CHALLENGING AN AWARD

Correction of award or additional award: The parties are free to agree on the powers of the tribunal to correct an award or make an additional award. Absent such agreement, the tribunal may on its own initiative or on the application of a party:

correct an award so as to remove any clerical mistake or error arising from an accidental slip or omission or clarify or remove any ambiguity in the award, or

make an additional award in respect of any claim (including a claim for interest or costs) which was presented to the tribunal but was not dealt with in the award: s.57.

See further: CNH Global NV v PGN Logistics Ltd [2009] EWHC 977 (Comm); [2009] 1 C.L.C. 807 and Torch Offshore LLC v Cable Shipping Inc [2004] EWHC 787 (Comm); [2004] 2 All E.R. (Comm) 365.

Challenging the award: Time limit: An application challenging the award or an appeal must be brought within 28 days of the date of the award or, if there has been any arbitral process of appeal or review, of the date when the application or appellant was notified of the result of that process: s.70(3).

In Terna Bahrain Holding Co WLL v Al Shamsi [2012] EWHC 3283 (Comm); [2013] 1 All E.R. (Comm) 580 an extension of time under s.70(3) to challenge an award was refused where the application would in any event fail. However, even if the challenge would have been successful, time would not have been extended because there had been substantial delay as a result of a deliberate choice for perceived tactical advantage.

Challenging the award: Substantial jurisdiction: A party to arbitration may (upon notice to the other parties and to the tribunal) apply to the court: (a) challenging any award of the arbitral tribunal as to its substantive jurisdiction; or (b) for an order declaring an award made by the tribunal on the merits to be of no effect, in whole or in part, because the tribunal did not have substantive jurisdiction: s.67(1). Where the president of an arbitral tribunal had not been appointed in accordance with the agreed procedure his participation in an arbitration was unlawful and the award a nullity. There is no room in the field of private arbitration for the common law rule which, in some circumstances, can validate the acts of an apparent and reputed judge: Sumukan Ltd v Commonwealth Secretariat [2007] EWCA Civ 243; [2007] 3 All E.R. 342.

See also: Dallah Real Estate & Tourism Holding Co v Pakistan [2010] UKSC 46; [2011] 1 A.C. 763 and Abuja International Hotels Ltd v Meridien SAS [2012] EWHC 87 (Comm); [2012] 1 Lloyd’s Rep. 461.

Challenging the award: Serious irregularity: A party to arbitration may (upon notice to the other parties and to the tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award.

A party may lose the right to object (see s.73) and the right to apply is subject to the restrictions in s.70(2) and (3).

Serious irregularity means an irregularity of one or more of the kinds listed in s.68(2). In Atkins Ltd v Secretary of State for Transport [2013] EWHC 139 (TCC); [2013] B.L.R. 193 it was held that “serious irregularity” within the meaning of s.68 did not mean in itself an error of fact or law on the part of the arbitrator and was not to be used as a ground for challenging the factual findings or legal reasoning of an arbitrator.

For there to be a serious irregularity under s.68(2)(b) because the arbitrators had exceeded their powers, it is necessary to establish that they purported to exercise a power they did not have. The erroneous exercise of a power which the arbitrators did have involved no excess of power. In particular, s.68 is not engaged if the arbitrators merely arrived at a wrong conclusion of law or fact: Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43; [2006] 1 A.C. 221. See also Kaneria v England and Wales Cricket Board Ltd (ECB) [2014] EWHC 1348 (Comm); (2014) 164(7606) N.L.J. 16.

Only the failure by an arbitral tribunal to deal with an important or fundamental issue could be capable of amounting to a serious irregularity causing substantial injustice within the meaning of s.68(2)(d): Fidelity Management SA v Myriad International Holdings BV [2005] EWHC 1193 (Comm); [2005] 2 All E.R. (Comm) 312.

See also: Van der Giessen-de Noord Shipbuilding Division BV v Imtech Marine & Offshore BV [2008] EWHC 2904 (Comm); [2009] 1 Lloyd’s Rep. 273 and Nestor Maritime SA v Sea Anchor Shipping Co Ltd [2012] EWHC 996 (Comm).

In Compton Beauchamp Estates Ltd v Spence [2013] EWHC 1101 (Ch); [2013] 20 E.G. 107 (C.S.) it was held that, although an arbitrator’s reasoning for an award determining the rent payable by a tenant for an agricultural holding was poor, it was, save in one minor respect, just enough to explain the conclusions reached. The failure to give adequate reasons for one aspect of his decision did not give rises to substantial injustice to the landlord so as to justify setting the award aside under s.68.

Appeal on point of law: Unless otherwise agreed by the parties, a party to arbitration may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings. There can be no appeal in circumstances where the parties have agreed to dispense with reasons for the tribunal’s award: s.69.

This is a non-mandatory provision and the parties can agree to exclude it. However, very clear words are required to exclude the jurisdiction of the court to entertain an appeal. The use of the terms “final, conclusive and binding” in an arbitration clause in an agreement could not be read as excluding the jurisdiction of the court to hear an appeal: Shell Egypt West Manzala GmbH v Dana Gas Egypt Ltd (formerly Centurion Petroleum Corp) [2009] EWHC 2097 (Comm); [2010] 2 All E.R. (Comm) 442. See also Dollingstown Football Club v Irish Football Association [2011] NIQB 66.

An appeal cannot be brought except (a) with the agreement of all the other parties to the proceedings, or (b) with the leave of the court. The threshold level required to obtain permission to appeal against an arbitration award under s.69 on a question of law is a very high one. The intention behind the 1996 Act was to curtail factual challenges being disguised as legal submission: House of Fraser Ltd v Scottish Widows Plc [2011] EWHC 2800 (Ch); [2012] 1 E.G.L.R. 9.

Appeals on questions of fact are not allowed by s.69 and it is very doubtful that the court has any inherent jurisdiction to entertain such an appeal, even where the parties have agreed to such an appeal: Guangzhou Dockyards Co Ltd (formerly Guangzhou CSSC-OCEANLINE-GSW Marine Engineering Co Ltd) v ENE Aegiali I [2010] EWHC 2826 (Comm); [2011] 2 All E.R. (Comm) 595.