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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Broda Agro Trade (Cyprus) Ltd v Alfred C Toepfer International GmbH [2010] EWCA Civ 1100 (11 October 2010) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2010/1100.html Cite as: [2011] 2 All ER (Comm) 327, [2011] 1 Lloyd's Rep 243, [2011] CP Rep 3, 132 Con LR 1, [2010] EWCA Civ 1100, [2011] Bus LR 825

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IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
MR JUSTICE TEARE
[2009] EWHC 3318 (Comm)

		Royal Courts of Justice Strand, London, WC2A 2LL
		11/10/2010

Lord Justice Stanley Burnton :

Introduction

1. In these proceedings, the Appellant ("Broda") seeks:

i) a declaration at common law, or alternatively under section 72 of the Arbitration Act 1996 ("the Act"), that there is no valid arbitration agreement as between it and the Respondent ("Toepfer") such that the interim arbitration award dated 3 July 2008 by the GAFTA Arbitration Tribunal is not binding on it; or, alternatively,

ii) pursuant to section 80(5) of the Act, an extension of time to make an application under section 67 and an order setting aside the interim award by reason of the arbitration tribunal having lacked substantive jurisdiction.

2. On 17 December 2009 Teare J dismissed Broda's claims, but granted permission to appeal.
3. The appeal raises a short but interesting point on the interpretation and effect of section 72 of the Arbitration Act 1996, which surprisingly has not been the subject of previous judicial authority.

The facts in summary

4. On 31 October 2007 the Respondent ("Toepfer") commenced GAFTA arbitration proceedings against Broda claiming damages for breach of an alleged contract, which included a GAFTA arbitration agreement providing for arbitration in London, said to have been concluded in February 2007 and varied in July 2007, for the supply by Broda to Toepfer of a quantity of milling wheat.
5. Broda maintains that no concluded contract was made.
6. On 3 January 2008, Toepfer presented its Claim Submissions to GAFTA claiming damages against Broda in the sum of US$5,462,668.35. Broda responded on 31 January 2008 by letter of that date from Argyrou & Co, described as Advocates and Legal Consultants, of Larnaca in Cyprus and signed by "Christos Konstantinou LL.B. (Hons), Dipl., Barrister". It denied there was a contract, and the letter gave brief reasons for that contention. It stated that Broda had its principal place of business in Russia, and had therefore commenced legal proceedings in its courts seeking a declaration that no binding contract had been concluded.
7. By letter dated 15 February 2008, GAFTA informed Broda and Toepfer that the chairman of the arbitral tribunal had decided that they would make a separate decision on its jurisdiction, and gave directions for submissions on this issue. Toepfer submitted and served its Reply Submissions, addressing Broda's contentions, on 3 March 2008.
8. By letter dated 14 March 2008, the chairman of the tribunal offered Broda the opportunity to submit Rejoinder Submissions. Argyrou & Co responded by letter dated 23 March 2008. It emphasised that its letter did not constitute a reply to Toepfer's submissions; it stated that the Russian Courts were the most appropriate jurisdiction to determine whether the arbitrators had jurisdiction, and requested GAFTA not to accept jurisdiction.
9. Argyrou & Co wrote again on 7 June 2008. They informed GAFTA that the Court of the Russian Federation had decided that Broda and Toepfer had never entered into a binding contract. In paragraph 5 of the letter they stated that the judgment of the Russian Court would be presented to GAFTA and that the reasoning of the Russian Court "should play an integral part in a decision by GAFTA to decline jurisdiction in this case".
10. As mentioned above, on 3 July 2008 the arbitral tribunal issued their Interim Award on jurisdiction. They concluded that there was a binding contract. The tribunal noted the decision of the Russian court but disagreed with it. They therefore ruled that they had jurisdiction to determine the substantive dispute and gave directions for submissions by both parties on the substantive dispute.
11. On 3 September 2008 Broda served and filed Respondents' Submissions in Response to those of Toepfer dated 3 January and 3 March 2008. In those Submissions, Broda reiterated its case that there had been no binding contract. Their Conclusions stated:

1. The Respondents deny that the Claimants are entitled to the damages sought since no valid and binding contract was made between the Parties, there is no ground for recovery of alleged damages and no evidences were presented before the Tribunal in order to confirm the contract or the breach of the contract.

