BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
IN THE MATTER OF THE ARBITRATION ACT 1996
AND IN THE MATTER OF AN ARBITRATION CLAIM
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Before :
MR JUSTICE CALVER
Between :
(1) V
(2) N
Claimants
– and –
K
Defendant
AND IN THE MATTER OF AN ARBITRATION UNDER THE LMAA RULES
Between :
K
Claimant
– and –
(1) V
(2) N
Respondents
Jacob Turner (instructed by Zaiwalla & Co) for the Claimants
Marcus Mander and James Bailey (instructed by Reed Smith) for the Defendant
JUDGMENT ON CONSEQUENTIAL MATTERS
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 14:30 on Friday 04 July 2025.
.............................
Mr Justice Calver :
On Monday 16 June 2025 the Court circulated to the parties its draft judgment for handing down on Wednesday 18 June at 10.30am. At the request of the Claimants, the Court agreed to extend the time for hand-down to Thursday 19 June. At 10.30am on 19 June 2025 the Court accordingly handed down judgment in this action, dismissing the Claimants’ challenges under sections 67 and 68 of the Arbitration Act 1996: [2025] EWHC 1523 (Comm) (the “Judgment”). The parties were unable to agree a draft order in the light of the Judgment and accordingly on 25 June 2025 the Court directed that the parties should lodge short written submissions on consequential matters by 4pm on Friday 27 June.
The issues which arise for decision in relation to consequential matters are said to be as follows:
Permission to appeal.
Costs, and specifically:
Whether costs should be awarded on the indemnity basis.
Whether the Defendant should have its costs of the application to extend time for applying to set aside the Bright J. Order (referred to in the draft order as the “Set Aside EOT Application”).
Whether there should be a summary or detailed assessment.
If the former, the amount of costs; and if the latter, whether there should be a payment on account and if so in what amount.
Time for payment (14 or 21 days).
I shall briefly state my conclusions on each of these matters.
Permission to appeal
The Claimants seek permission to appeal against (i) the Court’s dismissal of their application under s. 67 of the Arbitration Act 1996; (ii) the Court’s dismissal of their application under s. 68 of the Arbitration Act 1996; and also (iii) the Court’s decision to set aside service of the Claim Form.
As the Defendant rightly points out in its skeleton argument, there are three difficulties with this application.
First, no application for permission to appeal was made by the Claimants at the time judgment was handed down on 19 June 2025 and no adjournment of that hand-down hearing was sought by them. It is therefore too late to seek permission now: see CPR 52.3(2) and paragraph 4.1 of PD 52A; and see further McDonald v. Rose [2019] 1 W.L.R. 2828 (C.A.) at [9-21] per Underhill LJ, in which the judge set out the relevant principles as follows:
CPR r 52.3(2) provides as follows: “An application for permission to appeal may be made - (a) to the lower court at the hearing at which the decision to be appealed was made; or (b) to the appeal court in an appeal notice.” (emphasis added)
The date of the decision for the purposes of CPR r 52.12 (Footnote: 1) is the date of the hearing at which the decision is given, which may be ex tempore or by the formal hand down of a reserved judgment (Footnote: 2) (“the decision hearing”);
A party who wishes to apply to the lower court for permission to appeal should normally do so at the decision hearing itself (Footnote: 3).
If a party is not ready to make an application at the decision hearing it is necessary to ask for the hearing to be formally adjourned in order to give them more time to do so. As long as the decision hearing has been formally adjourned, any such application can be treated as having been made “at” it for the purpose of CPR r52.3(2)(a) (Footnote: 4);
If no permission application is made at the decision hearing, and there has been no adjournment, the lower court is no longer seized of the matter and cannot consider any retrospective application for permission to appeal.
A retrospective application for permission to appeal, where the judgment has been handed down and the hearing has not been adjourned, cannot be considered by the lower court: this is because the court has no jurisdiction to grant permission after the conclusion of the hearing at which judgment is handed down.
In the present case, the Claimants did not ask for an adjournment of the decision hearing (when the judgment was handed down) despite having plenty of time to do so. It is too late for them to seek permission to appeal from this court now: this court no longer has jurisdiction to grant permission.
The second problem with the Claimants’ application is that they have failed to provide any draft grounds of appeal. That is a breach of the Commercial Court Guide, paragraph J12.3: “If at the time judgment is given any party wishes to apply for permission to appeal to the Court of Appeal, that application should be supported by written draft grounds of appeal.” If a party is unable to articulate in succinct draft grounds of appeal why it says that the judgment is wrong then the court is very unlikely to conclude that an appeal has reasonable prospects of success or that there is any other compelling reason for the appeal to be heard. That is so here.
The third problem is that, even if it were open to the Claimants to make an application for permission to appeal, I would have refused that application in any event as it would have no reasonable prospects of success (and there is no other compelling reason for the appeal to be heard). As the Defendant rightly points out in its skeleton argument:
Any appeal against the court’s refusal to grant retrospective permission for service of the claim form (the reasoning for which is set out in paragraphs 156-176 of the Judgment) (a) is only of relevance if the Claimants succeed in setting aside the court’s judgment on section 67 or 68 of the Arbitration Act (and I consider that they cannot so succeed) and (b) is hopeless in any event for the reasons given by the court in paragraphs 167-175 of the Judgment, which are fact-specific to this particular case.
