Northfield Property Solutions Limited v Andrew Dykes & Anor

MRS JUSTICE O'FARRELL :

1. This matter concerns a challenge to the Partial Arbitral Award of Mr Mark Thomas dated 27 August 2024. At the start of these proceedings there were two applications before the court: i) Firstly, the Defendants’ application dated 19 December 2024, challenging jurisdiction and seeking: (a) setting aside of the purported service of the arbitration claim form and accompanying grounds of appeal on the defendants; (b) declaring that the Court has no jurisdiction; (c) setting aside the order dated 14 October 2024 granting permission to extend time for issue to 4 October 2024; and (d) costs. ii) Secondly, the Claimant’s application dated 23 December 2024 for: (a) an order extending time for the issue of proceedings from 24 September 2024 to 20 November 2024; and/or (b) an extension of time for service of the claim form to 26 November 2024; and (c) provision for costs.

2. Some of the issues have fallen away given the more recent evidence filed by the Claimant. As I indicated to the parties at the start of this hearing, as far as the court is concerned, the substantive issue before the Court is whether or not there should be an extension of time for the issue of the claim form beyond the 28-day statutory period. Background Facts

3. The background to this dispute can be summarised as follows. On or around 6 July 2020 the parties entered into a JCT Minor Works Building Contract with Contractor's Design (2016 Edition) for the Claimant to carry out the partial demolition, reconstruction and extension of the main entrance over two floors of the Defendants’ property for the sum of £117,579.93. A dispute arose between the parties as to progress of the works.

4. On 7 December 2020, the Defendants served a notice of default under the contract. The Defendants’ position was that the requirements of that notice were not satisfied and on 15 December 2020, the Defendants served a termination notice. The Claimant disputed the validity of the termination notice.

5. On 8 July 2022, the Defendants served a notice of arbitration. There were a number of delays to the arbitral process, as a result both of procedural disputes and the Arbitrator’s personal difficulties.

6. The Award was dated 27 August 2024 and was released to the parties on 3 September 2024 following payment of the Arbitrator’s fee by the Defendants.

7. The Arbitrator found that the termination notice was valid on the ground that the Claimant had failed to advance the plumbing design and failed to provide the requested details of the cylinder and radiator sizing within the timetable set out in the default notice.

8. At paragraph 94 of the Award, the Arbitrator turned to consider what was then identified as issue 2, namely: “Did NPS fail to advance the plumbing design and fail to provide the details of the cylinder and radiator sizing within the time requirement set out in the default notice?” The Arbitrator found at paragraph 95 that it was common ground between the parties that NPS was responsible for the design and installation of the heating and electrical services by virtue of the Contractor’s Design Portion Supplement. The provisions of the contract specifications included in relation to the heating and plumbing, the following: “All plumbing and heating installations formed part of the Contractor’s Design Portion and are to be designed and implemented by the Contractor following the sign off of their schematic drawing and specifications”.

9. At paragraph 100 of the Award the Arbitrator stated: “I have seen no evidence that NPS ever prepared either a schematic design or a specification for the plumbing works it intended to install”.

10. At paragraphs 115-116, the Arbitrator stated: “The Dykes’ case is that NPS failed to proceed regularly and diligently with the design of the contractor’s design portion. It then issued the notice in which it set out the specified defaults which it required to be rectified within seven days, namely the advancement of the CDP for the plumbing and the confirmation of the sizing of the hot water cylinder and radiators. On 15 December it issued the termination notice which recorded that NPS had not complied with that improvement notice. On balance, I prefer the Dykes’ interpretation of events.

11. At paragraphs 119-120, the Arbitrator stated: “Although some information was supplied by NPS to Witcher on 14 December 2020 regarding the size of the cylinder, at paragraph 111 of his first witness statement, Mr Betsy records that the information requested by Witcher was supplied to the Dykes on 18 December 2020. That response was too late because the termination notice had been served on 15 December 2020. I therefore find, in answer to Issue 2, that NPS failed to advance the plumbing design and failed to provide the requested details of the cylinder and radiator sizing within the timetable requirement set out in the default notice IN 2”.

12. The Claimant, on receipt of the Award, sought legal advice upon it, as it considered that the Tribunal had overlooked and accordingly failed to take into account evidence that was before it which contradicted the Tribunal’s conclusions in the Award.