2. The Respondents request the Tribunal to recognise the alleged contract as non-concluded.

…

12. On 23 September 2008 Toepfer presented Reply Submissions.
13. On 29 October 2008 Broda wrote to GAFTA seeking removal of the tribunal on the grounds that, since the tribunal had determined in the interim award that there was a contract, "it renders any attempt of Broda to defend the substantive claim futile". Doubts were also expressed as to the impartiality and competence of the tribunal. GAFTA replied on 31 October 2008 to the effect that the request for removal was denied.
14. On 10 November 2008 Broda presented a Respondents' Rejoinder. It again contended that there had been no concluded contract.
15. As mentioned above, the arbitral tribunal's Final Award is dated 19 February 2009. In it, the tribunal stated that it had read the judgment of the Russian Court and "having given careful consideration to the judgment … the Tribunal continues to hold that it reached the correct decision on jurisdiction as set out in our Interim Award". The tribunal addressed the substantive dispute and found that Broda had acted in breach of contract. Damages in the sum of US$5,462,668.25 were awarded together with interest and costs.
16. On 31 July 2009 Teare J gave permission to Toepfer to enforce the Final Award subject to an application by Broda to set aside his order within 28 days of service.
17. On 12 August 2009, Argyrou & Co presented Broda's Appeal Submissions. They included reference to the Act. They contended that there had been no binding contract. They asked the Board of Appeal to set aside the award dated 19 February 2009 and to recognise the contract "as non-concluded and void".
18. On 7 September 2009 Broda applied to the Commercial Court to set aside Teare J's order giving permission to enforce the award and wrote to GAFTA requesting a stay of the appeal pending the application to this court. On 17 September 2009 a stay was refused. On 8 and 10 November 2009 Broda and Toepfer served further submissions in the GAFTA appeal.
19. Meanwhile, on 2 October 2009 Broda issued its application for the relief summarised at paragraph 1 above. As mentioned above, on 17 December Teare J dismissed its claims.

The statutory provisions

20. The Arbitration Act 1996 was enacted following the Report on The Arbitration Bill of the Departmental Advisory Committee on Arbitration Law ("the DAC Report") chaired by Lord Saville (who was then a judge of the Court of Appeal). The Act was intended to modernise our arbitration law in line with modern international practice. The long title of the Act states that its object is "to restate and improve the law relating to arbitration pursuant to an arbitration agreement, …". The Act is essentially a code of our consensual arbitration law.
21. Section 67 is as follows:

67.— Challenging the award: substantive jurisdiction

(1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court—

(a) challenging any award of the arbitral tribunal as to its substantive jurisdiction; or

(b) for an order declaring an award made by the tribunal on the merits to be of no effect, in whole or in part, because the tribunal did not have substantive jurisdiction.

A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3).

(2) …

(3) On an application under this section challenging an award of the arbitral tribunal as to its substantive jurisdiction, the court may by order—

(a) confirm the award,

(b) vary the award, or

(c) set aside the award in whole or in part.

(4) The leave of the court is required for any appeal from a decision of the court under this section.

22. Section 73, referred to in subsection (1), provides that a party loses the right to object to (among other matters) the tribunal's lack of substantive jurisdiction if he knew or should have known of that matter but took part in the proceedings without making his objection. It has no application to the present case. Section 70, so far as material to the present case, is as follows:

70.— Challenge or appeal: supplementary provisions.

(1) The following provisions apply to an application or appeal under section 67, 68 or 69.

(2) …

(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.

