ASM Shipping Ltd of India v TTMI Ltd of England

Where the High Court determines an application under section 68 of the Arbitration Act 1996, its grant or refusal of relief remains a decision under that section even if its reasoning is wrong or obviously wrong. Section 68(4) therefore prevents the Court of Appeal from granting permission when the High Court judge has refused it.

A domestic court does not violate article 6 merely by reaching an allegedly erroneous decision about apparent bias or waiver. The Convention permits domestic law to determine the grounds for challenging an arbitral award, provided that any judicial control which is available is exercised through a fair and impartial procedure.

The shipowners sought to challenge an arbitral award under section 68 of the Arbitration Act 1996, alleging serious irregularity arising from the apparent bias of the third arbitrator. Morison J found that the arbitrator should have recused himself after objection was taken. He nevertheless held that the shipowners had waived the irregularity by proceeding, taking up the award and failing promptly to seek the arbitrator’s removal.

The Commercial Court dismissed the section 68 application and refused permission to appeal: [2005] EWHC 2238 (Comm). The shipowners applied to the Court of Appeal, contending that the waiver ruling was not a decision under section 68 or, alternatively, that the refusal to set aside the award violated article 6. The central issue was whether section 68(4) left the Court of Appeal with jurisdiction to entertain that application.

1. The application for permission to appeal was dismissed unanimously. Morison J had jurisdiction to grant or refuse the section 68 application. His refusal of relief, including his determination that apparent bias had been waived, was a decision under section 68. His refusal of permission to appeal was likewise a decision under that section. Section 68(4) consequently prevented the Court of Appeal from granting permission, even if the substantive decision was wrong or obviously wrong.

2. The position differed from Cetelem SA v Roust Holdings Ltd [2005] EWCA Civ 618. There the High Court had purported to exercise a jurisdiction which section 44 did not confer, so its order was not a decision under the relevant section. In the present case the judge possessed jurisdiction over the application and merely decided it adversely to the shipowners. Describing waiver or estoppel as a defence to a prima facie entitlement did not change the statutory character of that decision.

3. The Court of Appeal’s residual jurisdiction was not engaged. Morison J had provided a public and impartial hearing both on the section 68 application and on permission to appeal. The alleged partiality concerned the private arbitral tribunal, not the reviewing court.

4. Article 6 does not establish an overarching rule that every arbitral award affected by apparent bias must be set aside. Parties choosing arbitration renounce the ordinary judicial procedure to an important extent. Domestic systems may determine which objections can be waived and which grounds justify setting aside an award. Convention scrutiny concerns the applicable legislative framework and whether the judicial control which it provides was exercised fairly and impartially.

5. An erroneous domestic decision does not, without more, violate article 6. The Convention is concerned with procedural fairness rather than the merits of the challenged decision. There was no realistic argument that Morison J’s own procedure contravened the shipowners’ Convention rights.

6. It made no difference whether the judge’s waiver ruling arose under section 73 of the Arbitration Act 1996 or at common law. In either event, permission to appeal without the judge’s leave remained prohibited.

1. Court of Appeal (Civil Division): The court unanimously dismissed the application for permission to appeal: [2006] EWCA Civ 1341. Section 68(4) of the Arbitration Act 1996 deprived it of jurisdiction because the Commercial Court’s dismissal and refusal of permission were decisions under section 68.

2. High Court, Commercial Court: Morison J found that the third arbitrator should have recused himself but held that the shipowners had waived the apparent bias. He dismissed their section 68 application and refused permission to appeal: [2005] EWHC 2238 (Comm).