W v X Company

Under section 42 of the Arbitration Act 1996, the court supports the arbitral process but retains an independent discretion whether to enforce a tribunal’s peremptory order. The court must be satisfied that the statutory conditions are met, including exhaustion of available arbitral procedures and failure to comply within the prescribed or reasonable time.

Permission from the tribunal is supportive but does not establish non-compliance. The court must assess the evidence, while avoiding a general review of the tribunal’s case-management decision. Inadequate searches, explanations and responses may establish breach. Orders may remain necessary even where third-party disclosure is also sought, because the focus is the party’s direct disclosure obligation and the proper functioning of the arbitration.

W applied under sections 42, 43 and 44 of the Arbitration Act 1996 in support of two London arbitrations concerning the identity of the buyers of two vessels. The applications under sections 43 and 44 were unopposed and orders were made for production from shipbrokers.

The contested section 42 application sought enforcement of several final and peremptory disclosure orders against Y, which W treated as the buyers for the purposes of the applications. Y contended that it had complied with the orders and that the court could not be satisfied of non-compliance. The central issue was whether the condition in section 42(4) was established and, if so, whether the court should exercise its discretion to make enforcement orders.

1. The requirements for an application under section 42(2) and (3) were satisfied. The decisive question was whether W had established non-compliance within section 42(4).
2. The section 42 discretion is directed to supporting the arbitral process. Following the approach identified in Emmott v Michael Wilson & Partners Ltd (No 2) [2009] EWHC 1 (Comm), the court should not act as a rubber stamp, but need not reconsider in every case whether the tribunal’s peremptory orders ought to have been made. It may refuse relief where enforcement is not required in the interests of justice, including after a material change of circumstances or where the tribunal acted unfairly or impartially.
3. Permission from the tribunals was supportive but was not conclusive. It had been granted in the context of applications under sections 42, 43 and 44 together, without particular scrutiny of the merits of the section 42 application. The court therefore had to examine the evidence itself.
4. W established breaches in relation to correspondence with Mr A, documents concerning Vessel E, and information concerning five vessel transactions. The statements provided were materially inadequate, searches were insufficiently explained, and required answers had not been provided. Those findings did not necessarily amount to findings of dishonesty.
5. Breach was not established in relation to the contractual documents for the purchase and on-sale of five vessels. Bare denials, without a peremptory order requiring precise search details, did not satisfy the court to the necessary standard given the potentially serious consequences of enforcement.
6. The court exercised its discretion to make section 42 orders in principle for categories 1, 2 and 4. The possible availability of documents from third parties under sections 43 and 44 did not make orders against Y unnecessary, since the issue concerned Y’s direct disclosure obligations and the just disposal of the central issue in the arbitrations.

Not stated in the judgment.