ABB AG v Hochtief Airport GmbH & Anor

A challenge under section 68 of the Arbitration Act 1996 is a supervisory remedy, not an appeal on the merits. The applicant must establish a serious irregularity which has caused, or will cause, substantial injustice. The threshold is high and the jurisdiction operates as a longstop in extreme cases. A tribunal need not refer every inference or proposed reasoning back to the parties where the essential issues and evidential building blocks were fairly in the arena. Deficient reasoning is distinct from a failure to deal with an essential issue and may require an application for further reasons under section 70(4), rather than a section 68 challenge. The court should read an award reasonably and commercially, respecting the autonomy of international arbitration.

ABB challenged an award made in a London-seated international arbitration under the LCIA Rules. The tribunal had declared void ABB’s purported transfer of its shares in Athens International Airport SA to Horizon and the registration of that transfer. The underlying dispute was governed by Greek law and concerned restrictions in the Airport Development Agreement.

ABB alleged that the tribunal had decided the case on an unargued basis, failed to determine a Greek-law issue, and acted unfairly by refusing disclosure relevant to the parties’ negotiations. The application was made under section 68 of the Arbitration Act 1996.

1. The challenge was dismissed. The court held that the section 68 jurisdiction is narrowly confined. Serious irregularity requires substantial injustice, and the provision is intended to support arbitration rather than permit judicial reconsideration of the merits.
2. The tribunal had not decided the case on an impermissibly new basis. Whether the 1999 agreements breached the contractual transfer restrictions, and whether the later transaction was part of the same arrangement, had been fully ventilated in the evidence and submissions. The essential building blocks of the tribunal’s conclusion were therefore in the arena. The tribunal was not required to invite further submissions on its analysis of those materials.
3. The tribunal’s compressed reasoning on Greek good faith and the refusal to accept Horizon’s declaration was, at most, a deficiency in reasons. The issue whether Hochtief had acted in bad faith had been dealt with. Section 68(2)(d) was concerned with failure to decide essential issues, not failure to explain every argument or reasoning step. Nor was there any basis for concluding that the tribunal had failed to apply Greek law or exceeded its powers under section 68(2)(b).
4. The refusal of ABB’s disclosure request did not constitute unfairness or substantial injustice. The tribunal was entitled under the applicable evidential rules to exclude documents lacking sufficient relevance or materiality. The documents could not have affected the tribunal’s principal finding that ABB’s negotiations and agreements were a device to circumvent the contractual restrictions.
5. The court reiterated that it should read an award in a reasonable and commercial manner and respect the autonomy of international arbitration. The award was upheld and the section 68 challenge failed.

First-instance application to the Commercial Court under section 68 of the Arbitration Act 1996. The challenge to the arbitral award was dismissed.