Section 72 of the UK Arbitration Act: Rights of Parties Who Do Not Participate at All in Arbitration Proceedings to Challenge Awards

Section 72 of the UK Arbitration Act 1996 concerns the rights of parties alleged to be parties to an agreement to arbitrate, but who have taken no part in arbitration proceedings, to challenge awards.  Its first limb (72(1)) empowers such persons to apply to the Court for a declaration, injunction, or other appropriate relief in respect of the following questions: (a) Is there a valid arbitration agreement?; (b) Has the tribunal been properly constituted?; and (c) Have the matters referred to arbitration been so referred in accordance with the arbitration agreement?  For a party to seek such relief, no arbitral award needs to have been rendered by the tribunal. The second limb (72(2)), however, applies where an arbitration award has been rendered, and provides a means for those same non-participants to challenge those awards (either by way of an application under s. 67 on grounds of lack of jurisdiction or s. 68 on grounds of serious irregularity).  In this sense, 72(2) is not a freestanding form of relief, but rather an avenue through which non-participants can seek recourse under section 67 and 68).

The rationale underpinning s. 72 was enunciated by the Departmental Advisory Committee on Arbitration Law (the committee tasked with reviewing the draft bill that eventually became the UK’s 1996 Arbitration Act), as follows:

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 provision thus strikes a sensible balance: ensuring on the one hand that arbitral proceedings are not delayed, and awards not evaded, by the raising of jurisdictional objections that ought to have been discovered and raised earlier; whilst at the same time preserving a party’s genuine entitlement to ignore an arbitral proceeding it views as invalid (see Walker J in London Steam Ship Owners Mutual Insurance Association v Spain [2013] EWHC 2840 (Comm)).

            An oft-cited characteristic of English jurisprudence in recent years is its pro-arbitration sentiment, evinced by countless judgments upholding and enforcing agreements to arbitrate, intervening to assist and enforce awards, and enjoining the prosecution of court proceedings in favor of arbitration.  The extent to which that is a truly contemporary phenomenon remains the subject of debate (see Brekoulakis, Stavros. “The Historical Treatment of Arbitration under English Law and the Development of the Policy Favouring Arbitration.” Oxford Journal of Legal Studies 39, no. 1 (2019): 124–50).  Yet what remains clear is that this sentiment can fairly be said to derive from a cornerstone principle in English jurisprudence: party autonomy.  Put simply, if parties have agreed to arbitrate, that intention should – save in exceptional circumstances – be given effect to; and vice-versa.           

            In this sense, s. 72 stands not only as an important counterweight to the increasingly apparent pro-arbitral sentiments of English judges (particularly on the Commercial bench), and to an unprincipled broadening of the principle of kompetenz-komptenz, whilst simultaneously reinforcing the foundational principle of party autonomy, by ensuring parties are not forced to arbitrate against their will.

Recent Approaches

That balance is an important one to strike.  It is precisely in view of its importance that the provision has been construed relatively generously by English courts.  This approach was brought most acutely into view in 2010, with the UK Supreme Court’s judgment in Dallah Estate and Tourism Holding Company v The Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46.  The judgment gave birth to the eponymous “Dallah” principle: that a party who disputes jurisdiction is entitled not to participate in arbitration proceedings if it took the view that the proceedings were invalid; even if the tribunal has ruled positively on its own jurisdiction.  That principle was notably affirmed in London Steam Ship v The Kingdom of Spain [2013] EWHC 2840 (Comm), where Walker J – in emphasising the primacy of the Dallah principle – declined to confine s. 72(1) to the pre-Award position, and held that it was appropriate to grant an extension of time to allow the non-party, Spain, to use all means at its disposal in challenging the award and its enforcement.

            None of this is to say parties may invoke s. 72 with free reign.  Indeed, recent judgments highlight that parties should consider carefully what – if any steps – they are to take in an arbitration if they later wish to rely on the protection afforded by s. 72.

            In Broda Agro Trade v Alfred C Toepfer International GmbH [2010] EWCA Civ 1100, for example, the Court held that a person who had not taken part in arbitration proceedings leading to an interim award on jurisdiction, but had thereafter taken part in the substantive proceedings on the merits, could not make an application under s. 72 questioning the validity of the arbitration agreement in question. He was instead bound by the procedure afforded to him in s. 67 (challenges to jurisdiction) and the appropriate time limits therein.  Likewise, in Frontier Agriculture Ltd v Bratt Bros (A Firm) [2015] EWCA Civ 611, the Court held that the right to commence court proceedings under s. 72 is likely to be lost by unqualified participation in the appointment of an arbitrator.

