Margulead Ltd. v Exide Technologies

In an arbitration, a claimant has no automatic right to make the final oral submission. The tribunal may regulate the order and form of submissions, provided each party has a reasonable opportunity to present its case and address the opponent’s case, and the procedure is fair in the circumstances.

An objection to procedural irregularity must be made forthwith. Continued participation with knowledge, or the means of knowledge, of the alleged irregularity may prevent a later challenge.

Under section 68(2)(d) of the Arbitration Act 1996, failure to deal with an issue means failure to determine a claim or distinct defence, not failure to give reasons for rejecting an argument. The latter is addressed, where appropriate, through section 70(4).

Margulead applied under section 68 of the Arbitration Act 1996 to challenge an international arbitration award. Its arbitration claim had failed, while Exide’s counterclaim had also failed.

Margulead alleged that the arbitrator had seriously irregularly refused its counsel an oral reply to Exide’s closing submissions. It also alleged that the arbitrator had failed to deal with an argument that Exide had affirmed the agreement and therefore could not rely on mutual mistake.

The central issues were whether the hearing procedure was unfair, whether any objection had been waived, and whether omission of reasons for rejecting an argument constituted a failure to deal with an issue under section 68(2)(d).

1. The application was dismissed. The arbitrator had announced in advance that the final hearing would comprise one closing submission from each party, followed by a colloquy. That procedure was permissible under sections 33 and 34 of the Arbitration Act 1996. A claimant’s burden of proof did not give it an automatic right to the last word.

2. The relevant question was whether Margulead had a reasonable opportunity to present its case and deal with Exide’s case, and whether the procedure was fair overall. Exide had not introduced a novel point in its closing submissions that Margulead had not previously had an opportunity to address.

3. In any event, Margulead had not objected immediately to the refusal of an oral reply. Under section 72(1), a party that continues to participate with knowledge, or the reasonable means of discovering, the grounds of objection cannot ordinarily raise it later. The objection should have been made at the hearing.

4. The omission of reasons for rejecting the affirmation argument did not amount to a failure to deal with an issue under section 68(2)(d). The arbitrator had determined the distinct defence of mutual mistake and stated in the Correction Award that he had considered Margulead’s arguments. Section 68(2)(d) concerns failure to determine a claim or distinct defence, whereas section 70(4) provides the specific remedy for insufficient reasons.

5. The Reply Point also failed on substantial injustice. Exide had succeeded on independent defences concerning technical viability and Article 1.3, so a defect relating only to mutual mistake could not have changed the result.

First-instance application under section 68 of the Arbitration Act 1996. No prior appellate decision is stated in the judgment.