In a recent decision, the English Commercial Court held that the contention that an arbitral tribunal had ignored or failed to have regard to evidence relied on by one of the parties could not form the basis of an allegation of serious irregularity within section 68(2) of the Arbitration Act.
Section 68 of the Arbitration Act 1996 (the Act) permits a party to challenge an arbitration award on grounds of serious irregularity. It provides:
“(1) A party to arbitration proceedings 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…”
The serious irregularity complained of must be one which has caused, or will cause, substantial injustice to the applicant. The irregularity can relate to the tribunal, the proceedings or the award but must fall within one of the following grounds set out in section 68(2) of the Act:
According to the House of Lords in Lesotho Highlands Development Authority v Impregilo SpA and others  1 AC 221, section 68(2) is a “closed list”. A Report by the Department Advisory Committee on Arbitration noted that the remedy is intended to be
“only available in extreme cases where the tribunal had gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected”.
In this recent case, UMS applied to the Commercial Court to set aside an award made in favour of Great Station Properties. UMS alleged that the tribunal had failed to comply with its general duty to act fairly and impartially, and failed to deal with all the issues that were put to it.
A major part of UMS’ challenge centred on the tribunal’s perceived lack of reconciliation of its findings with the countervailing evidence and arguments and the fact that evidence that was supposedly favourable to UMS was not mentioned in the award. UMS did recognise that the tribunal is not compelled to refer to the competing evidence and arguments in its award, but argued that this was an exceptional case; there was a “wholesale failure” in this case for the tribunal to consider “large chunks of crucial evidence”.
Following consideration of a wealth of case law in this area, Teare J found that “a contention that the tribunal has ignored or failed to have regard to evidence relied upon by one of the parties cannot be the subject matter of an allegation of a serious irregularity within section 68(2)(a) or (d)“. He gave four key reasons for this decision:
The decision in UMS is unsurprising but nevertheless a helpful reminder that the grounds for challenging an award under section 68 of the Act are narrow. Interestingly, Teare J accepted that there might be circumstance where overlooked documents amount to a serious irregularity, for example in circumstances where a tribunal admits it has overlooked documents, but absent such an admission, it is not for the court to investigate the evidence to see whether it is so.