Arbitrations governed by non-national law are still subject to the mandatory provisions of the seat

Unlike before an English court, parties to an arbitration seated in England are not limited to having a tribunal decide the substance of their dispute in accordance with the law of a particular country. Section 46(1)(b) of the Arbitration Act 1996 makes this clear. So if the parties want to have their dispute determined by an arbitral tribunal in accordance with Jewish law or Sharia law, or any other considerations, that is perfectly fine. The thing not to forget, however, is that arbitration does not take place in a vacuum. So even if a dispute is said to be governed by, say, Jewish law, if the parties seek to resolve it by arbitration seated in England, then certain mandatory provisions of English arbitral law will apply come what may – and possibly also some non-mandatory provisions too if the parties haven’t carved them out. That can give rise to tension, as a recent interesting decision of Mr Justice Miles in Djanogly v Djanogly & Ors [2025] EWHC 61 (Ch) shows. The judgment was handed down on 17 January 2025 and can be found here. 

Djanogly was an acrimonious family dispute about money. The facts and history are involved. In short, Rabbi Saul Djanogly (“SD”) was the respondent in an arbitration brought against him by his father (“DD”) and brother (“AD”). DD claimed that SD owed him money on the basis of the principle of financial maintenance under Jewish law. Under Jewish law, children are obliged to support their parents financially if their parents are impoverished and the children are not. DD also claimed that he had lent money to an entity owned by SD and AD, known as SAS Financial Services Limited (“SAS”). DD sought repayment of the loans to SAS from SD. There were various other claims.

The parties agreed that the dispute should be resolved by the Golders Green Beth Din of the Union of Orthodox Hebrew Congregations (the “Tribunal”) by way of an ad hoc arbitration seated in England, applying Jewish law. The Tribunal determined that SD should pay just over £100,000 to DD on the basis of the loans extended to SAS by DD and made an award to that effect.

SD challenged the Tribunal’s award under ss.67, 68 and 69 of the 1996 Act (i.e. for lack of jurisdiction, procedural irregularity and an appeal on a point of law respectively) on the basis that: (i) the claim was time-barred; (ii) the Tribunal had no jurisdiction since the claim ought properly to be against SAS, a separate legal person, who was not party to the arbitration agreement; and (iii) the claims fell outside the scope of the reference. 

Only the limitation argument succeeded under s.68–i.e. there was a procedural irregularity because SD had advanced a limitation argument under English law that the Tribunal failed to consider or deal with such that he suffered substantial prejudice. SD’s argument ran as follows:

• The Limitation Acts apply to arbitration by virtue of s.13 of the 1996 Act. These are the Limitation Act 1980 and the Foreign Limitation Periods Act 1984.
• Section 13 is a mandatory provision of the 1996 Act (see s.4(1) and Schedule 1). It cannot be contracted out of.
• The Foreign Limitation Periods Act 1984 can disapply English limitation law if “the law of any other country falls … to be taken into account in the determination of any matter”. In that case, the relevant law on limitation from the foreign law applies.
• However, Jewish law is not the “law of any other country” within the meaning of the 1984 Act (applying Halpern v Halpern [2007] EWCA Civ 291 by analogy). It therefore could not disapply the English law on limitation.
• The Tribunal was therefore bound to apply English limitation periods to the claim. 
• If the Tribunal had done so, DD’s claims for payment would have been statute-barred.
• SD raised this as a defence and the Tribunal did not deal with it. That was a serious irregularity within the meaning of s.68(2)(d) of the 1996 Act. 
• There was a substantial injustice because the Tribunal might well have reached a different conclusion if they had adopted the right approach.

The Judge agreed with the thrust of SD’s argument and held that, by failing entirely to deal with SD’s limitation defence, the Tribunal’s failure had caused a substantial injustice to SD because it was at least seriously arguable that SD’s defence would be made out. The parties agreed that the appropriate remedy would be addressed at a further hearing if not agreed. (The possible remedies here under s.68(3) of the 1996 Act are that the award be remitted to the Tribunal for reconsideration, that it be set aside or that it be declared to be of no effect.)

So it’s a reminder that even if parties choose a law other than the law of a country to govern their dispute, by arbitrating (at least in England), they submit to certain mandatory provisions of local arbitral law. 

What is interesting about Djanogly is that SD succeeded on the basis that the Tribunal failed to consider or address his limitation defences at all, which engaged s.68 on procedural irregularity. The analysis set out in the judgment as to the mandatory effect of s.13 and its implications for the interaction between English limitation rules and Jewish law feels like a point that could have arisen in the context of s.69 too, i.e. on the basis of an appeal on a point of law, since it is difficult to see how the Tribunal could have escaped the conclusion that English limitation rules ought to have applied if they followed the thread of the 1996 Act and been taken to the Halpern case. And SD did apply for leave under s.69, but the judge found the issue did not arise because of his conclusion on s.68 and did not deal with any of the points that were invariably raised by the parties.