In <span class="news-text_italic-underline">Eronat v CNPC International and another [2024] EWHC 2880 (Comm)</span>, the English Commercial Court reinforced the importance of adhering to contractual time limits in arbitration. The case involved a bespoke clause allowing appeals against arbitral awards under specific circumstances, with a strict 30-day time limit after the award was "rendered". The court’s interpreted "rendered" as the date the award was made, rather than when it was notified. This underscores the need for precision in drafting in order to reflect the parties’ intentions and compliance with procedural requirements in arbitration agreements.
The judgment serves as a reminder for parties to act promptly when challenging arbitral awards. Under arbitral rules like the LCIA Rules, appeals are generally excluded. Bespoke provisions in contracts can create exceptions, however these require clear drafting and a thorough understanding of how contractual terms interact with arbitral rules and the <span class="news-text_italic-underline">Arbitration Act 1996</span> (“<span class="news-text_medium">AA 1996</span>”).
Parties contemplating agreements which detract from the finality of arbitration should carefully evaluate how terms like "rendered" may be interpreted against the practical steps of the arbitration process. Timely action is crucial to avoid losing the right to appeal due to strict procedural context underpinning the interpretation exercise.
The case arose from a Deed of Indemnity between Friedhelm Eronat (the “<span class="news-text_medium">Claimant</span>”), CNPC International (Chad) Ltd and Cliveden Petroleum Co. Ltd (the “<span class="news-text_medium">Defendants</span>”), and a third party, CITIC Energy Inc. The Indemnity, governed by Hong Kong law, formed part of a transaction where the First Defendant acquired a stake in the Second Defendant from the Claimant. Subsequently, Carlton Energy Group LLC, a third party, entered into an agreement with the Second Defendant for oil and gas exploration in Chad. After disputes over unpaid sums, Carlton initiated arbitration, resulting in a settlement under which the Second Defendant was ordered to pay $324.65 million. The Defendants then sought to recover this amount from the Claimant under the Indemnity.
The arbitration was London-seated under LCIA Rules. On 11 April 2024, the tribunal issued an award finding the Second Defendant entitled to indemnification. The parties were notified of the award on 16 April 2024.
The Indemnity included a bespoke clause allowing appeals on material errors in fact or law, provided the appeal was "brought within thirty (30) days after the decision is rendered". The Claimant filed an appeal on 16 May 2024, 30 days after notification but 35 days after the award was made.
The court held that the time limit began on 11 April 2024, when the award was made. The court found that "rendered" is intrinsically linked to the making of the award, consistent with both the LCIA Rules and the AA 1996, and therefore the Claimant’s argument was “hopeless”:
The court refused to grant a retrospective extension for filing the appeal, citing a lack of jurisdiction due to the parties’ waiver of rights under the AA 1996. Even if jurisdiction existed, the court emphasised the importance of finality in arbitration and the need for "utmost expedition" in the arbitral processes. The court subsequently granted the Defendants' application to enforce the award.
