In SOS Corporación Alimentaria, SA and anotherr v Inerco Trade SA [2010] EWHC 162 (Comm), Hamblen J confirmed that the jurisdiction to extend contractual time limits (under section 12 of the Arbitration Act 1996 (the Act)) applies to Federation of Oils, Seeds and Fats Associations (FOSFA) arbitration. However, he noted that, where there is an arbitral process in place for seeking time extensions, a section 12 application will have little prospect of success.

Section 12 of the Act permits the court to extend contractual time limits for the commencement of arbitration where there are circumstances outside the reasonable contemplation of the parties and it would be just to extend time.

Rule 2 of the FOSFA Arbitration Rules stipulates contractual time limits for the commencement of arbitration proceedings. Rule 2(d) provides that, where such time limits are not complied with, and such non-compliance is "raised by the respondents as a defence", then "claims shall be deemed to be waived and absolutely barred unless the arbitrators, umpire or Board of Appeal...shall, in their absolute discretion, otherwise determine". There is an appeal from the tribunal's decision to the FOSFA Board of Appeal.

In this case, following the FOSFA Board of Appeal's refusal to extend time under rule 2(d), the claimants applied to court to extend time under section 12. The defendant argued that section 12 did not apply, because rule 2(d) imposed a double trigger for the barring of a claim: first, failure to comply with the rule 2 time limits, and second, reliance on such non-compliance as a defence.

Hamblen J rejected this argument, holding that the "essential trigger" under rule 2(d) was the non-compliance with time limits, and that, as such, it fell within the scope of section 12. On the facts, there were circumstances beyond the reasonable contemplation of the parties, but he held that it would not be just to extend time. He relied, in particular, on the existence of an arbitral process for obtaining an extension of time. He endorsed the view of Mance J in The Seki Rolette [1998] 2 Lloyd's Rep 638 that, in such cases, the section 12 application will have "little realistic prospect of success". He further doubted the relevance of pre-1996 authorities.

The judgment confirms that, while in theory section 12 applies to rule 2 of the FOSFA Arbitration Rules, in practice, it may be difficult to persuade a court to grant an extension of time to commence FOSFA arbitration. The judgment also contains some helpful discussion of the approach to the court's discretion under secton 12, and the relevance of pre-Act authority.