The High Court’s recent decision in Djanogly v. Djanogly [2025] EWHC 61 (Ch) is a rare example of a successful challenge to an arbitration award under s.68 of the Arbitration Act 1996. It also highlights a feature of English-seated arbitration that could have a major impact on the outcome of a claim.  The successful applicant was here able to raise a time bar defence under English law, even though he could not have done so under the governing law chosen by the parties.

Facts

The case arises from a very long-running family dispute between Rabbi Saul Djanogly (“SD”), his father David (“DD”), and his brother Avrom (“AD”).  The High Court proceedings were brought by SD to challenge a 2022 award of the Golders Green Beth Din of the Union of Orthodox Hebrew Congregations (the “Tribunal”), ordering SD to pay DD approximately £100,000, which the Tribunal determined to be outstanding balance of a loan made by DD to SD at some point between 1985 and 1990.¹

The arbitration had been initiated by DD and AD in 2018, after earlier attempts at resolution had failed,² and was concerned with SD’s maintenance obligations to his father.³  The parties agreed that their dispute should be determined according to Jewish law (halacha), but also permitted the Tribunal to use its discretion.⁴

SD challenged the award on several grounds, under ss.67 and 68 of the Arbitration Act 1996.  While most of those challenges were dismissed, his argument that the Tribunal had failed to deal with his time bar defence succeeded under s.68(2)(d) (“failure by the tribunal to deal with all the issues that were put to it”).

Failure to Deal with the Time Bar Defence

SD’s time bar defence relied on the application of English law, rather than Jewish law, to determine the limitation period applicable to the claim against him.

Under s.13 of the Arbitration Act 1996, “[t]he Limitation Acts apply to arbitral proceedings as they apply to legal proceedings”.  Those “Limitation Acts” are the Limitation Act 1980 and the Foreign Limitation Periods Act 1984, with the latter providing, in relevant part:⁵

1 Application of foreign limitation law.

(1) …[W]here in any action or proceedings in a court in England and Wales the law of any other country falls (in accordance with rules of private international law applicable by any such court) to be taken into account in the determination of any matter—

(a) the law of that other country relating to limitation shall apply in respect of that matter for the purposes of the action or proceedings…; and

(b) …the law of England and Wales relating to limitation shall not so apply. …

Thus, in an English-seated arbitration, if the parties choose the law of another country to govern their dispute, then (subject to limited exceptions) the applicable limitation period will be determined by the relevant foreign law.

However, Jewish law is not “the law of any other country”.  Therefore, SD argued, the Foreign Limitation Periods Act 1984 was not engaged and English law (specifically the Limitation Act 1980) governed limitation, with the result that DD’s claim for repayment—which had first been raised as long ago as 2013 and related to loans dating back to the late-1980s⁶—was time-barred.⁷  SD contended that the Tribunal had failed to deal with this argument in its award.

The Court’s Decision

Miles J agreed with SD that the time bar defence had “bec[o]me one of the key issues in the dispute” but that “[n]othing at all was said in the award about” it and “[t]here was nothing to suggest that the Tribunal considered it.”

He found that this had caused SD “substantial injustice”.  The Foreign Limitation Periods Act 1984 was not engaged and, therefore, the Limitation Act 1980 applied (as SD had contended).  It was also “seriously arguable” that DD’s claim for repayment was contractual or tortious in nature and that it would be subject to the usual six-year limitation period under English law.⁸  Thus, “had the Tribunal… addressed the Limitation Defence, they might well have reached a conclusion favourable to SD”.⁹  In other words, the outcome of the arbitration might have been different.

Comment

It is difficult to disagree with the Judge’s conclusion.  But the decision in Djanogly nevertheless leaves important questions unanswered regarding the apparent tension between English law's mandatory application of the “Limitation Acts” under s.13 of the Arbitration Act 1996, and parties’ intentions when they opt for a non-state governing law, such as halacha or sharia, or an international trade convention (e.g., the Vienna Convention).¹⁰ This is not merely an academic concern.  Although many commercial arrangements are likely to be governed by the law of a state, there are important exceptions.  The $4.5+ trillion (and growing) Islamic finance industry provides many examples.¹¹

Djanogly suggests that despite parties’ choice of non-state law, English-seated tribunals will apply English law limitation periods.  That might well come as a surprise to parties who, having chosen a non-state system of law to govern their relationship, later find—contrary to their expectations—that a time bar defence is (or is not) available when a dispute arises.

For this reason, it would have been helpful if the Court had gone on to consider SD’s alternative application for permission to appeal on a point of law under s.69 of the Arbitration Act 1996.  A decision would likely have answered some of the remaining questions about whether and (if so) how English law limitation periods can be disapplied or varied when a non-state governing law is chosen, despite the mandatory nature of s.13 of the Arbitration Act 1996¹² and the inapplicability of the Foreign Limitation Periods Act 1984.¹³  For instance: can parties agree to vary the limitation periods that would otherwise apply under the Limitation Act 1980 by contract (given that this would usually be possible in the case of an English-law governed contract)?  If so, is the choice of non-state governing law sufficient to allow such agreement to be inferred?  Or would any such agreement need to be express?  However, having found for SD on the s.68 challenge, Miles J did not need to decide these issues.¹⁴

For now, parties would be astute to ensure that, where they intend to choose a non-state system of law to govern their substantive relationship and arbitration in England to resolve their disputes, the consider carefully how limitation periods will be handled and, if necessary, make express contractual provision for the limitation regime that they want to apply.

¹See Djanogly, at [83].

² Id., at [24].

³ Id., at [8] and [13].  The Tribunal directed that other claims made by AD against SD, and counterclaims made by SD against both DD and AD, should be determined later, in a separate award.  See [7].

⁴ Id., at [27].

⁵ Foreign Limitation Periods Act 1984, s.1 (emphasis added).

⁶See, Djanogly, at, e.g., [9] and [15].

⁷Id., at [148].

⁸ Id., at [88] and [152(i)].

⁹ Id., at [152].

¹⁰ The United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980), supplemented by the United Nations Convention on the Limitation Period in the International Sale of Goods (New York, 1974), as later amended.

¹¹ Valuation of global Islamic finance assets as of 2022.  ICD – LSEG Islamic Finance Development Report 2023.  Available at: https://solutions.lseg.com/IslamicFinance_ICD_LSEG#form13146. 

¹² Pursuant to s.4(1) and Schedule 1 of the Arbitration Act 1996.

¹³ Djanogly, at [150].

¹⁴ To dispose of the s.68 challenge, it was only necessary for the Judge to find that, but for its omission, the Tribunal “might have” reached a different conclusion.  He was explicit that he “d[id] not express a more concluded view” than that.  Id., at [152], [155] and [159].

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