will be resolved. Accordingly there will then a resolution of the all the disputes with which the arbitral tribunal has power to decide stemming from the original reference and extended by the provisions of section 57 (as the parties did not agree on the powers of the tribunal to correct an award or to make an additional award). Section 57 is dealing not merely with slips and other such mistakes but with substantive clarifications and the removal of ambiguities, both of which are likely to be of potential importance if required. Section 57(7) provides any correction of the award shall form part of the award but does not deal with the date of the corrected award. I cannot accept that the correction is to be back dated: the change might affect the substance. The date of an award, if corrected, must be the date of the corrected award.
20. The other part of section 57 is of comparable, if not greater, importance as it may lead to an additional award to deal with an issue that has been overlooked. In my view it would be most unsatisfactory if a party that is left in doubt about the meaning or effect of an award because it was not clear whether or not a particular claim or issue had been dealt with and that had therefore to invoke both parts of section 57, would, before receiving the tribunal's decision, have to decide whether or not to make an application or any appeal on a speculative basis and on the footing that there would be no additional award. If an additional award were needed and made then there can be no doubt that, for the purposes of section 70(3), its date would be the effective date. Yet if the arbitrator decided, perhaps wrongly, no additional award were needed the applicant would have to appeal or challenge the original award. That is not desirable nor is consistent with the simplicity that should be achieved in arbitration. When the dispositive parts of the award are separated so that the award can properly be severed and the applicant does not need to know more from the arbitrator to mount an appeal or challenge then, notwithstanding recourse to section 57, the date in relation to the part unaffected must be that provided by section 54(2) applied literally. If they cannot be severed then given that, where there was a process of appeal or review, Parliament intended that the time for making an application should only begin once the result was known to the applicant, I cannot believe that it was intended that an applicant who had sought correction or clarification should nevertheless have to make an application or appeal without knowing or being certain of the grounds upon an appeal or challenge could properly be made. The rules governing such applications call for the grounds to be set out comprehensively and with clarity and precision. Arbitration applications are not to be made on a speculative basis nor are they to be equated with the issue of simple claim form to stop time running. I therefore accept Miss Jackson's submissions. These conclusions are necessarily pragmatic but such an approach is in my judgment is required by the Arbitration Act 1996 .
21. Accordingly, for the purposes of s.70(3) the correct date will be the date upon which Mr. Higgins decided that the award should stand as it did, and that it did not require to be clarified, that is to say 20 October 2000."
"63. The obvious way to achieve this effect is to construe "the award" in s. 70(3) as meaning "the award as corrected" in any case where an application has been made to the tribunal under s. 57(3)(a). Section 57(7) provides that "Any correction of an award shall form part of the award", but does not say that it should share the date of the original award in its uncorrected form. The common sense view is to treat the corrected award as bearing the date of the correction, so that the 28 days run from the date on which the correction was published. This was the approach of Judge Humphrey Lloyd, Q.C. in Blackdale Ltd. v. McLean Homes South East Ltd. (TCC Nov. 2, 2001, unreported at pars. 8-14 and 19) and I respectfully agree with it. Judge Humphrey Lloyd further held that where two complaints are made about separate parts of an award only one of which is made the subject of a reference to the tribunal under s. 57(3)(a), time will run from the date of the original award in respect of the other part complained of, if that part is properly severable. In some cases this will prevent a party raising a number of complaints about an award from gaining a generous extension of time for challenging it because a small part has been referred back to the arbitrators under s. 57(3)(a). However, even where severance is not possible, the time gained by referring back one part of the award under s. 57(3)(a) is not very great. By s. 57(5) any correction of an award must be made within 28 days of the application being received by the tribunal and the application itself must be made within 28 days of publication of the original award, unless agreed between the parties.
64. The correction award was published on Nov. 22, 2001. The application under s. 68 was issued on Dec. 20, 2001. If all that matters is the date of the correction award, the application was in time."
"In my view, the arbitrator's clarification issued on 2nd May 2005 constitutes "an arbitral process of … review" for the purposes of section 70(3) of the Act. Accordingly, no extension of time is necessary."
