A party may, pursuant to section 69 of the Arbitration Act 1996, appeal an arbitral award to the court on a question of law arising from the award. The appeal can only be made with the court’s permission unless the parties have agreed otherwise.
The court may grant permission if, inter alia, the determination of the point of law will substantially affect the rights of one or more parties (section 69(3)(a)). It should be noted that, because permission for leave to appeal has been given under section 69, the court hearing the appeal is not bound to accept that a question of law has arisen. The recent decision of Allseeds Switzerland SA v Intergrain SA [2025] EWHC 2788 (Comm) considered an appeal under section 69(3)(a).
The seller (claimant) was obliged under a CIF (cost, insurance and freight) contract to procure a contract of marine insurance for the buyer (defendant). The vessel arrived with damaged cargo, after which the seller obtained an insurance certificate and forwarded it to the buyer. However, the insurers informed the buyer that the policy was void/voided for non-disclosure of pre-existing damage. The buyer commenced arbitration alleging, inter alia, that the seller breached its obligation to provide valid insurance cover. The First Tier Tribunal found the seller had not complied with its CIF insurance obligation. The seller appealed to the Arbitration Board of Appeal, which upheld the finding of breach. The seller then commenced an arbitration claim and sought permission from the Commercial Court under section 69 of the act to challenge the award on two questions of law. Dias J granted permission to appeal and the matter came before Butcher J.
Butcher J reviewed the authorities on the issue of the court granting permission to appeal and the subsequent hearing of section 69 applications. In Ocean Crown [2009] EWHC 3040 (Comm), Gross J made clear that the court hearing the appeal is in no other way bound by the decision of the judge granting leave under section 69 of the act and, on hearing the appeal, the court is not restricted as to its conclusions which may conclude that in reality there is no question or error of law at all. This conclusion did not involve implicit criticism of the judge who granted leave. The task of the judge considering the grant of leave is different from the task of the judge hearing the appeal (see also Agile Holdings Corp v Essar Shipping Ltd [2018] EWHC 1055 (Comm), CVLC Three Carrier Corp v Arab Maritime Petroleum Transport Company [2021] EWHC 551 (Comm) and Ayhan Sezer Yag Ve Gida Endustrisi Ticaret Limited Sirket v Agroinvest SA [2024] EWHC 479 (Comm)). Having considered the authorities, Butcher J made the following observations:
i. The judge hearing the appeal is not strictly bound by any of the decisions made as to satisfaction of the qualifying hurdles made by the judge dealing with permission to appeal.
ii. Subject to (iii) below, it will require highly unusual circumstances for the court to revisit, on the appeal, the component parts of the test for permission to appeal.
iii. The issue of whether the determination of the question of law will substantially affect the rights of one or more of the parties (section 69(3)(a)) is in a rather different position. It is not uncommon for the court hearing the appeal to revisit the issue of whether the answer to the question of law for which permission to appeal was given did substantially affect the rights of the parties.
The key legal issues before the court were: (i) When a buyer under a CIF contract argues that the seller breached its obligation to procure insurance, is it sufficient for the buyer merely to show that the insurer has rejected a claim (or voided the policy)? Or must the buyer show the policy was in law or fact void or voidable for the buyer’s purposes? And (ii) Does it make a difference if insurers might have had grounds to reject a claim, but there is no finding they were entitled to do so (that is, that the policy was actually void/voidable)?
Butcher J held that buyers cannot satisfy the CIF-insurance obligation breach simply by proving that insurers rejected a claim or said a policy was void/voided. They must show that the policy was in law or fact void or voidable (or otherwise ineffective) and thereby the seller failed to procure ‘effective’ cover. Similarly, a buyer cannot simply rely on evidence that insurers might have had grounds to reject a claim; there must be proof that the policy was ineffective for the buyer’s purposes. As a result, Butcher J referred the award back to the Board of Appeal for reconsideration, applying the clarified legal standard.
The decision in Allseeds Switzerland SA clarifies that a buyer under a CIF contract must prove the ineffectiveness of the insurance policy in law or fact – not merely that a claim was rejected – to establish a breach. Moreover, the decision is consistent with the narrow approach the courts will adopt under section 69 of the 1996 act, and it reaffirms that the court hearing the appeal retains full discretion to assess whether a genuine question of law arises, regardless of the earlier grant of permission.
Applications challenging an award under section 69 of the act should be carefully drafted to ensure that legal questions are precisely set out, and practitioners should be prepared for the court to scrutinise both the merits and whether the legal questions truly affect the parties’ rights.
Masood Ahmed is an Associate Professor of Law at the University of Leicester and a member of the Law Society’s Dispute Resolution Committee. Dr Lal Akhter, FCIArb, is a Fellow of the Chartered Institute of Arbitrators, a lawyer, independent arbitrator, and mediator associated with Docket Live, Leicester, and Wiseman Solicitors, Bolton
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