Bandwidth Shipping Corporation v Intaari

Under section 33 of the Arbitration Act 1996, an arbitral tribunal must give each party a reasonable opportunity to address material issues. If arbitrators appreciate that a party has missed the real point, fairness requires them to raise it. They need not, however, check whether experienced counsel has understood a point which has been clearly advanced, where they have no reason to think it has been missed.

Section 68 is a restricted longstop remedy for serious irregularity causing substantial injustice. It does not permit a disappointed party to reopen findings of fact or law by alleging procedural unfairness.

The Owners chartered an ice-classed vessel to the Charterers for an Antarctic voyage. The vessel became trapped in ice and wintered in a bay. In arbitration, the Charterers established a breach of the vessel's ice-breaking warranty and succeeded on causation through a finding that, but for 17 hours of delay, the vessel would have left Novo on 29 May and escaped through the ice belt.

The Owners sought remission of the award under section 68 of the Arbitration Act 1996. They contended that the tribunal had not given them a reasonable opportunity to answer the 17-hour point by relying on hurricane conditions. Christopher Clarke J dismissed the application: [2006] EWHC 2532 (Comm). The central issue on appeal was whether the tribunal had acted unfairly contrary to section 33.

1. Appeal dismissed. The court upheld the refusal to remit the arbitral award. Waller LJ gave the principal judgment. Gage LJ agreed with both judgments, and Lawrence Collins LJ agreed with Waller LJ's reasons.

2. A section 68 challenge required attention to the tribunal's conduct, rather than a reconsideration of whether its factual or legal conclusion was correct. The statutory remedy has a high threshold. It is reserved for serious procedural failure causing substantial injustice and cannot be used as a side door for an appeal from an arbitral decision.

3. The question whether the vessel could have left Novo before 30 May had always been a live issue. During closing oral submissions, the Charterers clearly advanced a case that it could have left a day or so earlier. The tribunal was entitled to understand that point and to regard the Owners' experienced counsel as having had an opportunity to answer it.

4. Fairness would have required the tribunal to put the point to the Owners if it had appreciated that they had missed it. That principle was consistent with The Vimeira, [1984] 2 Lloyd’s Rep 66 (CA). The tribunal had no reason to think that the Owners had missed the point or possessed an additional answer which they had not advanced. It therefore acted fairly and did not breach section 33(1)(a).

5. Lawrence Collins LJ added that section 68 is an extreme longstop remedy, as explained in Lesotho Highlands Development Authority v Impregilo SpA, [2005] UKHL 43. The modern inquiry is whether the parties had a fair opportunity to address matters material to the intended decision. Mere dissatisfaction with the result is insufficient.

• Court of Appeal (Civil Division). The Owners' appeal was dismissed: [2007] EWCA Civ 998.
• Commercial Court (Queen's Bench Division). Christopher Clarke J dismissed the Owners' application under section 68 of the Arbitration Act 1996 to remit the award: [2006] EWHC 2532 (Comm).
• Arbitral tribunal. The tribunal found that the vessel had breached its ice-breaking warranty and made an award in favour of the Charterers.