23. Section 72 provides:

72.— Saving for rights of person who takes no part in proceedings.

(1) A person alleged to be a party to arbitral proceedings but who takes no part in the proceedings may question -

(a) whether there is a valid arbitration agreement

……………

……………

by proceedings in the court for a declaration or injunction or other appropriate relief.

24. Section 80 among other things confers power on the Court to extend time limits for legal proceedings:

80.— Notice and other requirements in connection with legal proceedings.

…

(4) References in this Part to making an application or appeal to the court within a specified period are to the issue within that period of the appropriate originating process in accordance with rules of court.

(5) 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.

…

25. "Substantive jurisdiction" is defined in section 82(1):

"substantive jurisdiction", in relation to an arbitral tribunal, refers to the matters specified in section 30(1)(a) to (c), and references to the tribunal exceeding its substantive jurisdiction shall be construed accordingly.

Section 30(1) provides:

(1) Unless otherwise agreed by the parties, the arbitral tribunal may rule on its own substantive jurisdiction, that is, as to—

(a) whether there is a valid arbitration agreement,

(b) whether the tribunal is properly constituted, and

(c) what matters have been submitted to arbitration in accordance with the arbitration agreement.

The issues between the parties

26. Before the judge, Broda contended that it had never entered into the arbitration agreement for which Toepfer contended. It had expressed its objection to the substantive jurisdiction of the tribunal, but had not taken part in the proceedings of the tribunal in which it considered whether it had substantive jurisdiction and found, by its Interim Award, that it did have such jurisdiction. It had only participated in the tribunal's proceedings following that award, when it considered whether Toepfer had established a breach of contract on the part of Broda and if so to what relief Toepfer was entitled. On its true construction, the reference in section 72 to a party "who takes no part in the proceedings" is to a party who does not take part in the proceedings in which the tribunal decides whether it has substantive jurisdiction. Broda is such a party, since it only took part in the substantive proceedings. It follows that it was and is entitled to question the substantive jurisdiction of the arbitral tribunal by proceedings under section 72. Alternatively, given that this is a case in which, if Broda's contentions are well-founded, Toepfer seeks to enforce an award under a non-existent contract, in all the circumstances it was just and appropriate to extend its time to make an application under section 67. It was common ground that the time to make an application under section 67 expired on 31 July 2008, 28 days after the publication of the Interim Award on jurisdiction. The application to extend time was made on 2 October 2009. Thus the required extension of time was approximately 14 months.
27. Toepfer contended:

i) Section 72 applies to a party who has taken any part in the arbitral proceedings, whether by way of a challenge to its substantive jurisdiction or in relation to the merits.

ii) In any event, Broda had taken part in the proceedings of the tribunal relating to its decision on its jurisdiction as well as its proceedings on the merits.

iii) It followed from (a) or (b) that Broda could not make an application under section 72.

iv) The Court should not extend Broda's time to make an application under section 67.

28. The judge held:

i) Broda had not taken part in the proceedings of the tribunal leading to its Interim Award on jurisdiction so as to exclude its right to make an application under section 72.

ii) However, the requirement in section 72 that the person had taken no part in the proceedings applied to the proceedings of the tribunal on the merits as well as its proceedings in relation to its substantive jurisdiction. Since it was common ground that Broda had participated in the proceedings on the merits, it followed that it could not make an application under section 72 to challenge the arbitrators' awards.

iii) Broda was not entitled to an extension of time in which to make an application under section 67.

iv) It followed that the tribunal's awards were binding on Broda.

29. Before this Court, Broda contended that the decision of the judge as to the effect of section 72 was wrong, and that the judge had wrongly exercised his discretion in refusing to extend time for the purposes of its application under section 67. Toepfer challenged decision (i).