67 The first difficulty with these provisions is whether the extended running of time for appeal mentioned in subsection (3) applies only to any process invoked under subsection (2)(a) or applies to an application under section 57 as well. Taking the provisions as they stand, the fact that subsection (3) uses the words "any arbitral process of appeal or review" which are found only in subsection (2)(a) suggests that an application under section 57 does not have the effect of extending the 28 day time limit, although the way in which the provisions are drafted – with section 70(3) appearing to qualify the whole of section 70(2) – might suggest otherwise. In Surefire Systems Ltd v Guardian ECL Ltd  EWHC 1860, Jackson J briefly considered this point. He said, at paragraph 27, that in his view clarification of an award given by an arbitrator following correspondence from the parties constituted "an arbitral process of … review " for the purposes of section 70(3) of the Act.
68 The expression "available arbitral process" is defined in section 82(1) as including any process of appeal to or review by an arbitral or other institution or person vested by the parties with powers in relation to that matter. It is plainly a different process to that of correction of an award by the arbitrator himself.
69 It is perhaps relevant also that section 57(6) provides that any additional award is to be made within 56 days of the date of the original award (or such longer period as the parties may agree), so that it constitutes a further award in its own right, whereas section 57(7) provides that any correction of an award shall form part of the award. Thus the making of a correction does not alter the date on which the award is treated as having been made. This might suggest that the 28 day time limit runs from the date when the award is made, irrespective of any application for correction under section 57.
70 I have to say that, whilst the conclusion of Jackson J makes very good sense from a practical point of view, I have reservations as to whether it is correct. It is not clear from the report of the decision in that case whether or not the question was the subject of any detailed argument. It seems to me that the very precisely drafted wording in section 70(3) means that only an arbitral process of appeal or review (if there is one) has the effect of extending the time with which to appeal, so that even where there is an application for correction of an award under section 57 any application or appeal must be brought within 28 days of the award."
C.3 The decision in K v S
"I accept that in one sense a correction of an award involves a review of the award because it is only by reviewing it that the tribunal can decide whether there is a mistake, error or ambiguity which needs to be corrected. However, in my judgment it is clear from section 70(2) of the Arbitration Act 1996 that an "arbitral process of appeal or review" is a different process from "any available recourse under section 57". I consider that the former process is one by which an award is subject to an appeal or review by another arbitral tribunal (as in GAFTA arbitrations or in arbitrations pursuant to Lloyd's Standard Form of Salvage Agreement) whilst the latter recourse for correction is to the same arbitral tribunal which issued the award. This distinction is consistent with the definition of available arbitral process in section 82 of the Act and was also drawn by Edwards-Stuart J in Price v Carter  EWHC 1451 (TCC) at para 68. I respectfully disagree with the observation of Jackson J in Surefire Systems Ltd v Guardian ECL Ltd if he was referring to a correction issued pursuant to section 57 of the Act."
"Challenges to arbitration awards are strictly limited by the Arbitration Act. Where they are permitted they must be promptly made. In this way the Act promotes the finality of arbitration awards. In that context I consider that an application for correction of an award is material and will properly serve to postpone the running of the 28-day period until the date of the corrected award where the correction is necessary to enable the party to know whether he has grounds to challenge the award. In such a case there is obvious good sense in construing the 28-day period as running from the date of the award as corrected for the reasons stated in McLean Homes v Blackdale Ltd and Al Hadha Trading Co v Tradigrain SA. But if the grounds for challenge are known and are not dependent upon the outcome of the application for clarification then there is no good reason to postpone the running of the 28-day period until the date of the corrected award. To do so would unnecessarily delay the making of a challenge to an award. That would be contrary to the aim and object of the Act which is to promote the finality of arbitration awards. This was the approach of HHJ Humphrey Lloyd QC in McLean Homes v Blackdale Ltd at paras 19 to 24 with which I respectfully agree."
First, the reference to arbitral review in section 73 which could be the starting point for the 28-day period, if there was such a review, does not apply to corrected awards, which are not the same thing. The fact that the arbitrator has power to correct an award under section 57 is not to the point: see paras 17–19.