13. On 13 September 2024, the Claimant wrote to the Tribunal and to the Defendants, setting out its observations as to perceived errors in the Award and asking the Arbitrator to consider its further submissions. A response from the Defendants was received on 24 September 2024, objecting to any further review. On 13 October, the Arbitrator indicated that he saw no grounds for correction of the Award. The Arbitration Claim

14. It is common ground that in accordance with section 70(3) of the Arbitration Act 1996 , the statutory 28-day period for a challenge to the Award for serious procedural irregularity under section 68 of the Act expired on 24 September 2024.

15. A draft Arbitration Claim Form, seeking to challenge the Award under section 68(2) (a) of the Act , on the basis that the Tribunal failed to comply with its duty under section 33 of the Act , was dated 24 September 2024. As that was the latest day on which the Claim Form could be issued, an application without notice was made, quite properly, requesting an extension of time to 1 October 2024.

16. Unfortunately, this is where things started to go wrong. The Claim Form was filed incorrectly, initially on 24 September and then again on 4 October 2024. As explained by court staff in communications dated 3 October and 8 October 2024, exhibited to Mr Sutton’s third witness statement served on 23 September 2025, the Claim Form needed to be filed on the CE file system as a Part 8 Claim so as to generate the appropriate fee to be paid for the start of the proceedings. That had not been done and, as a result, an incorrect fee had been paid, for which there is evidence in the documents exhibited to Mr Sutton’s statement.

17. Further, as the Claim Form was now being issued beyond the expiry date for challenge to the Award, the Claimant needed to make any application for an extension of time on notice to the Defendants (within the Claim Form) so that they would have an opportunity to oppose it, as provided in CPR 62.9.

18. On 8 October 2024, the Claimant managed to file correctly on CE file the Arbitration Claim Form in these proceedings, seeking to challenge the Award under section 68(2) (a) of the Act . Additionally, an application notice dated 4 October 2024 was also filed, seeking an extension of time for issue of the Claim Form to 4 October 2024. Contrary to the requirement of CPR 62.9(3), the application for an extension of time was not made on notice to the Defendants.

19. On 9 October 2024, the Claim Form and application notice were recorded as filed on 8 October 2024 on CE file.

20. On 14 October 2024, an order for an extension of time for issue of the Claim Form to 4 October 2024 was approved by Joanna Smith J. As this was made without notice to the Defendants, they would have been entitled, if they had known about it, to ask the Court to review, revise or set aside the order. In any event, in this case the Arbitration Claim Form was filed with the Court after 4 October 2024. Therefore, on any view, the Claimant would need to seek a further extension of time.

21. Unfortunately, it appears that a court seal was not affixed to the Claim Form on 8 or 9 October 2024, whether by administrative error or malfunction of the system. That was confirmed on 20 November 2024 by court staff in a telephone conversation with Mr Sutton of Clive Sutton solicitors, acting for the Claimant. It also appears that the seal on the Claim Form was then backdated to 8 October 2024, without anyone appreciating the impact that it would have on the time for service.

22. Thereafter, Mr Sutton took prompt steps to inform Mr Thornton of Wilsons solicitors, acting for the Defendants, of the position. Mr Thornton agreed that service could be effected by email.

23. On 26 November 2024, the Claim Form was served on the Defendants.

24. On 9 December 2024, the Defendants acknowledged service and indicated that they would challenge jurisdiction. The Defendants’ application challenging jurisdiction was issued on 19 December 2024.

25. Mr Williams, counsel for the Claimant, suggests that the Defendants should have acted earlier in order to apply to set aside the Order of 14 October 2024. However, in circumstances where the Claim Form appeared to have been issued on 8 October 2024, the clear issue for the Defendants at that time was whether it had been served out of time and, if so, whether that gave them a ground for challenging jurisdiction. Having indicated that a challenge to jurisdiction would be made pursuant to CPR 11, I accept Mr Dawson’s explanation that a separate application seeking to set aside the order of 14 October was not made in order to preclude any suggestion that they had submitted to the jurisdiction of the Court. Service of the Claim Form

26. The Claimant made its application for an extension of time, either for issue and/or service of the Claim Form by application dated 23 December 2024.

27. CPR 62.4(2) provides that, unless the Court orders otherwise, an arbitration claim form must be served on the defendant within one month from the date of issue and rules 7.5 and 7.6 are modified accordingly.

28. As set out in Mr Dawson’s skeleton for the Defendants, on its face the Claim Form appeared to have been served out of time. It was marked as having been issued on 8 October 2024 and was served on the Defendants’ solicitors on 26 November 2024.

