English High Court evaluates usual authority as part of section 67 challenge (s.67 Arbitration Act)

On 19 December 2025, the English High Court delivered judgment in a challenge under section 67 of the Arbitration Act 1996 (the "Act"), addressing the tribunal's jurisdiction and the authority of a law firm to bind corporate clients to an arbitration agreement.

The decision provides important clarification as to the scope of usual authority.

In this Legal Update, we highlight key aspects of the decision by Mr. Justice Henshaw. We also highlight how section 67 applications will evolve once court rules give effect to the revised section 67 procedure contemplated by the Arbitration Act 2025 ("2025 Act"). 

Background

The Claimants ("A1", "A2", and "A3"), represented by Mayer Brown, sought set aside of a London-seated LCIA award on the basis that a letter of engagement (the "P Agreement")—entered into by a US law firm ("C") and service provider Defendant ("P")—did not bind the Claimants.

Central to the set-aside application was a dispute as to whether C had usual authority to bind A1 and A3 to the P Agreement and, relatedly, whether the tribunal had jurisdiction over A1 and A3. In the LCIA award, this dispute was decided in the Defendant's favour, with the result that the tribunal found itself to have jurisdiction over A1 and A3.

P's case on this usual authority dispute was based upon the idea that:

• C had usual authority to bind A3 to the P Agreement because A3 had granted C authority to act on its behalf in relation to another arbitration (the "A3 Arbitration"); and
• P had authority to bind A1 to the P Agreement because A1 had granted C actual authority to enter into an equivalent agreement with P (the "S Agreement").

Usual Authority

In relation to A3, the court held that, while A3 had engaged C to act on its behalf in relation to the A3 Arbitration, the usual authority of solicitors does not extend to binding clients to contracts with third-party service providers such as P, particularly where such contracts include contingent success fees or other obligations beyond the ordinary course of litigation management, as the P Agreement did.

In doing so, the court took care to distinguish between a solicitor's authority to contract as principal for litigation support services (with costs passed on as disbursements) and its authority to bind the client directly to such contracts. The court emphasised that there was no evidence or legal authority supporting the proposition that solicitors have the usual authority to bind clients to direct contractual relationships with service providers, particularly where they feature terms akin to those in the P Agreement.

In relation to A1, the court found that A1 authorising C to approach P to conclude a similar agreement—the S Agreement—did not amount to a representation that C had the authority required to bind A1 to either the P or S Agreement. Similarly, the fact that C simultaneously signed the P and S Agreements, whilst in fact having actual authority in relation to one, did not amount to a representation by A1 that C was authorised to bind A1 to either agreement.

On this basis, the High Court found that C did not have authority to bind A1 or A3 to the P Agreement. For this reason, among others, the High Court set aside the award as against A1 and A3, finding that the tribunal lacked jurisdiction over them. 

This constitutes a rare example of a successful jurisdictional challenge under section 67 of the Act. The court's annual report for 2023-2024 notes that there were 24 such challenges lodged over that period, with only one succeeding out of the eight so far decided.

Key Takeaways

With respect to usual authority then, the key takeaways from this decision appear to be that:

1. A solicitors' usual authority does not extend to binding clients to direct contracts with third-party service providers for litigation support, particularly where contingent fees or similar obligations are involved; and
2. Apparent authority requires a clear representation by the principal and cannot be inferred merely from an agent's actual authority in related matters.

Note on Section 67

With regards to section 67 procedure, as the arbitral proceedings in question commenced before the effective date of the 2025 Act, there was a de novo review (i.e., full rehearing) by the English court for the purpose of these section 67 proceedings.

By contrast, the 2025 Act empowers the Civil Procedure Rules Committee to make new court rules which streamline the section 67 process so that in circumstances where a party has objected to the tribunal's jurisdiction during the arbitration, and the tribunal ruled on its jurisdiction, no new grounds of objection or new evidence will be admitted and no evidence re-heard before the court (subject to limited exceptions).

These court rules have not yet been implemented, but, once in force, they will lead to a "lighter" judicial review under section 67, with an increased focus on the tribunal's competence to determine its own jurisdiction.