91 As to corrected awards, the position on time was as follows. Merely because the relevant party had sought a corrected award pursuant to section 57(3) , that does not without more extend time, so that the 28 days now runs from the date of the corrected award. In that regard, I respectfully prefer the view of Teare J to the very brief observations of Jackson J in Surefire Systems Ltd v Guardian ECL Ltd  BLR 534 . However, if the application to correct was material to the issue now being raised under section 68(2), then the 28 days would indeed run only from the date of the corrected Award: see paras 18–20.
92 As to what is material, I again respectfully adopt the formulation of Teare J in para 24, which is that the correction is material if it is "necessary to enable the party to know whether he has grounds to challenge the award or not". As Teare J went onto say, if the grounds of challenge were known and were not dependent on the outcome of the correction application, time indeed should run from the date of the original award."
C.4 The parties' respective cases
"It is apparent from the structure of the legislation that any arbitral process of appeal or review is quite distinct from available recourse under s 57, so that there are two distinct triggers for the running of time: 28 days from the date of the award; and 28 days from the notification to the applicant of the outcome of any arbitral process of appeal or review. There is no indication as to how the time limits are to be applicable where an application has been made under the slip rule, although it would seem to be apparent that s 70(2)(a) has no relevance because an application under s 57 is not any arbitral process of appeal or review even though the statutory definition is not exhaustive."
See also in this regard Russell on Arbitration (24th Ed. 2015) at paragraphs 8-119 to 9-122.
C.6 Colchester Estates
"It is [...] desirable that the law, at whatever level it is declared, should generally be certain. If a decision of this court, reached after full consideration of an earlier one which went the other way, is normally to be open to review on a third occasion when the same point arises for decision at the same level, there will be no end of it. Why not in a fourth, fifth or sixth case as well? Mr. Barnes had to face that prospect with equanimity or, perhaps to be fairer to him, with resignation. I decline to join him, especially in times when the cost of litigation and the pressure of work on the courts are so great. There must come a time when a point is normally to be treated as having been settled at first instance. I think that that should be when the earlier decision has been fully considered, but not followed, in a later one. Consistently with the modern approach of the judges of this court to an earlier decision of one of their number (see, e.g., Police Authority for Huddersfield v. Watson  K.B. 842, 848, per Lord Goddard C.J.), I would make an exception only in the case, which must be rare, where the third judge is convinced that the second was wrong in not following the first. An obvious example is where some binding or persuasive authority has not been cited in either of the first two cases."
"46 In the event I do not agree that a judge at first instance must treat a point as "settled" at first instance by the most recent decision of a court of co-ordinate jurisdiction unless (which will be rare) there is some reason why he is satisfied that it is wrong. In my judgment the duty of a judge under the law and according to his oath is to follow the law as declared by superior courts, in the present instance the House of Lords and the Court of Appeal, but otherwise to make his decision on the merits of the submissions put before him, giving appropriate weight but no more to authorities which may be persuasive but which, by law, are not binding. The point is of particular importance where the issue of law is one of jurisdiction. In my judgment it is both unseemly and wrong in law for a court to decide upon the extent of and the limits to jurisdiction given by Parliament on the basis of what amounts to a rebuttable presumption that the decision of another court of co-ordinate jurisdiction was correct. It is in the exercise of discretion, not rulings on "black-letter law" that consistency at first instance has a particular inherent value. Furthermore, bankruptcy is ex hypothesi a situation in which means are likely to be limited or non-existent, and if the approach to precedent suggested in Colchester Estates (Cardiff) v Carlton Industries plc  Ch 80 is correct then neither a bankrupt who is sued without leave by a creditor who has a debt provable in bankruptcy nor the Official Receiver or trustee in bankruptcy would be able to take the jurisdiction point without the expense of the skilful argument necessary for an attempt to convince the High Court that the point should not he regarded as settled by In re Saunders (A Bankrupt)  Ch 60 ."
"9 Whether or not the decision is ultimately upheld in this court, I consider that Judge Hodge QC was entirely right to follow the decision of Rimer J. Where a first instance judge is faced with a point on which there are two previous inconsistent decisions from judges of co-ordinate jurisdiction, then the second of those decisions should be followed in the absence of cogent reasons to the contrary: see Colchester Estates (Cardiff) v Carlton Industries plc  Ch 80, 84 e –85 h, per Nourse J. The present case appears to me to be a fortiori. There were a number of inconsistent first instance decisions on the point, which Rimer J considered, and came to a clear conclusion as to which line of authority he agreed with. In those circumstances, very convincing reasons indeed would have had to have been put before Judge Hodge QC before he could sensibly have departed from the reasoning and conclusions of Rimer J.