The contentions of the parties

30. For Broda, Mr Flynn QC submitted that section 72 is concerned with challenges to the jurisdiction of the arbitrators, not with the exercise of their substantive jurisdiction. Its terms mirror those of section 30, which brought into English law the doctrine of kompetenz kompetenz, i.e., that the arbitral tribunal has jurisdiction to determine its own jurisdiction. It follows that the reference in section 72 to a person taking part in the proceedings is a reference to its taking part in the proceedings relating to its substantive jurisdiction. He submitted that interpretation of the section is supported by the commentary in the DAC Report, and by the judgment of Clarke J, as he then was, in Caparo Group Ltd v Fagor Arrasate Sociedad Cooperative [2000] ADRJ 254. In addition, he pointed out that submission to arbitration involves a waiver by a party of its rights under Article 6 of the European Convention on Human Rights to a public hearing; such a waiver requires informed and unequivocal conduct by that party, which, if there was no arbitration (which must be the hypothesis for determining the effect of section 72), there had not been.
31. For Toepfer, Miss Masters submitted that the words of section 72 are clear, and that Broda was seeking to introduce an unjustified limitation on them.
32. In relation to the extension of time for an application under section 67, Mr Flynn submitted that the judge had erred in the exercise of his undoubted discretion by failing to have regard to Broda's rights under Article 6, by failing to apply the criteria set out in Kalmneft v Glencore [2002] 1 Lloyd's Rep 128 or to give proper weight to the facts of the case, had failed to apply the criteria in CPR Part 3.9 and failed to apply the overriding objective.
33. Miss Masters submitted that Broda had not shown that the judge had made any error of law in exercising his discretion, had taken all relevant considerations into account and reached a decision that was open to him and justified in the circumstances of the case.
34. Finally, Miss Masters submitted that the correspondence on behalf of Broda with the tribunal amounted to its taking part in the arbitral proceedings relating to jurisdiction, so that even if its contentions as to the effect of section 72 are well-founded, it was nonetheless precluded from making an application under that section.
35. Mr Flynn submitted that the judge had correctly concluded that Broda had not taken part in the proceedings as to the jurisdiction of the tribunal.

Discussion

36. There are three issues before this Court:

i) What is the scope of the requirement for an application under section 72 that the person has taken no part in the proceedings?

ii) Did Broda take part in the arbitral proceedings in which the arbitral tribunal considered and determined its substantive jurisdiction?

iii) Did the judge err in his exercise of his discretion by refusing to extend time for Broda's application under section 67?

The scope of section 72

37. Mr Flynn is of course correct that section 72 is concerned with the jurisdiction of the arbitrators. But in my judgment, its wording is clear. I see no basis for an implied restriction of the words "takes no part in the proceedings" to the proceedings relating to the determination of the substantive jurisdiction of the arbitrators. The purpose of the requirement is clear. A person who considers that he has not entered into an arbitration agreement is entitled to ignore its proceedings. He is entitled to say, in effect, that the arbitral proceedings are nothing to do with him. If he takes that course, his rights to claim relief from the court cannot be restricted because he did not participate in those proceedings. If, on the other hand, he participated in the proceedings, whether in relation to the jurisdiction of the arbitrators or in relation to the exercise of their asserted substantive jurisdiction, and is disappointed by their decision, he can fairly be required to bring proceedings to challenge their award within the limited time applicable to an application under section 67, which in any event may in an appropriate case be extended by the court.
38. I would more readily understand a provision restricted to limiting the rights of a party who participated in the substantive proceedings of the arbitrators than a provision restricted to limiting only the rights of a party who participated only in their jurisdictional decision. The principle in favour of not limiting the rights of a party who challenges the jurisdiction finds expression in section 33 of the Civil Jurisdiction and Judgments Act 1982, which provides that a person who appears before a foreign court for the purpose only of contesting its jurisdiction is not to be regarded as having submitted to the jurisdiction. A party who contests the merits before arbitrators will, in practice, dispute the substantive award only because he is aggrieved or disappointed by their decision on the merits. I see no reason why such a party should not be required to challenge the validity of the award within a limited time.
39. Mr Flynn is wrong in suggesting that the principle of kompetenz kompetenz was introduced into English law by section 30 of the Act. Arbitrators have always had the jurisdiction (perhaps more accurately a power), subject to any contrary provision in the arbitration agreement (which would be very unusual) to decide whether they have jurisdiction; but their decision as to whether or not they had jurisdiction was never binding on the parties. It was always open to a party to apply to the court for a declaration that the tribunal did have, or did not have, the contested substantive jurisdiction. The DAC Report stated, in relation to Clause 30 of the draft Bill, which became section 30 of the Act:

137. This Clause states what is called the doctrine of "Kompetenz-Kompetenz". This is an internationally recognised doctrine, which is also recognised by our own law (e.g., Christopher Brown v Genossenschaft Osterreichlischer Waldbesitzer [1954] 1 QB 8), though this has not always been the case.

40. In my judgment, the reason that section 72 is concerned with jurisdictional issues is that it is only in relation to such issues that the Court has unqualified jurisdiction. A decision of a tribunal as to the existence or scope of its jurisdiction, or as to the regularity of its constitution, is not binding on the court. If an application under section 72, or under section 67, is made by a party to an arbitration, the court determines the issue raised by that party on the basis of the facts and law as found by the court. Thus, in principle, a decision by an arbitral tribunal in the exercise of its kompetenz-kompetenz jurisdiction is subject to unqualified review by the court. It is necessary to contrast such issues with those determined by an arbitral tribunal in the exercise of its substantive jurisdiction, i.e. in its award on the merits. In the absence of any serious irregularity, the parties are bound by the tribunal's findings of fact, and there can be an appeal to the court only on a point of law subject to the restrictions set out in section 69.
41. I do not think that the DAC Report or the judgment of Clarke J in Caparo Group Ltd v Fagor Arrasate Sociedad Cooperative bear the weight Mr Flynn seeks to put on them. Paragraph 295 of the Report is as follows:

295 To our minds this is a vital provision. A person who disputes that an arbitral tribunal has jurisdiction cannot be required to take part in the arbitration proceedings or to take positive steps to defend his position, for any such requirement would beg the question whether or not his objection has any substance and thus be likely to lead to gross injustice. Such a person must be entitled, if he wishes, simply to ignore the arbitral process, though of course, (if his objection is not well-founded) he runs the risk of an enforceable award being made against him. Those who do decide to take part in the arbitral proceedings in order to challenge the jurisdiction are, of course, in a different category, for then, having made that choice, such people can fairly and properly be required to abide by the time limits etc that we have proposed.

The reference to proceedings and the arbitral process in the second and third sentences are general in terms. I do not infer from the last sentence that the authors thought that the proposed provision would only apply to someone who had participated in a challenge to the jurisdiction of the arbitrators: they referred to such a case as the most likely situation in which the exclusion would apply.

42. My view as to the effect of section 72 is supported by Lord Mustill and Stewart Boyd QC in Commercial Arbitration, which is I think generally recognised as the leading textbook. In their commentary on section 72, at page 361, they state:

It is, we think, clear that a person takes part in arbitral proceedings not only by taking steps to contest the merits, but also by simply taking steps to challenge the substantive jurisdiction of the tribunal.

43. It is significant that the learned authors put the matters this way round: c.f. my comment in paragraph 38 above. The text refers to footnote 11:

This appears to be the view of the DAC: see its report of February 1996, para 295. We do not read this paragraph as indicating that the Arbitration Act 1996 s 72 applies only to a person who has an objection to the jurisdiction, although this is the only case mentioned there.

