Insights and Analysis

English Court of Appeal severs part of arbitration clause to uphold parties' agreement to arbitrate and ensure enforceable award

14 April 2026

Key takeaways

Finality is a mandatory feature of arbitration: Parties cannot validly agree to mechanisms that would allow an arbitral award to be amended indefinitely or prevent it from ever becoming final.

Correction powers must be time limited: If parties wish to expand the tribunal's correction powers and time limits, they must specify a timeframe. Otherwise, the default 28-day time limits under s. 57 of the English Arbitration Act 1996 (the "Act") will apply and if parties do not adhere to them, any corrections will not be effective.

Arbitration agreements, especially bespoke provisions, must be drafted with care: Clauses intended to give certain tribunals broad flexibility (such as religious courts or alternative dispute bodies) must still operate within the statutory framework of the Act, as amended by the Arbitration Act 2025.

Party autonomy has limits: While the Act permits the parties significant autonomy, any agreement undermining the enforceability of the award may be construed or severed to uphold statutory requirements.

Unilateral contact with arbitrators is not recommended: Both parties had unilateral communications with the arbitrators or the secretary to the arbitrators. The parties submitted evidence that this is a common practice of the type of religious arbitral panel appointed in this case. Although the Court of Appeal did not address the issue as it was unnecessary to decide the appeal, it is highly unusual in arbitration more broadly. Unilateral contact with an arbitrator (or arbitrators) regarding substantive matters in the case may lead to serious consequences such as a challenge to the arbitrator(s) and/or a challenge to the award on the grounds of procedural irregularity.

The English Court of Appeal recently reaffirmed the importance of finality in arbitration by severing from an arbitration agreement a clause which prevented any award issued from ever becoming final and enforceable. The Court stressed that, as a matter of principle, English courts should uphold party autonomy and give effect to agreed terms wherever possible. However, where a clause undermines the final and binding nature of arbitration, the courts will intervene to preserve finality and uphold the parties' agreement to have their disputes resolved by arbitration.

Background

In Gluck v Endzweig & Anor [2026] EWCA Civ 145, Mr David Gluck (also referred to as the "Appellant") and Evertop Ltd ("Evertop") entered into a Share Purchase Agreement (the "SPA") pursuant to which Mr Gluck sold a 50% shareholding in Net Pex Ltd to Evertop, with Mr Chaim Yaakov Endzweig acting as guarantor (Evertop and Mr Endzweig were, together, the "Respondents").

A dispute arose between the parties regarding whether remaining instalments payable under the SPA should be reduced in accordance with a contractual price adjustment mechanism. Two arbitrators were appointed under the SPA's arbitration clause. The parties then entered into a further agreement (the "Separate Arbitration Agreement") appointing two rabbis as arbitrators, together referred to as a Beth Din (the name for a Jewish rabbinical court, but here used for the arbitral panel consisting of the two rabbis).

The Separate Arbitration Agreement granted the Beth Din authority "to amend and add to and change the judgment they have given, at any time", (emphasis added) (the "Unlimited Amendment Clause").

Over the following years, several arbitration hearings took place. The "First Award", a partial award, was issued in March 2024 and confirmed that the Respondents were entitled to a price reduction. After further hearings, a "Second Award" was issued on 28 May 2024, fixing the reduced sum payable.

Soon afterwards, Mrs Endzweig, the wife of guarantor Mr Endzweig, had two phone calls with the Beth Din. She stated that she believed there were errors in the calculations in the Second Award because it failed to account for corporation tax. The Beth Din's secretary emailed the parties, confirming that the figures were still being reviewed in line with Mrs Endzweig's concerns, and that the part of the award relating to tax "shall be withheld until a ruling is given". Mr Gluck (who had not previously been aware of Mrs Endzweig's communications with the Beth Din) also exchanged communications with the Beth Din that were not copied to the Respondents, asserting that the Second Award was final and asking for reasons to be provided for the First and Second Awards.

On 21 October 2024, Mr Gluck applied without notice under s. 66 of the Act for permission to enforce the Second Award. A judge granted permission on 8 November 2024 (the "Enforcement Order"). The Respondents applied to set aside the Enforcement Order, arguing that the Second Award was not final because the Beth Din was still reviewing it.

