Appointing an arbitrator? The English court signals the need for “clear and unconditional” acceptance or a willingness to accept (ARI v WXJ [2022])

For parties commencing arbitration with a three-member tribunal, subject to any specific applicable rules laid out in the arbitration agreement, the first procedural step is often for the claimant to appoint an arbitrator and give notice of the appointment to the other side. They, in turn would then normally have a period of time to appoint their own arbitrator. If the respondent does not appoint an arbitrator within that time however, section 17 of the English Arbitration Act 1996 provides a mechanism for the claimant to have its choice appointed as the sole arbitrator. While this default mechanism may be disapplied in the case of institutional arbitration (where the institution may instead make an appointment in place of the defaulting party), it remains an important mechanism in the context of ad hoc arbitration. 

In the recent case of ARI v WXJ [2022] EWHC 1543 (Comm), the English High Court looked at the question of when an arbitrator is considered validly appointed for the purposes of an arbitration clause in a charterparty. This is a point which will be of great interest to parties and counsel involved in the commencement of arbitration with the seat in England.

Background

The claimant commenced a London Maritime Arbitration Association (LMAA) arbitration concerning a dispute under a charterparty. The arbitration clause within the charterparty provided that the respondent/defendant was to appoint and give notice of appointment of its arbitrator within 14 days of notice of the claimant’s notice of appointment of its arbitrator, failing which the claimant could appoint its appointed arbitrator as sole arbitrator. On 22 December 2021, the claimant sent notice of appointment of its arbitrator (‘GGG’) stating that the respondent had 14 days to appoint its arbitrator failing which the claimant would appoint GGG as the sole arbitrator. On 3 January 2022 (within 12 days), the respondent emailed an arbitrator (‘JJJ’) with the subject as “Possible appointment URGENT” stating:

“We write to enquire about your availability and willingness to be appointed as an arbitrator in an LMAA arbitration in London …

Unfortunately we have a relatively tight deadline (5 January 2022) for the appointment so we would be very grateful to receive your response as soon as possible.

… We hope that the above provides sufficient information for you to assess your interest in the matter, together with any possible conflicts …”

JJJ responded to this email stating that, “subject to conflicts”, they were “available for this assignment”. The next day, on 4 January 2022, the respondent wrote again to JJJ:

“… subject to your final confirmation that you are conflict-free, we are planning to write to counsel for [the Claimant] tomorrow (Wednesday 5 January) providing your contact details … Once your appointment is confirmed we hope to reach out to discuss the appointment of the presiding arbitrator. We very much look forward to your confirmation (hopefully today) that you are conflict free to act in this matter and we look forward to working with you.”

JJJ responded “Good evening and it appears that I can act here without any firm conflicts” and asked that JJJ’s associate was copied into any correspondence with the claimant.

The respondent replied "Thank you for your confirmation. We will … confirm your appointment and the way forward in due course after tomorrow”. On 5 January 2022, the respondent gave notice to the claimant of its appointment of JJJ.

Correspondence followed between the respondent and JJJ in relation to agreeing the terms of JJJ’s appointment and renumeration. Following those discussions, and having failed to reach agreement, on 1 February 2022 JJJ said they would not be able to participate in the arbitration.

The question the Court was asked to look at on a summary judgment basis was whether JJJ had been validly appointed by 5 January 2022 (and if so, did that mean the respondent was now…