10 It is obviously desirable that the law on any topic is as clear as reasonably possible, and that is as true in insolvency as any other field. Those administering and advising on insolvencies, and those with interests in insolvencies, need to know where they stand as certainly, cheaply and promptly as possible. Albeit that any well advised person will always be aware that a decision at first instance can be overruled by this court, that cannot possibly justify judges effectively ignoring decisions of their colleagues, even though they are not, of course, bound by them."
D. DSME's Application for an Extension of Time
D.1 The Law
"Where any provision of this Part requires an application or appeal to be made to the court within a specified time, the rules of court relating to the reckoning of periods, the extending or abridging of periods, and the consequences of not taking a step within the period prescribed by the rules, apply in relation to that requirement."
"27 The principles regarding extensions of time to challenge an arbitration award have been addressed in a number of recent authorities, most notably in Kalmneft JSC v Glencore International AG  CLC 1805, Nagusina Naviera v Allied Maritime Inc  2 CLC 1, L Brown & Sons Ltd v Crosby Homes (North West) Limited  BLR 366, Broda Agro Trade (Cyprus) Ltd v Alfred C Toepfer International GmbH  2 CLC 621, and Nestor Maritime SA v Sea Anchor Shipping Co Ltd  EWHC 996 (Comm);  2 Ll Rep 144 , from which I derive the following principles:
(1) Section 70(3) of the Act requires challenges to an award under s. 67 and s. 68 to be brought within 28 days. This relatively short period of time reflects the principle of speedy finality which underpins the Act, and which is enshrined in s. 1(a) . The party seeking an extension must therefore show that the interests of justice require an exceptional departure from the timetable laid down by the Act. Any significant delay beyond 28 days is to be regarded as inimical to the policy of the Act.
(2) The relevant factors are:
(i) the length of the delay;
(ii) whether the party who permitted the time limit to expire and subsequently delayed was acting reasonably in the circumstances in doing so;
(iii) whether the respondent to the application or the arbitrator caused or contributed to the delay;
(iv) whether the respondent to the application would by reason of the delay suffer irremediable prejudice in addition to the mere loss of time if the application were permitted to proceed;
(v) 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 arbitration, the determination of the application by the court might now have;
(vi) the strength of the application;
(vii) whether in the broadest sense it would be unfair to the applicant for him to be denied the opportunity of having the application determined.
(3) Factors (i), (ii), and (iii) are the primary factors.
I add four observations of my own which are of relevance in the present case. First, the length of delay must be judged against the yardstick of the 28 days provided for in the Act. Therefore a delay measured even in days is significant; a delay measured in many weeks or in months is substantial.
29 Secondly, factor (ii) involves an investigation into the reasons for the delay. In seeking relief from the court, it is normally incumbent upon the applicant to adduce evidence which explains his conduct, unless circumstances make it impossible. In the absence of such explanation, the court will give little weight to counsel's arguments that the evidence discloses potential reasons for delay and that the applicant 'would have assumed' this or 'would have thought' that. It will not normally be legitimate, for example, for counsel to argue that an applicant was unaware of the time limit if he has not said so, expressly or by necessary implication, in his evidence. Moreover where the evidence is consistent with laxity, incompetence or honest mistake on the one hand, and a deliberate informed choice on the other, an applicant's failure to adduce evidence that the true explanation is the former can legitimately give rise to the inference that it is the latter.
30 Thirdly, factor (ii) is couched in terms of whether the party who has allowed the time to expire has acted reasonably. This encompasses the question whether the party has acted intentionally in making an informed choice to delay making the application. In Rule 3.9(1) of the Civil Procedure Rules, which sets out factors generally applicable to extensions of time resulting in a sanction, the question whether the failure to comply is intentional is identified as a separate factor from the question of whether there is a good explanation for the failure. This is because in cases of intentional non-compliance with time limits, a public interest is engaged which is distinct from the private rights of the parties. There is a public interest in litigants before the English court treating the court's procedures as rules to be complied with, rather than deliberately ignored for perceived personal advantage.
