The claimants had made an application in the Commercial Court challenging a partial final award under sections 68(2)(a) (serious irregularity) and 67 (substantive jurisdiction) of the Arbitration Act 1996 (the 1996 act). Calver J dismissed the claimants’ application and dealt with a number of consequential matters in V & Anor v K (Re Consequential Matters) [2025] EWHC 1704 (Comm). This article is concerned with two of those issues: permission to appeal and costs, specifically whether costs should be awarded on the indemnity basis.

Permission to appeal

The claimants applied for permission to appeal against: i) the court’s dismissal of their application under section 67 of the 1996 act; ii) the court’s dismissal of their application under section 68 of the 1996 act; and iii) the court’s decision to set aside service of the claim form.

Agreeing with the defendants, Calver J noted the following difficulties with the claimants’ applications:

No application for permission to appeal was made by the claimants at the time judgment was handed down and no adjournment of that hand-down hearing was sought by them. It was therefore too late to seek permission now (see Civil Procedure Rule 52.3(2) and paragraph 4.1 of PD 52A).

In McDonald v Rose [2019] EWCA Civ 4, Underhill LJ set out the relevant principles as follows:

CPR 52.3(2) provides as follows: ‘An application for permission to appeal may be made – (a) to the lower court at the hearing at which the decision to be appealed was made; or (b) to the appeal court in an appeal notice.’

The date of the decision for the purposes of CPR 52.12[1] is the date of the hearing at which the decision is given, which may be ex tempore or by the formal hand down of a reserved judgment (the decision hearing).

A party that wishes to apply to the lower court for permission to appeal should normally do so at the decision hearing itself.

If a party is not ready to make an application at the decision hearing, it is necessary to ask for the hearing to be formally adjourned in order to give them more time to do so. As long as the decision hearing has been formally adjourned, any such application can be treated as having been made ‘at’ it for the purpose of CPR 52.3(2)(a).

If no permission application is made at the decision hearing, and there has been no adjournment, the lower court is no longer seized of the matter and cannot consider any retrospective application for permission to appeal.

A retrospective application for permission to appeal, where the judgment has been handed down and the hearing has not been adjourned, cannot be considered by the lower court: this is because the court has no jurisdiction to grant permission after the conclusion of the hearing at which judgment is handed down.

Calver J found that the claimants did not ask for an adjournment of the decision hearing (when the judgment was handed down) and that it was too late for them to seek permission to appeal from this court: the court no longer had jurisdiction to grant permission. He also found that the claimants had failed to provide any draft grounds of appeal, which was a breach of the Commercial Court Guide, paragraph J12.3. Even if the claimants were permitted to make an application for permission to appeal, the application would have been refused because it would have had no reasonable prospects of success. There was no other compelling reason for the appeal to be heard because, inter alia, any appeal against the court’s refusal to grant retrospective permission for service of the claim form is only of relevance if the claimants succeed in setting aside the court’s judgment on sections 67 or 68 of the 1996 act, and is hopeless in any event for the reasons given by the court of the judgment, which were fact-specific to this particular case.

Indemnity costs

Calver J held that the section 67 challenge should not have been made. It was hopeless and was effectively abandoned at the hearing. The other grounds of challenge, including allegations of apparent bias, were abandoned on the morning of the second day of the hearing. Furthermore, this was a case ‘out of the norm’ and justified, at least in part, an order for indemnity costs. In the circumstances of this case, Calver J held that a fair costs assessment was that the claimants should pay 70% of the defendant’s costs on an indemnity basis and 30% on the standard basis.

The decision in V & Anor v K illustrates the importance of strict procedural compliance in arbitration claims, particularly in relation to permission to appeal. Applications for permission to appeal must be made at the time judgment is handed down or, at that time, an adjournment should be sought; otherwise, it will be too late to seek permission later.

On the issue of costs, the partial indemnity award reflects the court’s disapproval of speculative and abandoned claims, especially in the context of serious allegations such as bias. The ruling serves as a cautionary reminder: arbitration challenges must be grounded in substance and prosecuted with procedural diligence, otherwise parties risk adverse costs orders and the closure of appellate routes.

 

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