29. However, as is now realistically acknowledged by Mr Dawson, the recent third witness statement of Mr Sutton dated 23 September 2025 and the documents exhibited to that statement demonstrate that it was very likely that the Claim Form was not initially sealed on 8 October 2024 but was subsequently backdated.

30. As is now common ground, the reality was that the Claim Form was issued on 20 November 2024 when it was sealed by the Court, albeit with the wrong date stamp. It would be unjust to penalise the Claimant for an administrative or other error by the CE-file system. The time for service of that Claim Form was within time, namely by 26 November 2024. However, the real issue before the Court now is whether in those circumstances the Claimant is entitled to an extension of time for issue of the Claim Form in order to mount its challenge to the partial Arbitration Award. Issue of the Claim Form

31. Regardless of any delay caused by the administrative error or other malfunction of CE file, the Claimant needs an extension of time from 24 September 2024 to 8 October 2024 for completely unrelated reasons.

32. Section 70(3) of the Arbitration Act 1996 provides that 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.

33. It does not seem to be in dispute that there was no arbitral process of appeal or review in this case. Therefore, the applicable date from which time runs is the date of the Award, in this case 27 September 2024.

34. The strict time limits for any challenges to arbitration awards reflect the stated purpose of the Arbitration Act 1996 to obtain a fair resolution of disputes by a tribunal without unnecessary delay or expense and to promote the finality of arbitration awards.

35. The principles applicable to the Court’s discretion to extend time were summarised by Popplewell J, as he then was, in the case of Terna Bahrain Holding Company v Al Shamsi [2012] EWHC 3283 at [27] to [31]. At [27] the Judge observed that: “(1) Section 73 of the Act requires challenges to an award under sections 67 and 68 to be brought within 28 days This relatively short period of time reflects the principle of speedy finality which underpins the Act and which is enshrined in section 1 (a). The party seeking an extension must therefore show that the interests of justice require an exceptional departure from the timetable laid down by the Act . Any significant delay beyond 28 days is to be regarded as inimical to the policy of the Act . (2) The relevant factors are: (i) the length of the delay; (ii) whether the party who permitted the time limit to expire and subsequently delayed was acting reasonably in the circumstances in doing so; (iii) whether the respondent to the application or the arbitrator caused or contributed to the delay; (iv) whether the respondent to the application would by reason of the delay suffer irremediable prejudice in addition to the mere loss of time if the application were permitted to proceed; (v) whether the arbitration has continued during the period of delay and if so what impact on the progress of the arbitration or the costs incurred in respect of the arbitration the determination of the application by the court might now have; (vi) the strength of the application; (vii) whether in the broadest sense it would be unfair to the applicant for him to be denied the opportunity of having the application determined. (3) Factors (i), (ii) and (iii) are the primary factors.”

36. The judge went on to make additional observations: “[28] … First, the length of delay must be judged against the yardstick of the 28 days provided for in the Act . Therefore, a delay measured even in days is significant. A delay measured in many weeks or in months is substantial. [29] Secondly, factor (ii) involves an investigation into the reasons for the delay. In seeking relief from the court, it is normally incumbent upon the applicant to adduce evidence which explains his conduct, unless circumstances make it impossible… [30] Thirdly, factor (ii) is couched in terms of whether the party who has allowed the time to expire had acted reasonably. This encompasses the question whether the party has acted intentionally in making an informed choice to delay making the application … [31] Fourthly, the court’s approach to the strength of the challenge application will depend upon the procedural circumstances in which the issue arises. On an application for an extension of time, the Court will not normally conduct a substantial investigation into the merits of the challenge application, since to do so would defeat the purposes of the Act . However, if the court can see on the material before it that the challenge involves an intrinsically weak case, it will count against the application for an extension, whilst an apparently strong case will assist the application. Unless the challenge can be seen to be either strong or intrinsically weak on a brief perusal of the grounds, this will not be a factor which is treated as of weight in either direction on the application for an extension of time. If it can readily be seen to be either strong or weak, that is a relevant factor, but it is not a primary factor because the court is only able to form a provisional view of the merits, a view which might not be confirmed by a full investigation of the challenge, with the benefit of the argument which would take place at the hearing of the application itself if the extension of time were granted.”

