No need to reserve the right of appeal under s. 69 of the Arbitration Act

18/11/22

The Court of Appeal has, earlier this month, refused permission to appeal the judgment of the Commercial Court (Picken J) in National Iranian Oil Company (“NIOC”) v Crescent Petroleum (“Crescent”).  The appeal was only concerned with the decision of Picken J to reject Crescent’s jurisdictional objection that NIOC had waived its right to appeal on a point of law against an arbitral award, under s. 69 of the Arbitration Act 1996.

Crescent’s jurisdictional objection related to an arbitration clause containing its own ad hoc procedural rules of the arbitration but providing that in case of gap in such rules, the ICC Arbitration Rules applied. 

It argued that there was a gap in the ad hoc procedural rules, which did not make any provision in respect of the parties’ right to appeal an award on a point of law, so that the exclusion of such right provided for at Article 28.6 of the ICC Arbitration Rules[1] applied.

The Judge recalled the well-established principles that albeit an agreement to exclude the right of appeal could be incorporated by reference (Sukuman Limited v Commonwealth Secretariat [2006] EWHC 304 (Comm)) and made with no express reference to s. 69, sufficiently clear wording was necessary (Shell Egypt West Manzala v Dana Gas [2009] EWHC 2097 (Comm)).

On the facts of Crescent’s objection, he found that there was no sufficiently clear wording:

• It was not a gap for the arbitration clause not to contain any provision on the right of appeal, which does not form part of the “procedural rules relating to the conduct of the arbitration” but rather, of the “procedural rules concerned with an arbitral appeal”.
• It did not follow from the principle that parties needed expressly waive the right of appeal that they must explicitly reserve such right.  He noted that:

 “The default position…is that there is a right of appeal not the other way round; as such, it is wholly unnecessary and unrealistic to expect that the parties should have explicitly to reserve the right.”

In rejecting Crescent’s appeal, the Court of Appeal also highlighted that the Judge’s interpretation was reinforced by the fact that the parties had not chosen a seat of arbitration at the time when they entered into the arbitration agreement. The Court of Appeal appeared to imply that this was significant because the right of appeal is generally a matter falling to be determined by the law of the seat of arbitration.

The judgment of the Commercial Court is here.