The first instance judgment

On 21 February 2025, another judge (in an unreported decision) granted the Respondents' application and set aside the Enforcement Order as the Second Award lacked finality. He held that:

The parties had conferred on the tribunal an amendment power significantly broader than the correction powers contemplated by ss. 57(3) - (7) of the Act (which set out the tribunal's powers to correct or supplement awards in the absence of agreement between the parties) and that the parties were entitled to agree such an expanded power pursuant to s. 57(1) of the Act.
The statutory time limits in the default regime under ss. 57(3) - (7) could not be implied into the Separate Arbitration Agreement, as the 28-day time limit for an application for correction in s. 57(4) was inconsistent with the wording "at any time" in the Unlimited Amendment Clause.
The Unlimited Amendment Clause did not mean an award could never become final. Had the arbitrators not indicated that they were reviewing the Second Award, it would have been final and enforceable under s. 66 of the Act. If repeated requests for review were made, the arbitrators could simply declare themselves functus officio (an established international arbitration doctrine that once arbitrators have rendered a decision on the issues submitted, they lack power to re-examine that decision).

Court of Appeal decision

Mr Gluck appealed to the Court of Appeal. The judgment of Lord Justice Dingemans (with which Lord Justice Phillips and Lord Justice Lewis concurred) considered three issues.

Issue 1: Is it possible to interpret the arbitration agreement to give effect to its provisions both that (i) the agreement would amount to an enforceable arbitration agreement and (ii) that the arbitrators could amend, add to and change any award they have made at any time?

Section 58 of the Act does not permit parties to agree a process under which an award may never become final

The Court accepted that the Separate Arbitration Agreement reflected an intention to create a valid arbitration agreement under the Act and that, as far as possible, effect should be given to all its terms, including the Unlimited Amendment Clause. However, the Court emphasised that s. 58(1) of the Act provides that an arbitral award is "final and binding" unless the parties agree otherwise, and that this wording does not permit parties to agree a process under which an award may never become final.

Instead, s. 58 is directed at allowing parties to adopt institutional rules that require awards to be reviewed by arbitral courts of the institution, for example Article 34 of the Arbitration Rules of the International Chamber of Commerce. Accordingly, the Unlimited Amendment Clause could not be construed as granting the arbitrators an unrestricted power to amend their awards "at any time". Such a power would prevent an award from ever reaching the point at which it could be enforced, since it could always be altered and would never be final.

The Court also rejected the judge's view that the arbitrators could simply declare themselves functus officio: the Unlimited Amendment Clause meant that the arbitrators could reverse such a declaration, making that proposed safeguard ineffective.

Section 57 of the Act requires any correction or supplement to an award to become final within a defined period

The Court further held that s. 57 of the Act could not cure the deficiency in the Unlimited Amendment Clause. Although s. 57(1) permits the parties to agree on the tribunal's powers to correct or supplement an award, this freedom is subject to the implied requirement that the award must become final at some stage. Even if the Unlimited Amendment Clause were treated as an agreement under s. 57(1), the Unlimited Amendment Clause imposed no time limit at all and therefore did not satisfy the finality requirement. The default provisions relating to amendments in ss. 57(4) and (5) of the Act did not validate the Unlimited Amendment Clause because they could not be indefinite for the reasons above.

Issue 2: Whether any part of the arbitration agreement is repugnant to the arbitration agreement as a whole, so that effect could be given to remaining parts of it

It was common ground that where clauses are inconsistent, "effect must be given to that part which is calculated to carry into effect the purpose of the contract as gathered from the instrument as a whole and the available background, and that part which would defeat it must be rejected". The Court held that the agreement between the parties was to have an arbitration agreement so that disputes could be finally resolved by arbitration by the Beth Din. The Unlimited Amendment Clause was repugnant to the arbitration agreement because it prevented finality and prevented the Beth Din from issuing an enforceable award. Further, the Unlimited Amendment Clause could not be given effect in a valid arbitration agreement because it was inconsistent with the need for a final and binding award.

The clause was therefore severed, leaving the remainder of the Separate Arbitration Agreement intact. The default rules in s. 57 of the Act applied. Given that no valid correction had been made within the statutory time limits, the Second Award stood.

Issue 3: Was the judge wrong to set aside the Enforcement Order?

For the reasons above, the Court held that the judge was wrong to set aside the Enforcement Order and that the Second Award was enforceable on its terms.

Key actions in response to this case

Ensure arbitration clauses are carefully drafted to secure a process that leads to the issue of an award that is final, binding, and enforceable.
Check that any bespoke award correction provisions do not result in a position where an award may never become final.

Authored by Annabel Maltby and Sarah Tayara.