Section 67 Arbitration Act (UK): Challenging Arbitral Jurisdiction

If you use arbitration clauses in your contracts, it’s worth knowing what happens if someone later argues the arbitrator never had jurisdiction in the first place. That’s where Section 67 of the Arbitration Act 1996 comes in.

In plain English, Section 67 lets a party ask the court to overturn or vary an arbitration award if the tribunal lacked “substantive jurisdiction” - for example, because there was no valid arbitration agreement or the dispute went beyond what the clause covered.

For small businesses, Section 67 challenges can be high stakes. Get them right, and you can avoid an unenforceable award or a long, costly jurisdictional fight. Get them wrong, and you risk wasted time, adverse costs and disruption to your operations.

In this guide, we’ll explain what Section 67 actually does, when you can use it, how a challenge works, and - crucially - what you can do when drafting contracts to avoid jurisdiction disputes in the first place.

What Is Section 67 Of The Arbitration Act 1996?

Section 67 is a statutory route to challenge an arbitration award on the ground that the tribunal did not have substantive jurisdiction. In simple terms, “substantive jurisdiction” is the tribunal’s power to decide the dispute at all.

Common jurisdiction issues include:

• No valid arbitration agreement ever came into existence (for example, a missing signature or no agreement on essential terms).
• The arbitration agreement is invalid (e.g. because of fraud or where the person who purported to agree lacked authority to bind the company).
• The tribunal was not properly constituted under the parties’ agreement or the applicable institutional rules.
• The dispute or claim falls outside the scope of the arbitration clause (for example, a tort or statutory claim that the clause doesn’t cover).

A Section 67 challenge asks the court to look at jurisdiction afresh. The court doesn’t just check whether the arbitrator’s decision on jurisdiction was reasonable - it conducts a full, de novo review of the tribunal’s jurisdiction, considering the evidence before it.

If the court agrees there was no substantive jurisdiction, it can set aside the award (in whole or in part), vary it, or remit the matter back to the tribunal with directions.

When Can A Small Business Use Section 67?

You can raise a Section 67 challenge after the tribunal publishes its award. The key timing rules sit in Section 70(3) of the Arbitration Act: you usually have 28 days from the date of the award (or from any correction/clarification under Section 57) to issue your application. The court does have a power to extend time in limited circumstances, but you shouldn’t bank on it.

Just as important is the waiver rule in Section 73. If you take part in the arbitration without raising your jurisdiction objection “as soon as reasonably practicable,” you may lose the right to object later. In practice, that means:

• Raise jurisdictional points early and in writing - ideally at the outset or in your first substantive submission.
• Maintain the objection throughout the case (for example, by saying you are participating “without prejudice” to your jurisdiction objection).
• Comply with any procedural directions while making it clear you’re not accepting jurisdiction.

If you did not participate in the arbitration at all and the other side obtained an award anyway, Section 72 provides a separate route for non-participating parties to challenge jurisdiction. That’s a different mechanism, but the underlying idea is similar: the court can decide whether the tribunal ever had power to act.

Practical tip: If you’re unsure whether to object within the arbitration or hold fire for court, get advice early. The choice you make can affect whether Section 73 applies and how the court views your conduct later.

How Do Section 67 Challenges Work Procedurally?

Most Section 67 applications go to the Commercial Court (a specialist list of the High Court) when the seat of arbitration is England, Wales or Northern Ireland. While procedures can vary with complexity, expect the following building blocks.

1) Identify Your Ground Of Challenge

Be precise about the jurisdiction defect you rely on. Typical grounds include no agreement, an invalid agreement, improper constitution of the tribunal, or a dispute beyond scope. Your application needs to set this out clearly and be backed by evidence (contracts, correspondence, corporate authority documents and witness evidence where needed).

2) Act Within The 28-Day Time Limit

Diary the deadline and work backwards. If you need a short extension, apply promptly with good reasons. Late applications face an uphill battle.

3) Prepare Evidence For A “De Novo” Review

The court will take a fresh look at jurisdiction, so you can expect disclosure of relevant documents and, where appropriate, witness statements and cross‑examination. You should gather:

• The contract(s) containing or incorporating the arbitration agreement.
• Any terms referenced or incorporated (for example, Terms of Trade published online or exchanged by email).
• Evidence of authority to contract (board minutes, emails, signatures, or the absence of them).
• Communications showing the parties’ agreement, scope and intentions.

