Global Aerospares Limited v Airest AS [2023] EWHC 1430 (Comm)

Facts: The Claimant (Global Aerospace Ltd.) and the Defendant (Airest AS) concluded an agreement, which contained an arbitration clause with no procedure for the appointment of an arbitrator. The arbitration clause simply said: “This Agreement is subject to English jurisdiction. If a dispute cannot be settled by negotiation it shall be settled by arbitration in London.” A dispute arose out of the agreement and the Claimant served a request to appoint an arbitrator within 21 days thereafter. The Defendant did not reply to the request. The Claimant then filed an application pursuant to section 18 of the Arbitration Act 1996 (“the Act”), which provides for the Court to give directions where there is a failure of the procedure for the appointment of the arbitral tribunal.

The Defendant opposed the application and contested the Court’s jurisdiction to try the claim on the basis that the Court’s power under section 18 of the Act was not engaged. According to the Defendant, there had been no failure of the procedure for the appointment of the arbitral tribunal. It argued that the Claimant’s request to appoint an arbitrator was not a valid request within the meaning of section 16(3) of the Act, which provides that, if the tribunal is to consist of a sole arbitrator, the parties shall jointly appoint the arbitrator not later than 28 days after service of the request. In light of that provision, the Claimant’s request of arbitration was clearly defective for it stood for 21 days only.

Held: The judge (His Honour Worster) found that the request to arbitrate had not been properly served, and that the process for the appointment of an arbitrator had for that reason not been validly begun. Consequently, it could not be said that there had been a failure of a process that had not even been commenced. In circumstances where, because of a defective request to arbitrate, there has been no failure of the procedure for the appointment of an arbitrator, the court has no power to make an order under section 18 of the Act. Thus, in the The “Lapad” [2004] 2 Lloyd’s Rep. 109, Moore-Bick J. said: “It is clear that the court’s jurisdiction to exercise its powers under section 18 depends on two things: a failure of the contractual procedure for the appointment of the tribunal and the absence of agreement between the parties as to the steps to be taken as a result.” Relying on that case, the Judge concluded that “[i]f there has been no failure in the appointment procedure an application for directions under section 18 will fail.” The Claimant’s application was accordingly dismissed.

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