            That being said, more anodyne forms of participation will unlikely preclude a party from relying on s. 72.  For example, the dictum of Gloster J in Excalibur Ventures LLC v Texas Keystone Inc and others [2011] EWHC 1624 (Comm) at [61] clarified that merely writing to the ICC to set out a party’s objection to jurisdiction will be unlikely to constitute arbitral participation; or Caparo Group Ltd v Fagor Arrasate Sociedad Cooperative 1998 [2000] ADRLJ 254, in which a request submitted to the ICC to reject the claimant’s request for arbitration did not amount to taking part in proceedings.  The ration in Caparo admittedly has been cited as sitting at the more generous end of the spectrum for what constitutes ‘non-participation’ (noting that the ICC is empowered to take prima facie decisions on questions of tribunal jurisdiction).  There is, in any case, a fine distinction between correspondence with a tribunal to inform if of the party’s position, and a formal submission that the tribunal lacks jurisdiction (see Sovarex SA v Romero Alvarez SA [2011] EWHC 1661 (Comm), wherein Hamblen J distinguished between: (a) asserting that the issue should be decided by some other court or tribunal, and (b) asking the tribunal to consider the issue (the latter being likely to constitute ‘participation’ and thus precluding section 72 rights).

2025 Considerations

Notwithstanding the considerable judicial dicta on the topic, the provision continues to generate case law.  Indeed, 2025 has witnessed no fewer than three decisions on the topic, which are considered in turn.

ABC v Def [2025] EWHC 711 (Comm): In this case, the Defendant (D) commenced two LCIA arbitrations under contracts providing for the supply of pharmaceutical goods against (i) ABC, (ii) its direct subsidiary, UKCo and (iii) an indirect subsidiary, MalaysiaCo (all named as respondents).  ABC was not a party to either contract.

ABC – which (it was common ground) took no steps in the arbitration – applied to the Court seeking a s. 72 order that there was no valid arbitration agreement between it and D.

            When commencing the arbitration, D’s justification for naming ABC as a respondent had been that it had always dealt with ABC, and that accordingly, ABC shares or is responsible for the liabilities of UKCo and MalaysiaCo.  In its responsive witness evidence before the Court, however, D claimed ABC had performed, at least in part, the obligations of both subsidiary companies under the relevant contracts and that, by consequence, it was properly a party to the arbitration agreement relied upon.  D also claimed that any jurisdictional issues ought to be resolved by the arbitrator given the purportedly heavy overlap between those issues and the substantive issues engaged in the reference.  At the time of skeleton arguments, however, D’s case morphed yet again: it instead submitted that, as a result of ABC (part) performing the obligations of UKCo and MalaysiaCo, there had arisen an implied contract between D and ABC, as a result of which an arbitration agreement came about by implication.         

            HHJ Pelling, considering Lord Sumption’s dictum in Prest v Petrodel Resources (that a Court may only permit a parent and subsidiary to be treated as the same to the extent necessary to prevent an abuse of the concept of corporate personality itself) held that there was no clear intention of ABC being a party to the relevant agreement.  The Judge further described D’s argument about the existence of an implied contract as “fatal” to its opposition to ABC’s application: as said implied contract had not been pleaded in the arbitration, so fell outside the scope of the arbitration reference (and, it follows, the arbitrator’s jurisdiction). To introduce that argument in the arbitration would represent a profound change to D’s jurisdictional case, which would unlikely be permitted.  The application was thus granted.

            HHJ Pelling acknowledged the importance of balancing the principle of kompetenz-kompetenz with judicial oversight conferred by section 72, and emphasised the need to approach applications under the provision with a degree of caution (especially in fact-sensitive jurisdiction issues that may encroach into the terrain of the substantive dispute), but held that the threshold for such caution necessarily lowers in circumstances where it is plain that there is no valid arbitration agreement and such a factual inquiry would be unnecessary.

A&N Seaways v Allianz Bulk Carriers and another [2025] EWHC 2126 (Comm): This case concerned a dispute that had arisen over withdrawal of a vessel (as a result of non-payment of hire).  An arbitration was commenced by the vessel’s owners under the relevant Charterparty against the Charterers.  The Charterers served an “interim response” alleging that the Charterparty was the result of a fraud between one its directors and the vessel’s owners. It subsequently sought the tribunal’s permission for an extension of time in which to file substantive submissions, although they did not do so, leading the tribunal to rule that it would treat said response as the Charterers’ substantive defence in the proceeding.  The allegations in the interim response were ultimately denied by the owners in their reply.  The Tribunal accepted the owners’ arguments (included the owners’ allegation that the Charterparty had in any case been affirmed by the Charterers’ conduct).  An award was rendered of USD 295.5 million.

