Thyssen Canada Ltd. v Mariana Maritime SA & Anor

An arbitration award cannot ordinarily be challenged under section 68(2)(g) of the Arbitration Act 1996 merely because witnesses may have lied. The applicant must establish that the respondent was responsible for fraud or reprehensible or unconscionable conduct which procured the award and caused substantial injustice. The fraud or procurement must be established to the court’s satisfaction before remission can be considered.

A party loses the right to object under section 73 where it continues participating after knowing, or when it could with reasonable diligence have discovered, the grounds of objection. The court may also refuse an extension of the 28-day period under section 70(3), particularly where the delay reflects a deliberate decision to withhold or investigate evidence only after an adverse award. Such conduct may constitute an abuse of process.

The claimants, cargo owners, challenged two arbitration awards arising from fire damage aboard the vessel Mariana. The tribunal had rejected their unseaworthiness claim and found that the defendants had exercised due diligence.

After the substantive award, the claimants obtained evidence suggesting that hot work, rather than a smouldering cigarette, had caused the fire and that evidence given at the arbitration had been fabricated. They applied under section 68(2)(g) of the Arbitration Act 1996 to set aside or remit the awards. The first application was out of time, so an extension under section 80(5) was also sought.

The court considered whether the claimants had lost their right to object under section 73, whether time should be extended, whether the application was abusive, and whether the fresh evidence justified further consideration.

1. Application dismissed. The court refused an adjournment for a trial of the alleged perjury or fraud. The claimants’ application concerning the substantive award was out of time, and the application concerning the second award could not succeed independently.
2. Section 68(2)(g) requires the applicant to establish that the award was obtained by fraud, or procured in a manner contrary to public policy through reprehensible or unconscionable conduct attributable to the respondent. The conduct must have contributed substantially to obtaining the award and caused substantial injustice. The fact that witnesses may have lied is insufficient without responsibility on the part of the respondent. The issue would ordinarily require a trial if otherwise properly brought.
3. Under section 73, a party continues to participate until the arbitration concludes unless it clearly withdraws. That includes the period after the hearing and before publication of the award. The claimants knew by 12 November 2003 that a witness alleged hot work and dishonesty by the crew. Alternatively, they could with reasonable diligence have obtained corroborating evidence before the award was issued. Their continued participation therefore barred the objection.
4. The five-month delay was unreasonable. The factors identified in Kalmneft v Glencore and Nagusina v Allied Maritime did not justify an extension. The claimants deliberately chose not to pursue evidence which they considered damaging to their existing case, then sought to rely on it after losing. The application was also an abuse of process.
5. The fresh-evidence approach discussed in Westacre v Jugoimport was a useful comparator, but not a rigid statutory test. Sections 68 and 73 supplied the governing criteria. It was unnecessary to decide whether the new evidence would probably have affected the result.

First-instance decision. No prior appellate decision is stated in the judgment.