4) Understand The Possible Outcomes

The court can:

• Confirm the award (if the tribunal did have jurisdiction).
• Vary the award (for instance, removing claims outside scope).
• Set aside the award, in whole or in part.
• Remit matters back to the tribunal with directions.

Costs generally follow the event. If you lose, you may be ordered to pay the other party’s costs of the application - and sometimes costs thrown away in the arbitration if your challenge was weak. A clear strategy from the outset is essential.

5) Consider Related Routes (But Don’t Confuse Them)

Section 67 is for jurisdiction. If your complaint is about unfair procedure (for example, you didn’t get a fair hearing), that’s more likely a Section 68 “serious irregularity” challenge. If you think the arbitrator got the law wrong, that’s a Section 69 appeal on a point of law - but only if not excluded by the parties’ agreement and within strict limits. We explain the differences below.

6) Keep Commercial Settlement In View

Section 67 fights can be expensive. It’s sensible to combine any application with a pragmatic settlement strategy. A well‑pitched letter before action (or a without‑prejudice proposal) can bring the other side to the table while you preserve your rights and deadlines.

Section 67 vs Sections 68 And 69: What’s The Difference?

UK arbitration law provides three main challenge routes after an award. They serve different purposes, have different thresholds, and carry different risks.

Section 67 – Substantive Jurisdiction

• What it’s about: Whether the tribunal had power to decide the dispute at all.
• Examples: No arbitration agreement; agreement invalid; claim outside the clause.
• Review standard: De novo (fresh look at facts and law on jurisdiction).
• Outcome: Award can be confirmed, varied, set aside or remitted.

Section 68 – Serious Irregularity

• What it’s about: Due process failures causing substantial injustice (e.g. not giving a party a fair chance to present its case).
• Threshold: High - aims to correct extreme procedural unfairness, not mere mistakes.
• Outcome: Usually remittal to the tribunal to cure the irregularity.

Section 69 – Appeal On A Point Of Law

• What it’s about: Errors of English law on the face of the award.
• Availability: Often excluded by contract or institutional rules; requires court permission if not agreed.
• Outcome: Court may vary or remit; threshold includes showing the decision is “obviously wrong” or of general public importance.

Why this distinction matters: if you run the wrong challenge, you’ll waste time and cost and risk losing your window to bring the right one. A careful review of the arbitration clause, the award and the procedural history will help you choose the correct route - or combine routes if appropriate and allowed.

Drafting Tips To Avoid Section 67 Disputes In The First Place

The best Section 67 strategy is often prevention. Most jurisdiction fights stem from unclear or poorly implemented arbitration clauses. Here’s how to reduce the risk when you’re negotiating and drafting your contracts.

Use A Clear, Standalone Arbitration Clause

Ambiguity breeds disputes. Keep the clause simple and complete. Specify the seat (e.g. “The seat of arbitration shall be London, England”), the institution and rules (e.g. LCIA, ICC, or ad hoc under the Arbitration Act 1996), the number of arbitrators, and the language. Avoid mixing governing law, seat, and venue in a way that conflicts.

If your contract uses exceptions or carve‑outs, draft them carefully - broad carve‑outs can create arguments about whether a particular claim falls inside or outside the clause. Where you need hierarchy between conflicting terms, consider how your notwithstanding clause interacts with dispute resolution provisions.

Make Sure The Person Signing Has Authority

Section 67 challenges often turn on whether someone actually bound the company. Get signatures from authorised signatories and keep records of board approvals or delegations. If you change counterparties mid‑contract, use a proper Deed of Novation (or consider assignment vs novation) so the arbitration agreement clearly follows the rights and obligations.

Deal With Multi‑Party And Multi‑Contract Scenarios

Supply chains and projects often involve several related agreements. Decide whether disputes are consolidated or run separately and ensure the arbitration provisions align across documents. In frameworks and SOWs, repeat or clearly incorporate the arbitration clause by reference to avoid fights about incorporation.