44. Similarly, Merkin, Arbitration Law at paragraphs 9.30 to 9.33, draws no distinction between participating in the arbitral proceedings as to jurisdiction and as to its substantive award.
45. In Caparo Group Ltd v Fagor Arrasate Sociedad Cooperative the ICC arbitration agreement was contained in a contract between Fagor and CML, an indirect subsidiary of Caparo. Fagor commenced ICC arbitration proceedings against Caparo and CML. Caparo's solicitors wrote to the ICC as follows:-

We are instructed on behalf of Caparo and [CML]. We respond to the request for arbitration as follows:

1. The relevant contract is dated 26^th August 1994. The parties to the contract are … Fagor and [CML].

2. Caparo is not a party to the contract, is therefore not a party to the arbitration agreement … and accordingly the request for arbitration involving Caparo should be rejected. There is no jurisdiction.

3. The position of [CML] on the issue of jurisdiction is set out below.

46. Caparo played no further part in the arbitration. It sought a declaration that it was not subject to the arbitral jurisdiction. Not surprisingly, Clarke J held that it had not participated in the arbitral proceedings. He said:

It appears to me that Caparo were simply saying, through Berwin Leighton: "It has nothing to do with us. The ICC has no jurisdiction."

Since Caparo had not taken any part in the substantive arbitral proceedings, Clarke J did not have to consider, and did not consider the effect of a party participating in the substantive proceedings but not in the proceedings of the arbitral tribunal relating to jurisdiction.

47. Mr Flynn pointed to the difference between the wording of section 67 and that of section 72. Section 72 refers to "A person alleged to be a party to arbitral proceedings", whereas section 67 refers to "A party to arbitral proceedings …" I think there is nothing in this. Section 72 refers to a person alleged to be a party to arbitration proceedings because, ex hypothesi, he has not taken part in them. A person who has taken part in the arbitral proceedings, albeit that he disputes the jurisdiction, can sensibly be referred to as a party to them, and such a person must make his application under section 67.
48. Moreover, it is not to be assumed that arbitrators will always have separate proceedings and hearings, and give separate awards, on jurisdiction and substance. It would at least in some cases be difficult to distinguish between participation as to jurisdiction and participation as to the substance. Furthermore, the only real issue may be whether there was any binding contract between the parties. In such a case, the issue of jurisdiction and the merits may be inseparable. Indeed, to my mind the submissions of Broda in the present case in the arbitration, following the making of the tribunal's Interim Award, in which they disputed that there was any binding contract containing an arbitration agreement, demonstrate how artificial it may be to distinguish between participation as to jurisdiction and as to the merits.
49. I do not think that Article 6 helps Broda. It has the right of access to the court, under section 67, in proceedings in public resulting in a reasoned decision. Reasonable limitation periods, which of necessity if not complied with may preclude a person from establishing his rights, have always been recognised as compatible with Article 6. The time limit applicable to section 67, coupled with the power of the court in an appropriate case to extend time, in the context of arbitration, is in my judgment clearly compatible with Article 6. That power of the court means that the right of a party to challenge an arbitration award under section 67 is real, practical and not illusory.

Did Broda take part in the proceedings as to the jurisdiction of the arbitral tribunal?

50. My decision on the construction of section 72 makes it unnecessary to consider this issue, which is not straightforward. It may be difficult to distinguish between a letter that does no more than inform the arbitral tribunal, as a matter of courtesy, that the respondent does not accept its jurisdiction, and a submission that it has no jurisdiction. This is such a case. I say no more about it.

Extension of Broda's time to apply to the Court under section 67

51. In order to succeed on this issue, Broda must show that the judge erred in the exercise of his undoubted discretion. It is certainly a strong thing to shut a party out of making an application under section 67, since in a case such as the present the consequence is that that party is bound by an arbitration award under a contract that no court has decided was ever concluded.
52. The judge dealt with Broda's application for an extension of time in paragraphs 46 to 68 of his judgment. He referred to the guidance given by Colman J in Kalmneft v Glencore and addressed each of the considerations listed in paragraph 59 of the judgment in that case. In paragraph 51 of his judgment, Teare J said:

