L Brown & Sons Ltd v Crosby Homes (North West) Ltd

Time limits for court intervention in arbitration reflect the finality and expedition policies of the Arbitration Act 1996. In an application to extend the 28-day period for a challenge under section 68, the primary considerations are the length and cause of the delay and the reasonableness of the applicant’s conduct. The apparent strength of the proposed challenge is relevant, but is not a primary factor. An intrinsically weak application weighs against an extension.

Under section 68(2)(g), deliberate non-disclosure may amount to reprehensible conduct contrary to public policy, particularly where disclosure was ordered. Non-disclosure of documents not ordered or agreed to be disclosed will not ordinarily suffice unless connected with other fraudulent or reprehensible conduct. The court should be slow to revisit an arbitrator’s credibility findings, especially where credibility was central to the arbitration.

Brown sought an extension of time to serve an application under section 68(2)(g) of the Arbitration Act 1996 challenging an arbitration award. The award rejected Brown’s claim to completion bonuses and related waivers of liquidated damages.

Brown relied on documents disclosed in a later arbitration, alleging that they should have been disclosed in the first arbitration and demonstrated that Crosby’s witnesses had lied. The application was 66 days late. The central issues were whether the delay was reasonably explained, whether the proposed section 68 challenge had sufficient strength to justify an extension, and whether the alleged non-disclosure or deception could amount to serious irregularity causing substantial injustice.

1. Application dismissed. Brown had delayed 66 days beyond the statutory period. The delay was conscious and inadequately explained. The work required to formulate the application could have been delegated to an assistant solicitor or junior counsel and did not justify waiting for further responses or meetings.
2. The court adopted the approach in AOOT Kalmneft v Glencore International AG [2002] 1 Lloyd’s LR 128. The length of delay, its cause, and the reasonableness of the parties’ conduct were the primary factors. Prejudice and the continuation of the arbitration were less significant. The strength of the proposed section 68 application was relevant but secondary: a weak case counted against an extension, while an ordinary case added little weight.
3. The proposed challenge was intrinsically weak. The arbitrator had made detailed credibility findings after hearing the principal witnesses. Most suggested grounds of challenge concerned material available at the arbitration and could not properly be used to reopen those findings.
4. Under section 68(2)(g) of the Arbitration Act 1996, deliberate withholding of documents ordered to be disclosed may in appropriate circumstances constitute reprehensible conduct contrary to public policy. Non-disclosure of documents not ordered or agreed to be disclosed would ordinarily be insufficient unless it formed part of other fraudulent or reprehensible conduct.
5. A demonstrable deliberate and material lie going to the root of the dispute could satisfy the public-policy limb, but the applicant must show that the award depended on the lie or deception and that substantial injustice resulted. Courts should be very slow to permit a section 68 application to re-litigate credibility issues entrusted to the arbitrator, save in exceptional circumstances.
6. The documents were either neutral, supportive of Crosby’s case, or incapable of showing that the alleged lies affected the award. The alleged failures in disclosure appeared inadvertent, and no sufficient basis existed for concluding that Crosby had procured the award by fraud or unconscionable conduct.