Define Scope Thoughtfully

Broad “arising out of or in connection with” wording usually reduces scope fights. If you want some claims to go to court (e.g. urgent injunctions or IP enforcement), say so expressly and define the carve‑out precisely. Test your wording against common scenarios (misrepresentation, implied terms, statutory claims) to see what’s in or out.

Keep The Rest Of The Contract Tight

Jurisdiction disputes often ride on other drafting gaps. For example, unclear limitation periods or liability caps can push parties to argue scope instead of substance. It’s worth pairing your arbitration clause with well‑drafted risk allocations, such as a clear limitation of liability and fit‑for‑purpose warranties. When in doubt, get a professional Contract Review or bespoke Contract Drafting to ensure everything hangs together.

Don’t Forget Your Standard Documents

If you contract on standard Terms of Trade or a template Service Agreement, keep the arbitration clause consistent across your suite. A mismatch between your quote, PO terms and master agreement is fertile ground for a Section 67 debate about which set of terms actually governs.

Key Documents And Evidence You’ll Need (Whether Bringing Or Defending)

Whether you’re gearing up to challenge an award under Section 67 or defending one, get your evidence in order early. Courts move quickly on these applications, and well‑organised material saves time and cost.

• Executed contracts and any amendments, addenda or side letters.
• Proof of incorporation by reference (e.g. hyperlinks to online terms, email trails attaching T&Cs, purchase orders referring to terms).
• Authority evidence (board minutes, director resolutions, powers of attorney, or internal emails showing who could bind the company).
• Institutional arbitration rules if incorporated and any correspondence about appointing the tribunal.
• Submissions made in the arbitration about jurisdiction (to show you preserved - or failed to preserve - your objections under Section 73).
• Witness statements from those involved in negotiations, formation and signature.

If gaps appear (for example, a counterparty change that was never formalised), consider whether a belated formalisation is possible and appropriate. In live relationships, a carefully structured agreement like a novation or assignment can reduce future fights, though it won’t fix past jurisdiction defects in a concluded arbitration.

Costs, Risks And Strategy For Small Businesses

Section 67 is a powerful tool, but it’s not a free swing. Before committing, weigh up the commercial and legal pros and cons.

• Cost exposure: If you lose, you’ll likely pay a significant portion of the other side’s costs. Even if you win, there’s no guarantee of full recovery.
• Time and management attention: Section 67 often involves evidence and possibly cross‑examination, which draws key people away from the day‑to‑day.
• Settlement leverage: A credible challenge can bring parties to the table. Combine it with pragmatic offers and timelines to control cost and risk.
• Enforcement strategy: If the other side is pushing to enforce the award in England, a Section 67 challenge may be essential. If they’re enforcing abroad, consider parallel strategies in relevant jurisdictions.
• Re‑run risk: If the court remits issues to the tribunal, you may face another round in arbitration - plan for that contingency.

If you’re on the receiving end of a Section 67 challenge, focus on the basics: demonstrate a valid arbitration agreement, show the tribunal’s proper constitution and prove the dispute sits within scope. A clean, well‑organised contract suite and clear evidence can blunt a challenge early.

Finally, remember the bigger picture. Investing in robust contracts now is usually cheaper than litigating about what they mean later. If your contracts are due an update, prioritise your dispute resolution provisions alongside the commercial terms, liability caps and warranties.

Key Takeaways

• Section 67 lets a party ask the court to overturn or vary an award where the tribunal lacked substantive jurisdiction - for example, no valid arbitration agreement or a claim outside scope.
• Move fast: you typically have 28 days from the award to bring a Section 67 application, and you must preserve objections during the arbitration to avoid waiver under Section 73.
• Expect a de novo review: the court looks at jurisdiction afresh, which means evidence, documents and potentially witness cross‑examination.
• Choose the right route: keep Section 67 (jurisdiction) distinct from Section 68 (serious irregularity) and Section 69 (point of law) to protect your position.
• Prevention beats cure: clear arbitration clauses, consistent terms across your contract suite, proper authority to sign and aligned templates reduce the risk of jurisdiction fights.
• Get help early: a targeted Contract Review or bespoke Contract Drafting can align your arbitration clause with your risk strategy and avoid expensive disputes later.

If you’d like tailored advice on drafting arbitration clauses, responding to a Section 67 challenge or planning a dispute resolution strategy, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no‑obligations chat.