The Technology and Construction Court (TCC) has held that it did not have jurisdiction to extend time for commencing arbitration under section 12 of the Arbitration Act 1996. The arbitration clause in question was in an insurance policy and provided that any dispute between the insured and the insurer regarding the insurer's liability under the policy was to be referred to arbitration within nine months of the dispute arising, failing which the claim would be deemed to have been abandoned. No arbitration was commenced and the claimants, who were making claims under the Third Parties (Rights against Insurers) Act 1930, sought an extension of time to commence arbitration.

Edwards-Stuart J held that the English courts did not have jurisdiction under section 12 of the Arbitration Act 1996, on the basis that the insurance policy was governed by Irish law. He considered that any application should be made to the Irish courts.

The judge's reasoning for his decision is somewhat surprising, given section 2 of the Arbitration Act 1996. Under section 2, the exercise of the court's power to extend time for commencing arbitration under section 12 depends not on the governing law being English, but on the seat of arbitration being in England and Wales or Northern Ireland. However, in appropriate cases, the court may act in support of the arbitral process where there is no designated seat of arbitration if there is a sufficient connection with England and Wales or Northern Ireland. In this case, there does not appear to have been a designated seat, but the insurer conceded that in the event of an arbitration, the seat would be designated as England and Wales. It may be that the judge considered that, in the absence of a designated seat, there was not a sufficient connection with England for the purposes of section 2. Given the insurer's concession, the decision is nevertheless surprising. (William McIlroy Swindon Ltd & another v Quinn Insurance Ltd [2010] EWHC 2448 (TCC) (12 October 2010).)