English Commercial Court Considers Rare Section 69 Appeal

The English Commercial Court dismissed a section 69 appeal, emphasising that courts should be cautious in overturning the tribunal's findings when contractual interpretation turns on a complex factual matrix

Introduction

In Aston Martin MENA Limited v Aston Martin Lagonda Limited [2025] EWHC 2531 (Comm), the English Commercial Court (Commercial Court or the Court) dismissed an appeal brought by Aston Martin MENA Limited (AMMENA) under section 69 of the Arbitration Act 1996 (Arbitration Act) against an arbitral award in favour of Aston Martin Lagonda Limited (AML).

On 6 October 2025, the Commercial Court found in favour of AML and dismissed AMMENA's appeal. In his judgment, Bright J emphasised two points of principle: (1) while permission to appeal under section 69 requires the tribunal's decision to be "obviously wrong", the substantive appeal itself only requires the appellant to show the tribunal was "wrong" on the relevant question of law; and (2) a court should be "slow to be persuaded to overturn" a tribunal's decision on contractual interpretation, particularly where the tribunal has considered extensive factual matrix evidence.

Background

AML is a luxury car manufacturer within the Aston Martin group. AMMENA is an independent company which, under a Distribution Agreement dated 19 April 2018 (Distribution Agreement), became AML's exclusive distributor in the Middle East and North Africa. AMMENA sells cars to retail dealers in the region, who in turn sell to retail customers.

Article 4(A)(1) of the Distribution Agreement governed the price AML was to charge AMMENA (Contract Price). It provided that the Contract Price (a) "shall not be materially higher than the UK factory price applicable to other territories"; and (b) "shall be in line with that applicable to other territories for equivalent vehicles with similar specifications".

AML only sells cars to distributors in two other regions: North America and China. However, those distributors are group companies (Captive Distributors), and the price paid is referred to internally by AML as the internal transfer price (Internal Transfer Price or ITP). In all other regions, AML sells directly to independent retail dealers who pay a price referred to internally by AML as the dealer net price (Dealer Net Price or DNP).

The Arbitration

A dispute arose between AMMENA and AML regarding several aspects of the Distribution Agreement, including the Contract Price. AMMENA argued that under Article 4(A)(1), as a distributor, it should be charged a price comparable to that paid by other distributors. Since AMMENA is AML's only independent distributor, it contended that the Contract Price should reflect the ITP charged to Captive Distributors. AML, by contrast, argued that the appropriate comparator was the DNP charged to retail dealers in Germany.

AMMENA referred the dispute to arbitration under the UNCITRAL Rules (the Arbitration). The tribunal considered it to be common ground that the commercial purpose of Article 4(A)(1) was to maintain "a roughly level playing field between different territories" which "requires a like-for-like comparison at a reasonably high level of generality".

In interpreting Article 4(A)(1), the tribunal applied the principles of contractual interpretation set out by Lord Neuberger in Arnold v Britton [2015] UKSC 36 and Lord Hodge in Wood v Capita Insurance Services Ltd [2017] UKSC 24. Its task was to "consider the ordinary meaning of the words used, in the context of the contract as a whole and the background knowledge reasonably available to the Parties at the time".

In an award dated 18 November 2024 the tribunal held that the Contract Price must reflect "prices fixed in the context of a commercial arm's length relationship". It did not consider the Internal Transfer Prices to be commercial arm's length arrangements, but more "akin to accounting tools [...] subject to jurisdiction-specific tax and regulatory requirements". Accordingly, the tribunal held that under Article 4(A)(1), AML was entitled to charge AMMENA the DNP charged to retail dealers in Germany.

The Commercial Court's Decision

AMMENA challenged the tribunal's interpretation of Article 4(A)(1), seeking leave to appeal on the basis that this decision was "obviously wrong" pursuant to section 69(3)(c)(i) of the Arbitration Act and was granted leave to appeal the decision before the Commercial Court.

Threshold of Proof

As a matter of threshold, AML argued that for the Commercial Court to allow AMMENA's appeal, it must conclude that the tribunal's decision was "obviously wrong". AML argued that this was the same standard as that applied when seeking leave to appeal under section 69(3)(c)(i) of the Arbitration Act.

Bright J rejected this argument. He found no support for AML's position in the wording of section 69, citing the authorities of Fehn Schiffahrts GmbH & Co. KG v Romani SpA [2018] EWHC 1606 (Comm), Regal Seas Maritime SA v Oldendorff Carriers GmbH & Co. KG [2021] EWHC 566, and CVLC Three Carrier Corp v Arab Maritime Petroleum Transport Co. [2021] EWHC 551 (Comm). Instead, he clarified that for the substantive appeal, AMMENA only needed to show that the tribunal was "wrong and that the question of law that the appeal identifies should now be given a different answer".

Factual Matrix

Both parties made submissions regarding factual matrix evidence before the Commercial Court. AMMENA asserted that it knew AML had no other independent distributors, while AML contended that AMMENA was unaware of the existence of Captive Distributors in North America and China. Notably, neither party challenged the other's factual submission in this regard. However, the Commercial Court declined to make new factual findings, relying solely on those established in the arbitral award.

Bright J specifically noted that "a Court which has to determine an issue of contractual interpretation on the basis of very limited materials (typically, the Award and the contract) is simply not in the same position as a Tribunal which conducted a multi-day evidentiary hearing". He acknowledged that, lacking the tribunal's depth of knowledge about the factual matrix, the Court was unable to undertake the same detailed interpretative process described in Arnold v Britton and Wood v Capita Insurance Services Ltd. He concluded that, in cases where the factual matrix is significant, the courts should be cautious about overturning the tribunal's conclusion.

Commercial Court's Interpretation of Article 4(A)(1)

The central issue between the parties was whether Article 4(A)(1) restricted the Contract Price to prices charged to Captive Distributors, or to prices fixed in arm's length commercial relationships. Bright J considered that the parties meant the latter, reasoning that it would be unusual "for commercial parties to agree that one party can fix the price payable to it by reference to its own internal prices, which it sets unilaterally as accounting tools". Additionally, the language of Article 4(A)(1) did not expressly limit the Contract Price to prices charged to distributors, nor did it expressly exclude prices charged to retail dealers. Bright J acknowledged that his view might have differed if the factual matrix had shown that both parties knew AMMENA was AML's only independent distributor.

The Commercial Court therefore dismissed the appeal. Bright J noted one qualification: if clarification was needed on whether prices charged by Captive Distributors to retail dealers could be used as comparators, the Court was open to further submissions, though this point was peripheral.

Comment

The Court's (Bright J) decision highlights two important principles for parties considering an appeal against an arbitral award under section 69 of the Arbitration Act. First, the threshold for overturning a tribunal's decision at the substantive appeal stage is lower than the threshold for obtaining permission to appeal. While permission to appeal under section 69(3)(c)(i) requires the applicant to show that the tribunal's decision was "obviously wrong", once permission is granted, the appellant need only show that the tribunal was "wrong" on the relevant question of law.

Second, the Court's decision also highlights the significant weight the courts place on the arbitral tribunal's findings, especially when contractual interpretation turns on complex factual matrix evidence. This deference reflects the reality that tribunals are often better placed than the Court to assess the full factual background, having considered much more detailed evidence during the arbitration. As such, English courts are generally reluctant to overturn arbitral awards, reinforcing the reputation of England and Wales as an arbitration-friendly jurisdiction where arbitral decisions are respected and rarely set aside, save in exceptional cases where something has gone very badly wrong in the arbitral process.

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