New Age Alzarooni 2 Ltd & Anor v Range Energy Natural Resources Inc

A challenge under section 68 of the Arbitration Act 1996 concerns serious procedural irregularity and substantial injustice, not the correctness of an arbitral tribunal’s factual findings, legal conclusions or reasoning. An excess-of-powers challenge requires the tribunal to lack the relevant power under the arbitration agreement, terms of reference or Act; an erroneous exercise of an available power is insufficient. A party that knowingly participates without objecting may lose the right to rely on the irregularity under section 73. A challenge based on ambiguity must also follow exhaustion of the tribunal’s corrective powers under sections 57 and 70(2). Arbitrators exercising broad minority-shareholder relief powers may order declarations, specific performance and steps necessary to enforce contractual rights, including commencing related arbitration proceedings.

The claimants, shareholders in New Age Alzarooni 2 Limited, applied under section 68 of the Arbitration Act 1996 to challenge an ICC arbitration award made in favour of Range Energy Natural Resources Inc. The award required disclosure of information, steps to procure information from another company, compliance with the award and restrictions on the use of majority directions. The claimants alleged excess of powers, uncertainty or ambiguity, and serious procedural irregularity arising from the tribunal’s treatment of evidence and future circumstances. The central issues were whether the objections were valid section 68 grounds, whether they had been waived or barred, and whether the tribunal had jurisdiction to grant the relief.

1. The application was dismissed. The claimants’ complaints were in substance challenges to the tribunal’s findings of fact, conclusions of law, reasoning and exercise of discretion. Those matters fall outside the narrow scope of section 68, which is directed to due process and serious irregularity causing substantial injustice.
2. Under section 68(2)(b), an excess of powers requires absence of the relevant power under the arbitration agreement, terms of reference or the Act. It does not include a wrong conclusion of law or fact, or an erroneous exercise of an available power. The tribunal’s orders were within the relief sought, the agreed issues and the parties’ submissions.
3. The claimants were barred by section 73 from raising objections which they knew, or could with reasonable diligence have discovered, during the arbitration. They had participated fully without objecting that the tribunal lacked power to make the orders or that the proposed relief was uncertain. Section 70(2) also barred the ambiguity complaint because no application had been made under section 57(3) for clarification or removal of ambiguity.
4. The tribunal had broad remedial powers under section 48 and had agreed powers equivalent to those of the Jersey court under Article 143 of the Companies (Jersey) Law 1991. Those powers included declarations, specific performance and wide relief for unfair prejudice to a minority shareholder, including requiring proceedings to be brought in the company’s name. The orders did not bind Gas Plus or the KRG, nor determine their rights.
5. The future-looking orders did not decide the parties’ rights for all time. They operated on the facts found, subject to a relevant and significant change of circumstances. The clause 5.11 declaration preserved its preconditions and did not invalidate every future majority direction.
6. The evidence complaint was an impermissible attack on the tribunal’s evaluation of evidence. The tribunal had considered the material relevant to the issues, and no failure of due process or substantial injustice was established. Costs followed the event.