A.K.Kablo Imalat SAN VE TIC A.S. v Intamex S.A.

An arbitral award must be read as a whole, fairly and commercially. The court should avoid minute textual analysis directed at finding errors or inconsistencies. A challenge under section 68 of the Arbitration Act 1996 cannot succeed where the tribunal rejected the applicant’s contractual case after the parties had a full opportunity to address it. The court should not decide hypothetical questions based on findings the tribunal did not make. Leave to appeal under section 69 requires an error of law that is sufficiently clear to justify intervention. Remission for further reasons under section 70 is unnecessary where the award contains clear findings and reasons enabling the court to determine the proposed appeal.

The claimant seller obtained an arbitration award against the defendant buyer arising from a CIF sale of copper cathode. The buyer challenged the award under section 68 of the Arbitration Act 1996, arguing that the tribunal had relied on an unargued variation of the contractual pricing mechanism and thereby committed a serious irregularity. The buyer also sought leave to appeal under section 69, alleging errors of law concerning the pricing mechanism and repudiation, and sought remission under section 70 for further reasons.

The central issue was what the tribunal had actually decided when the award and its subsequent clarification were read together.

1. Construction of the award. The award had to be read as a whole, in a fair and reasonable manner, without minute textual analysis. The court adopted the guidance in Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14, as summarised in The Pace [2010] 1 Lloyd’s Rep. 183 and supported by Kershaw Mechanical Services Ltd v Kendrick Construction [2006] EWHC 727 (TCC).
2. The tribunal had rejected both the alleged express agreement and the alleged implied term, arising from previous dealings, that provisional invoices had to use a price selected by the buyer. Its references to an “implicit agreement” and to variation meant that the parties had not consistently followed an informal practice. They did not establish the unargued finding alleged by the buyer.
3. The section 68 challenge therefore failed. The buyer had had a full opportunity to advance its case on the pricing mechanism. The tribunal had decided the dispute on the case argued before it and had not based its award on a new case.
4. The section 69 application also failed. The suggested finding that the pricing term had been varied had not been made. The tribunal’s observation that it would have been prudent to pay the provisional invoice was not obviously wrong, particularly given the finding that provisional invoicing and later adjustment were standard commercial practice. The court distinguished the reliance placed on The Nanfri [1979] AC 757.
5. Remission under section 70 was refused. The tribunal’s findings that the buyer repudiated the contract and that the contract terminated were clear, and the reasons were sufficient to enable the court to consider the proposed appeal. The section 68 challenge was dismissed, leave to appeal under section 69 was refused, and remission for further reasons was refused.

not stated in the judgment.