Twenty-eight days after the award, the Charterers issued an application to the Commercial Court under section 72(2)(a).  The Charterers sought to challenge the part of the award wherein the arbitrator held he had jurisdiction to determine the owner’s claim presented in the reference on the same basis as alleged in the arbitration: i.e., that the arbitration agreement had no legal effect because it had been entered into by one of its directors without the authority of the charterer.  The owners entered a Respondents’ Notice and filed a skeleton seeking to have the claim struck out, on grounds that (inter alia) the claim had no reasonable prospect of success, and that the Charterers’ had participated in the arbitration, so were unable to bring a s. 72(2) challenge.  The Charterers filed a short reply, denying both these allegations, but advancing several serious allegations of fraud against the owners that had not been properly pleaded out in the Claim Form and for which no material evidence was provided (in the court proceedings, at least).  The Charterers sought leave to amend the claim form accordingly.

            The Court refused the Charterers’ application.  First, it was out of time.  The Act provided that any application or appeal against an award (i.e., under section 67 or 68, but brought by a non-participant under section 72(2)) must be brought within 28 days, yet the charterer was introducing allegations of fraud after the expiry of that period.  It should be noted in this regard that 72(2) differs from 72(1) in the applicability of the 28 day rule: on the face of the Act, it is not apparent that any time limit applies to 72(1).  This was noted obiter by Tindal J at para [43] (“This means s.72(1) is more flexible and can be used earlier than s.72(2)(a): there is no time-limit in s.72(1) as there is no point of the process from which time “runs””).

            In those circumstances (where the application was out of time), it fell to the Court to consider: (i) whether the length of the delay was material (it was not – the Charterers’ delay in seeking permission to amend was made four months after the date of its original claim form); (ii) whether the delay was reasonable (it was not – the Charterers had articulated no good reason for the delay); and (iii) whether the respondent or the arbitrator caused or contributed to the delay (they did not).  The Court also found the claim to be defective, as the grounds for allegations of fraud had not been properly pleaded in accordance with the principles in Sofer v SwissIndependent Trustees, so had no real prospect of success.  Accordingly, the claim was struck out.

African Distribution Company v Aastar Trading [2025] EWHC 2428 (Comm): This case concerned a point of timing.  In this case, Aastar commenced arbitration in accordance with GAFTA rules under 16 contracts.  The Claimant did not respond to the notice of arbitration (which had been sent to two generic company email addresses and then GAFTA), or to any of the subsequent emails sent to the same addresses.  Instead, it claimed it had not been served with notice of the proceedings – or known of their existence – until the eventual receipt of the arbitral award on 8 July 2024 in Ivorian enforcement proceedings brought by Aastar.

            The Claimant thus brought a claim on 27 August 2024, in which it sought: (i) to challenge an award under ss. 67 and 68 of the Arbitration Act, (ii) for declaratory relief in relation to the award under section 72; and (iii) for an extension of time in relation to that challenge (noting that it was issued over 28 days after the date of the award).

            The extension application was dismissed on grounds that (i) the Claimant failed to demonstrate sufficient risk of unfairness, or justify its significant delay, when weighed against the importance of expedition to arbitration as a forum for dispute resolution; (ii) it failed to take proper advice on challenging the award promptly; and (iii) in any case, it had an alternative remedy in the form of s.72(1).  In respect of (iii), the Judge reflected that a factor relevant to the exercise of the Court’s discretion was whether the s. 67/68 applications was whether or not alternative relief was hypothetically available under s. 72.  If it was, that would necessarily reduce any prejudice resulting from the refusal.  In any event, the Court held that no time limit applied to post-award applications under s. 72(1). Such applications were freestanding remedies available to non-participants.  Accordingly, whilst the Claimant was out of time for its applications under ss. 67 and 68, it application under s. 72 could nonetheless proceed.

Conclusion

The fact that s. 72 judgments continue to be published by the Courts (with an ostensible regularity) demonstrates the caution with which parties should approach arbitral participation – so too do the mixed judgments of pre-2025 decisions which demonstrate a fine line that ought to be traversed.  The three 2025 judgments themselves, however, demonstrate something more specific.: that parties should, when taking part in an arbitration and attempting to dispute the jurisdiction of an arbitral panel, act promptly and ensure that any jurisdictional objection is not only raised as soon as possible, but is also properly and consistently pleaded.