37. I bear in mind all of the above guidance in assessing the merits of the Claimant’s application in this case. Length of delay

38. Firstly, I consider the length of the delay. In this case the total delay was from 24 September 2024 to 20 November 2024, which I calculate is a period of 57 days. Even if the latter part of the delay is discounted, taking into account the difficulties encountered by the Claimant caused by the Court failing to stamp the Claim Form, either on 8 October or properly on 20 November, the initial delay after the expiry of the statutory period was from 24 September 2024 until 8 October 2024, a period of 14 days. That is a significant delay compared with the yardstick of 28 days provided for in the Act . Reasonableness of delay

39. Secondly, I consider the reasonableness of the Claimant’s delay. The challenge under section 68 of the Act was sought to be brought on the very last day of the statutory period, namely on 24 September 2024. I do not consider that the Claimants have anything to answer for in terms of the initial delay during which the fees were not paid until the Award was handed down, simply because they do not rely upon that as giving rise to a ground for extending time. However, by 13 September 2024, having received the Award some ten days earlier, the Claimant had consulted solicitors and received legal advice on the potential grounds of challenge, sufficient to notify both the Arbitrator and the Defendants of the Claimant’s complaints which now form the basis of the challenge sought to be made.

40. There was no obligation on the Arbitrator to respond with speed to the Claimant in circumstances where the Claimant had chosen to delay collecting the Award. In those circumstances, the Claimant did not act reasonably in delaying until the very last moment to try and start the Arbitration Claim. Although I accept that the delay was not intentional, it was a risk that the Claimant chose to take. The failed attempts to file the Claim Form during the week prior to 8 October stemmed from the Claimants’ failure to file it under the correct category and pay the correct fee.

41. Therefore, although I am satisfied that there was no deliberate decision to delay making the claim, the Claimant has not provided a reasonable explanation for the delay of 14 days following expiry of the statutory period for issuing a challenge to the Award. Prejudice

42. Thirdly, I turn to consider prejudice. The Claimant contends that the delay in commencing proceedings was short and no prejudice has been caused to the Defendants by that delay.

43. On one view there is always prejudice to the respondents to an application for an extension of time where the strict time limits for challenging an arbitral award are not respected. Although not severe in this case, the Defendants have been deprived of finality in respect of the Partial Award, issued now well over a year ago. More significantly, pending resolution of this application, the remaining arbitral proceedings have been in abeyance, depriving the Defendants of a final resolution of the arbitration. Strength of application

44. Fourthly, I turn to the strength of the application. The material provisions of the Arbitration Act are at section 68 , challenging the award by serious irregularity: (1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award… (2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant – (a) failure by the tribunal to comply with section 33 (general duties of tribunal) ... (3) If there is shown to be a serious irregularity affecting the tribunal, the proceedings or the award, the court may – (a) remit the award to the tribunal, in whole or in part, for reconsideration, (b) set the award aside in whole or in part, or (c) declare the award to be of no effect in whole or in part. The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.

45. In this case it is said that the tribunal overlooked and accordingly failed to take into account relevant email communication between the parties that demonstrated that the Claimant had in fact provided the cylinder and radiator sizing on 8 December 2020, not, as found by the Arbitrator, on 18 December 2020 and therefore had advanced the plumbing design within the time period specified by the improvement notice. It is said that the Tribunal’s failure to take into account these communications, which were material to determine the issues in the first part of the arbitration, amounted to a failure to act fairly and impartially between the parties in breach of its duties under section 33 of the Act .

46. The principles applicable to a challenge under section 68(2) (a) of the Act were set out in the Terna Bahrain case at [85], in which the Judge stated that: “(2) The test of a serious irregularity giving rise to substantial injustice involves a high threshold. The threshold is deliberately high because the major purpose of the 1996 Act was to reduce drastically the extent of intervention by the courts in the arbitral process. (3) A balance has to be drawn between the need for finality of the award and the need to protect parties against the unfair conduct of the arbitration. In striking this balance, only an extreme case would justify the court’s intervention. Relief under section 68 will only be appropriate where the tribunal has gone so wrong in its conduct of the arbitration and where its conduct is so far removed from what could be reasonably expected from the arbitral process, that justice calls out for it to be corrected. (4) There will generally be a breach of section 33 where a tribunal decides the case on the basis of a point which one party has not had a fair opportunity to deal with. If the tribunal thinks that the parties have missed the real point, which has not been raised as an issue, it must warn the parties and give them an opportunity to address the point. (5) There is, however, an important distinction between on the one hand a party having no opportunity to address a point on his opponent’s case and on the other hand a party failing to recognise or take the opportunity which exists. The latter will not involve a breach of section 33 or a serious irregularity. (6) The requirement of substantial injustice is additional to that of a serious irregularity and the applicant must establish both. (7) In determining whether there has been substantial injustice, the court is not required to decide for itself what would have happened in the arbitration had there been no irregularity. The applicant does not need to show that the result would necessarily or even probably have been different. What the applicant is required to show is that had he had an opportunity to address the point, the tribunal might well have reached a different view and produced a significantly different outcome”.

