UMS Holding Ltd & Ors v Great Station Properties SA & Anor

A challenge under section 68 of the Arbitration Act 1996 is confined to serious procedural irregularities within the statutory list that have caused or will cause substantial injustice. It is not an appeal on the merits. A tribunal must decide the essential issues and give reasons, but need not refer to every argument or item of evidence. The court must not re-evaluate the evidence or infer oversight merely from an omission.

An award should be read reasonably and commercially. Illogical reasoning is not a free-standing ground of challenge, though glaring illogicality may show that an essential issue was not addressed. Established irregularities may be assessed cumulatively, but several complaints that are not irregularities cannot be aggregated. The section 68 challenge was dismissed.

An arbitral tribunal awarded the Claimants US$55.8 million for breaches of a joint venture agreement and US$250 million for the exercise of a put option. The Grigorishin Respondents applied under section 68 of the Arbitration Act 1996, alleging 16 serious irregularities grouped under five headings.

The challenges included alleged failures to act fairly, failures to deal with issues, reliance on reasoning not advanced in the arbitration, and failures to consider evidence concerning an alleged illicit profit-diversion scheme and alleged oppression under section 202 of the Cyprus Companies Law. The central issue was whether the tribunal’s concise reasoning and omissions from its award amounted to serious irregularities causing substantial injustice.

1. The application was dismissed. The alleged irregularities did not establish a serious irregularity under section 68 of the Arbitration Act 1996.
2. Section 68 is a longstop remedy within a closed statutory list. It is concerned with due process and substantial injustice, not whether the tribunal reached the correct decision on fact or law. The court followed the approach described in Lesotho Highlands Development Authority v Impregilo SpA and others [2006] 1 AC 221.
3. An arbitral tribunal must determine the essential issues and give the reasons for its award. It need not address every argument or item of evidence. An alleged failure to refer to evidence, or to give it sufficient weight, normally concerns the tribunal’s evaluation of evidence and cannot be converted into a challenge under section 68(2)(a) or (d). The court cannot investigate whether evidence was overlooked without impermissibly reviewing the evidential assessment.
4. There may be a possible section 68(2)(i) case where the tribunal admits that it overlooked evidence, depending on the circumstances and significance of the omission. No such admission was made here. The court also held that a party which had an opportunity to answer a point raised in reply submissions, but declined further oral submissions, had been treated fairly.
5. The award had to be read as a whole, reasonably and commercially. Repeated references to damages for breach of the joint venture agreement showed that the award was contractual. A solitary reference to unjust enrichment did not convert it into an unpleaded restitutionary award.
6. Manifest illogicality is not an independent ground of challenge. It may indicate that an essential issue was not addressed under section 68(2)(d), but an error in reasoning, fact or law remains outside section 68. The court explained the limited significance of Metropolitan Property Realizations Limited v Atmore Investments Limited [2008] EWHC 2925 (Ch).
7. The tribunal addressed the alleged illicit scheme, the damages, and the oppression issue under section 202 of the Cyprus Companies Law. Whether its approach to intention to cause damage was legally correct was a merits question. Multiple complaints which individually disclosed no irregularity could not be aggregated into one.

The judgment records a unanimous arbitral award dated 9 May 2016, which was challenged in the High Court under section 68 of the Arbitration Act 1996. No further appellate stage is stated in the judgment.