Fidelity Management SA & Ors v Myriad International Holdings BV & Ors

An application under section 68 of the Arbitration Act 1996 is a limited supervisory remedy. The court should read an award reasonably and commercially, with particular caution because the parties chose arbitration and accepted the tribunal’s factual findings.

Under section 68(2)(d), the omitted matter must be an important or fundamental issue put to the tribunal. A failure to deal with an issue differs from inadequate reasoning or failure to address every argument. The provision does not permit the court to review whether the tribunal reached the right answer. Where the award identifies and answers the essential issue, no serious irregularity is established merely because a party criticises the reasoning.

The claimants applied under section 68 of the Arbitration Act 1996 to challenge a partial award of an arbitral tribunal of the London Court of International Arbitration.

The application relied on section 68(2)(d), alleging that the tribunal had failed to deal with an issue concerning whether a derogation under Greek competition law satisfied a contractual condition precedent requiring unconditional regulatory approval. The parties had submitted lists of the outstanding issues, and the tribunal identified the question as one of three main issues in the arbitration.

The central question was whether the award had failed to determine an essential issue, or whether the complaint went only to the tribunal’s reasoning.

1. Application dismissed. The tribunal had dealt with the issue put to it. The challenge therefore did not establish serious irregularity or substantial injustice under section 68.
2. Section 68 of the Arbitration Act 1996 is a long-stop remedy for extreme cases in which the arbitral process has seriously gone wrong. The court has no general supervisory jurisdiction over arbitrations. The award should be read in a reasonable and commercial manner, without a narrow textual analysis designed to identify faults.
3. Section 68(2)(d) concerns failure to deal with an important or fundamental issue which was put to the tribunal and whose omission could cause substantial injustice. It does not require arbitrators to set out every step of their reasoning or address every argument. Deficiency of reasoning is distinct from failure to deal with an issue and is addressed by the separate remedy under section 70(4).
4. The essential issue was whether the particular derogation granted on 22 October 2002 satisfied the competition condition precedent. The tribunal identified that issue, set out the relevant Dutch-law approach to contractual interpretation, examined the nature and effect of the derogation under Greek law, considered the surrounding circumstances, and concluded that the condition was not satisfied.
5. The complaint that the tribunal had become diverted from contractual construction, or had failed to consider whether the agreements could be implemented subject to later adjustment, was therefore a criticism of its reasoning. It was not a failure to determine an issue put to it. The application was dismissed, with costs and the terms of the order left for determination when judgment was handed down.