Arbitration - Dera Commercial Estate V Derya Inc

Challenge to arbitral award based on "inordinate delay"

The claimant appealed an arbitral award (which had dismissed its counterclaim) on points of law arising out of section 41(3) of the Arbitration Act 1996. That section provides that the tribunal can dismiss a claim if it "is satisfied that there has been inordinate and inexcusable delay on the part of the claimant in pursuing his claim". The judge held as follows:

The relevant limitation period (here, a shorter period of one year, agreed by the parties) was not "the" yardstick, but instead only "a" yardstick, albeit an important one: "The length of the relevant limitation period sets the context in which the nature of the period or periods of delay will be assessed, specifically whether the delay overall is inordinate or not. Whether or not delay is inordinate will always be a fact-sensitive exercise in each case". Although it would be wrong to dismiss a claim for want of prosecution where the limitation period had not yet expired, the fact that the parties have agreed a shorter limitation period demonstrates that they intended to proceed promptly with the arbitration. However, the judge also recognised that if the parties subsequently agree to extensions of time, that can be taken into account when...