All good things (including arbitrations) must come to an end: Court of Appeal finds unlimited power for tribunal to amend its award incompatible with Arbitration Act 1996
Summary
In Gluck v Endzweig [2026] EWCA Civ 145, the Court of Appeal weighed two key principles of arbitration – party autonomy and the need for finality – and held that where the parties had intended their dispute resolution procedure to produce a valid arbitration for the purposes of the Arbitration Act 1996 (the “Arbitration Act”), they could not also agree to provisions which would result in the award never becoming final.
Background
A dispute arose between parties to a share purchase agreement (“SPA”) which contained a dispute resolution clause providing for all disputes to be “finally resolved” by arbitration by the Beth Din Rabbinical court and that “judgment upon the award rendered by the Beth Din may be entered in any court having jurisdiction thereof”. The parties subsequently executed an additional arbitration agreement, which provided that “this deed will be valid according to the Arbitration Act” but gave the Beth Din authority to “amend and add to” their award “at any time”.
The Beth Din rendered an award holding that a sum was owed by one party to the other, in respect of which the appellant obtained an enforcement order. Some time later the Beth Din issued a further award significantly reducing the amount to be paid. Following the second award, the respondent successfully applied to the High Court to have the enforcement order set aside on the basis that the first award was not final. HHJ Keyser KC held that the parties were entitled to give the tribunal a broader power to amend its award than is found in the Arbitration Act and that this would not prevent a final and enforceable award being rendered; if the Beth Din had not decided to review the first award, it would have become final, and it was open to the Beth Din ultimately to declare itself functus officio in which case no further amendments could be made. The appellant appealed.
Court of Appeal decision
Allowing the appeal and reinstating the enforcement order, the Court of Appeal found that it was not possible to interpret the arbitration agreement in a way which resulted in a valid arbitration agreement for the purposes of the Arbitration Act and which also gave effect to the parties’ agreement that the arbitrators could change their award at any time. It was clear from the language of the SPA and the arbitration clause that the parties intended to create an arbitration under the Arbitration Act which would give rise to an enforceable award. An unlimited power of the tribunal to make amendments at any time was inconsistent with this intention because it would mean an award could always be changed, such that there would be no point in time where it could be considered final. The solution adopted by the High Court – that the tribunal could declare itself functus officio – was not an answer because the tribunal could at any time reverse that declaration. The Court of Appeal also considered s. 58(1) of the Arbitration Act, which provides that an arbitral award is final and binding “unless otherwise agreed by the parties”, but held that the “unless otherwise agreed” caveat in that section applied narrowly to circumstances such as the submission of an award to an institutional review procedure before becoming final (e.g. the submission of a draft ICC arbitral award for review and approval by the ICC Court), and did not permit parties to agree that an arbitration award under the Arbitration Act could never become final and binding.
Having concluded that the tribunal’s unlimited right to make amendments was inconsistent with the need for finality inherent in an arbitration award, the Court of Appeal held that the unlimited power to amend the award was repugnant to the arbitration agreement as a whole and should be ignored in order to give effect to the remaining provisions of the arbitration agreement. In doing so the Court of Appeal rejected the respondent’s secondary argument – that if the arbitration agreement was incompatible with the Arbitration Act it should nevertheless take effect as a matter of contract – again pointing to the parties’ clear agreement that the arbitration should be valid under the Arbitration Act.
This meant that the default corrections procedure set out in s. 57 of the Arbitration Act applied instead, which provides that any application to amend an award must be made within 28 days of its issuance, with the tribunal making any amendments within 28 days of such application. The Beth Din had not issued its amended award within the statutory time limits and therefore the original award was enforceable.
Conclusion
Party autonomy – the right of parties to agree the applicable procedure – is considered a core pillar of arbitration. This judgment demonstrates, however, that this principle is not without limits and where parties intend for an arbitration to be governed by the Arbitration Act, party autonomy cannot be permitted to override the underlying objective of the arbitral process; to produce an award that is final and binding on the parties.
The Court of Appeal’s readiness to strike out parts of the arbitration agreement to produce an agreement compatible with the Arbitration Act, rather than adopting an interpretation that would give effect to the parties’ agreement on the powers of the tribunal but that would have reduced the arbitration agreement to a contractual dispute resolution mechanism operating outside the Arbitration Act, once again illustrates the pro-arbitration instincts of the English courts.
Finally, and as ever, the case is a reminder to parties of the importance of careful drafting to ensure that their arbitration agreement is both enforceable and reflects their intentions, particularly when departing from standard form clauses and procedure.