51. Broda's evidence, which has had to be corrected, is that it took advice from Russian lawyers only. Argyrou and Co. were only used to check documents drafted by the Russian lawyers for errors of grammar and syntax, to sign the documents and send them to GAFTA. In taking advice from Russian lawyers only I am unable to accept that Broda acted reasonably. Broda is a grain trader and has been such since 1994. It has concluded contracts with some of the largest and most reputable grain trading companies in the world. Its trading partners are located all over the world in England, France, Switzerland, Israel, Egypt, Morocco, Japan, Turkey and Singapore. On 3 January 2008 the claim in this case was advanced against Broda in London before GAFTA for the sum of $5,462,668.25. In my judgment it was unreasonable not to incur at that time the cost of obtaining the advice of an English lawyer in connection with such a claim before GAFTA in London. The Interim Award on jurisdiction was issued by the GAFTA tribunal in London on 3 July 2008. That award disagreed with the decision of the Russian court. If an English lawyer had not been instructed to advise before, he should have been instructed then. The Final Award on liability was issued on 19 February 2009. Even then an English lawyer was not instructed. It was not until 21 August 2009 that English lawyers were instructed. The application for an extension of time was then issued on 2 October 2009.

53. Paragraph 57 of Teare J addressed the issue of unfairness to Broda:

57. Whether in the broadest sense it would be unfair to the applicant for him to be denied the opportunity of having the application determined: Broda says that it would be unfair because it faces an award of $6m. in circumstances where it has not had its evidence on the question as to whether there was a contract considered by either the arbitration tribunal or the court. If one assumes that its claim that there was no contract is arguable this is an undoubted hardship. But the question is whether that hardship is unfair. Had Broda acted reasonably and appointed an English lawyer in either January or July 2008 an application under section 67 is likely to have been made within 28 days of the Interim Award on jurisdiction or very shortly thereafter. That is a simple step to have taken and would have avoided any hardship. By not instructing an English lawyer in relation to an arbitration in London Broda took a risk that the advice it received from Russian lawyers would not be appropriate or correct. Taking a broad view I am unable to say that it would be unfair for Broda to be denied the opportunity of having its application under section 67 determined.

54. Broda's submissions on this issue do not come close to showing that the judge made any error of law or principle in the exercise of his discretion. In my judgment, the judge carefully considered the relevant matters and reached a conclusion that was open to him. Indeed, it is difficult to see the practical point of a time limit if an extension as long as that required in the present case should be given to a commercial organisation such as Broda, which, faced with a very substantial claim in London, did not see fit to consult an English lawyer. I assume, in its favour, that Mr Konstantinou did not have access to a copy of the Act, to which reference was made in Broda's Appeal Submissions to GAFTA. But it must have been obvious that if the Interim Award was to be challenged, that had to be done in London.
55. Mr Flynn submitted that the judge's failure to refer to and to take into account Article 6 was an error of law. The judge was well aware that the effect of his decision was to preclude Broda from establishing before the court that it had not concluded the contract alleged by Toepfer and was therefore not liable to it. A reference to Article 6 would have added nothing.
56. I would uphold the decision of the judge refusing to extend time.
57. Broda seeks a declaration at common law that it was not bound by the arbitration agreement relied on by Toepfer. The restrictions in sections 67 and 72 on challenges to the jurisdiction of an arbitral tribunal cannot be circumvented by making a claim at common law: the jurisdiction of the court to make a declaration is subject to those restrictions. It follows that the claim for a common law declaration adds nothing.

Conclusion

58. For the above reasons, I would dismiss Broda's appeal.

Lord Justice Lloyd:

59. I agree that the appeal should be dismissed for the reasons given by Stanley Burnton LJ, and that it is unnecessary and inappropriate, as he says at paragraph 50, to deal with the issue raised by the Respondent's Notice.

Lord Justice Mummery

60. I also agree.