The appeal against the court’s decision on section 67 of the Arbitration Act is likewise hopeless and, moreover, was killed off by the Claimants’ own concession: see paragraphs 17 and 18 of the Judgment. The suggestion in the Claimants’ skeleton argument for this hearing that the Tribunal’s procedural rulings were “a breach of [its] contractual duties” (Footnote: 5) by reason of the matters set out in paragraph 51-52 thereof has no prospect of succeeding for the reasons set out in paragraphs 21-47 of the Judgment. Indeed, I consider that the submission should not have been advanced at all.
The appeal against the court’s decision concerning section 68 of the Arbitration Act also has no reasonable prospect of success. There was no duty of disclosure on Mr H, but even if there were, that factor is outweighed by eleven other factors such that, on the facts of this case, the fair minded and informed observer, having considered all of the facts, would not have concluded that there was a reasonable possibility that he was biased (Judgment, paragraphs 137-152). The Claimant simply re-argues its case in its lengthy skeleton argument at paragraphs [28]-[47], rather than putting forward concise grounds of appeal.
The central basis of the Claimants’ criticism of the court’s judgment on its section 68 appeal (since it puts it as its very first point) appears to be that “[t]he Court’s approach thus involved stepping into the shoes of the Tribunal by in effect re-assessing the Tribunal’s individual decisions and then deciding whether the Court would have reached the same outcome, which it ought not to have done” (paragraph 33 of their skeleton argument). But that is wrong: that is not what the Court did, nor did it need to do that. Nor did the court “work backwards from the Tribunal’s actual decisions to establish whether they were correctly made” (ibid, paragraph 35). Rather, the court explained that there was no merit whatsoever in the Claimants’ criticisms of what were perfectly routine procedural rulings by the Tribunal in an arbitration: see for example paragraph 33 of the Judgment.
In any event, the Claimants would have to succeed on their appeal against the decision to set aside service as well as their section 68 appeal in order to succeed overall. They cannot do so.
Costs
The section 67 challenge should not have been made. It was hopeless and effectively abandoned at the hearing (Judgment, paragraphs 17-18). Moreover, numerous grounds of challenge alleging apparent bias, which had been advanced in the Claimants’ witness evidence, were abandoned on the morning of the second day of the hearing, leaving only one ground standing: see paragraphs 16-18 of the Judgment. I also take into account the matters relied upon by the Defendant in paragraph 8 of its skeleton argument. These factors take this case “out of the norm” and justify, at least in part, an order for indemnity costs. In the circumstances of this case, I consider that a fair costs assessment is that the Claimants should pay 70% of the Defendant’s costs on an indemnity basis and 30% on the standard basis.
The Claimants contend that I should, however, disallow the Defendant’s costs of its application to extend time for challenging the order of Bright J, by reason of the fact that it was not the Claimants’ fault that the application was filed late.
This came about as follows. The Defendant was required to file and serve its application to set aside the Bright J. Order by 4pm on Friday 25 October 2024. On that date, the Defendant filed and served a single application notice and evidence addressing both its applications to set aside the Claim Form for invalid service and to set aside the Bright J. Order. Although the Defendant’s application notice and witness evidence were filed prior to the 4pm deadline, due to technical issues relating to the size of the exhibits, the Defendant served the application four minutes late and the exhibits a few hours later. The Claimant took the point that service was late and so the Defendant applied for a retrospective extension of time to serve its application to set aside the Bright J. Order and for relief from sanctions.
It is fair to state that since the Defendant left it until the last moment to file and serve its application, it took the risk that something might go wrong with its filing and service. That stated, it is also fair to state that this was only a relatively minor breach of a court’s order. In these circumstances I consider that the fair order is that there should be no order as to the costs of the Defendant’s application for relief from sanctions.
Detailed or summary assessment?
I consider that the costs should be summarily assessed by this court after the conclusion of this section 67/68 appeal. No sensible purpose would be served in forcing the parties to incur the delay and further costs involved in a detailed costs assessment.
The Defendant has submitted a statement of costs in the total sum of £261,295. Inevitably, summarily assessing costs is a rough and ready exercise, particularly where I have decided that the Defendant should not recover the costs of its relief from sanctions application and should otherwise recover 70% of its costs on the indemnity basis and 30% on the standard basis.
The Defendant’s costs amount to £261,295. I reduce the sum claimed to £245,000 to take account of the relief from sanctions application. I then apply the indemnity/standard costs split described above to arrive at a summary assessment of the Defendant’s costs, payable by the Claimants, at £200,000. These costs are to be payable within 14 days, as the Claimants have had plenty of time since the hand down to accommodate any logistical difficulties of transferring sums to their solicitors.