31 Fourthly, the court's approach to the strength of the challenge application will depend upon the procedural circumstances in which the issue arises. On an application for an extension of time, the court will not normally conduct a substantial investigation into the merits of the challenge application, since to do so would defeat the purposes of the Act. However if the court can see on the material before it that the challenge involves an intrinsically weak case, it will count against the application for an extension, whilst an apparently strong case will assist the application. Unless the challenge can be seen to be either strong or intrinsically weak on a brief perusal of the grounds, this will not be a factor which is treated as of weight in either direction on the application for an extension of time. If it can readily be seen to be either strong or weak, that is a relevant factor; but it is not a primary factor, because the court is only able to form a provisional view of the merits, a view which might not be confirmed by a full investigation of the challenge, with the benefit of the argument which would take place at the hearing of the application itself if an extension of time were granted."
"Accordingly, although each case terms on its own facts, the following considerations are, in my judgment, likely to be material:
(i) the length of the delay;
(ii) whether, in permitting the time limit to expire and the subsequent delay to occur, the party was acting reasonably in all the circumstances;
(iii) whether the respondent to the application or the arbitrator caused or contributed to the delay;
(iv) whether the respondent to the application would by reason of the delay suffer irremediable prejudice in addition to the mere loss of time if the application were permitted to proceed;
(v) 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.
(vi) the strength of the application;
(vii) whether in the broadest sense it would be unfair to the applicant for him to be denied the opportunity of having the application determined."
"In the Euston Centre case this court affirmed, with a slight change of language, the developing practice of Commercial Court judges to strike out court challenges if they are not being pursued with appropriate despatch. Steyn LJ made it clear that the court's inherent power to strike out appeals to the High Court from awards of arbitrators was not limited to cases where the delay occasioned by one party was such as to cause serious prejudice to the other: it was exercisable wherever there had been a failure to conduct and prosecute an appeal with all deliberate speed."
"We are told that the present arbitration has not proceeded much further, but it seems to me that that is, on any view, a relatively minor factor. A party cannot, by a later application for permission to appeal which happens to have stopped the process of an arbitration (if indeed that is what has happened) significantly improve his position."
"Finally, as to factor (vii), general considerations of fairness, the judge must have had well in mind considerations of overall justice and fairness. They must, however, always be viewed in the particular context that Parliament and the courts have repeatedly emphasised the importance of finality and time limits for any court intervention in the arbitration process."
D.2 Application of the applicable principles to the facts
D.2.1 The Primary Factors (i)-(iii)
(i) The length of the delay
(ii) Whether, in permitting the time limit to expire and the subsequent delay to occur, the party was acting reasonably in all the circumstances
i) First, that Korean corporations have "very hierarchical management structures" and that "decision-making will often take a considerable period of time in relation to important issues".
ii) Secondly, Mr Young Soon Lee (who has been described as the decision maker), was travelling outside Korea from 17 – 23 July 2017 to attend a meeting in Europe.
iii) Thirdly, the shipyard was closed from 28 July to 14 August 2017 for a summer vacation.
iv) Fourthly, even though the shipyard was closed until 14 August, "Songa argue that the deadline for any appeal under s.69 of the Act expired the following day on Tuesday 15 August".
v) Fifthly, it is asserted that until the Memoranda of Correction were published by the Tribunal on 14 August 2017, it was "difficult to DSME to make a decision in relation to the next issue as to whether an application for leave to appeal should be made under s.69 of the Act".
(iii) Whether the Respondent to the application or the arbitrator caused or contributed to the delay.
D2.2 The remaining factors (iv)-(vii)
(iv) Whether the respondent to the application would by reason of the delay suffer irremediable prejudice in addition to the mere loss of time if the application were permitted to proceed.
(v) 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.
(vi) The strength of the application
(vii) Whether in the broadest sense it would be unfair to the applicant for him to be denied the opportunity of having the application determined.
I trust the parties will be able to agree an Order consequential upon my judgment including as to costs which, prima facie, should follow the event.