47. The Defendants rely upon the remarks of Teare J in the case of UMS Holding v Great Station Properties [2017] EWHC 2398. Following a review of the relevant authorities, he considered the law regarding allegations that an arbitral tribunal has overlooked evidence at [28]: “… A contention that the tribunal has ignored or failed to have regard to evidence relied upon by one of the parties cannot be the subject matter of an allegation of a serious irregularity within section 68(2) (a) or (d), for several reasons: i) First the tribunal’s duty is to decide the essential issues put to it for decision and to give its reasons for doing so. It does not have to deal in its reasons with each point made by a party in relation to those essential issues or refer to all the relevant evidence. ii) Second, the assessment and evaluation of such evidence is a matter exclusively for the tribunal. The court has no role in that regard. iii) third, where a tribunal in its reasons has not referred to a piece of evidence which one party says is crucial, the tribunal may have (i) considered it but have regarded it as not determinative, (ii) considered it but assessed it as coming from an unreliable source, (iii) considered it but misunderstood it, or overlooked it. There may be other possibilities. Were the court to seek to determine why the tribunal had not referred to certain evidence, it would have to consider the entirety of the evidence which was before the tribunal and which was relevant to the decision under challenge. Such evidence would include not only documentary evidence but also the transcripts of factual and expert evidence. Such an enquiry (in addition to being lengthy …) would be an impermissible exercise for the court to undertake because it is the tribunal not the court that assesses the evidence adduced by the parties. Further, for the court to decide that the tribunal had overlooked certain evidence, the court would have to conclude that the only inference to be drawn from the tribunal’s failure to mention such evidence was that the tribunal had overlooked it. But the tribunal may have had a different view of the importance, relevance or reliability of the evidence from that of the court and so the required inference cannot be drawn. iv) Fourth, section 68 is concerned with due process. Section 68 is not concerned with whether the tribunal has made the right finding of fact, any more than it is concerned with whether the tribunal has made the right decision in law. The suggestion that it is a serious irregularity to fail to deal with certain evidence ignores that principle. By choosing to resolve disputes by arbitration, the parties clothe the tribunal with jurisdiction to make a wrong finding of fact.”

48. In this case, the claimant’s complaint falls below the high threshold imposed by section 68 , even on a brief perusal of the documents that are currently before the court.

49. First the alleged error regarding the date on which the relevant information was supplied by the claimant was based on Mr Betsy’s witness statement. It is referred to by the Arbitrator in terms in the Award. It is fanciful to suggest that the Arbitrator should have rejected Mr Betsy’s clear and direct evidence on the date on which the information was supplied, and trawled through the documentation to check whether the date given by him was in fact correct.

50. Secondly, there was no attempt to correct Mr Betsy’s witness statement during the course of the Arbitration.

51. Third, the Arbitrator’s decision on the issue of whether the Claimant was in default, was not simply based on the date on which the information was provided. The complaint, which was resolved in favour of the Defendants, was that the Claimant had failed to advance the planning design and failed to provide the requested details within the timetable requirements set out in the default notice. For those reasons, I consider that on the documents before the Court the proposed arbitration challenge is intrinsically weak.

52. I am confident that it is appropriate for the Court to consider the merits of the challenge at this procedural hearing because it was an arbitration on the documents. Therefore, the Court has before it the documents on which the parties rely.

53. In all of the circumstances, this would not be an appropriate case in which to grant the extension of time necessary to extend time for issue of the Arbitration Claim Form from 24 September 2024 to 8 October 2024. As a result, any delay beyond 8 October 2024 is irrelevant to the Court’s consideration.

54. For all those reasons it follows that the Court will grant the Defendants’ application challenging jurisdiction and dismiss the Claimant’s application for an extension of time. _________________________ Digital Transcription by Marten Walsh Cherer Ltd 2 nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP Tel No: 020 7067 2900. DX: 410 LDE Email: [email protected] Web: www.martenwalshcherer.com