Symbion Power LLC v Venco Imtiaz Construction Company

Under section 68(2)(d) of the Arbitration Act 1996, a serious irregularity requires a tribunal to have failed to deal with an essential issue that was put to it. An argument, evidential point, line of reasoning or complaint about inadequate reasons is not itself an issue. A tribunal may deal with an issue by deciding an anterior point or by weighing the evidence without addressing every submission expressly. The applicant must also show substantial injustice. This requires a reasonably arguable case and that a favourable decision on the omitted issue might well have produced a different award. The court must read the award fairly, commercially and in context.

The claimant applied under section 68(2)(d) of the Arbitration Act 1996 to set aside or vary an arbitral award arising from a construction subcontract. The defendant had substantially succeeded in an arbitration concerning payment for works performed before termination.

The claimant alleged that the tribunal had failed to deal with four matters: a collateral estoppel defence based on an earlier arbitration, an alleged conclusive-evidence case concerning invoices and purchase orders, failure to discharge the burden of proof, and alleged overstatement of the claim. The application also raised whether any relief should be remission or set-aside, and whether the judgment should be anonymised.

1. Application dismissed. The claimant’s complaints concerned arguments and evidential matters, or matters which the tribunal had addressed, rather than essential issues within section 68(2)(d).
2. The court adopted the summary in Secretary of State for the Home Department v Raytheon Systems Ltd [2014] EWHC 4375 (TCC). The distinction between an issue and an argument must be maintained by a high threshold. The question is whether, on a fair, commercial and common-sense reading of the award in its factual context, the tribunal dealt with all issues essential to its decision.
3. The tribunal had not treated invoices or purchase orders as conclusive evidence. It had considered the whole body of evidence concerning the value of the works. Complaints that it failed to address every aspect of the claimant’s reasoning, or gave insufficiently detailed reasons, did not engage section 68(2)(d).
4. The collateral estoppel argument had fallen away or, alternatively, had been impliedly rejected when the tribunal treated the earlier award as guidance rather than as binding. The earlier arbitration concerned different contractual provisions and did not determine the value of the defendant’s works. The point was not reasonably arguable and, in any event, caused no substantial injustice.
5. The alleged overstatement defence was another aspect of the submission that the defendant had failed to prove its claim. It was not a free-standing issue which the tribunal had failed to determine.
6. The judge stated that a party-appointed arbitrator must act fairly and impartially and must not communicate privately with the appointing party about the arbitration after the tribunal has been constituted. Confidentiality does not cure the concern and may reinforce the appearance of impropriety. Nevertheless, remission would have been preferred to set-aside had the application succeeded.
7. On publication, the public interest in reasoned judgments concerning arbitration had to be balanced against legitimate arbitral confidentiality. Applying the principles in Economic Department of City of Moscow v Bankers Trust Co. [2004] EWCA Civ 314, there was no sufficient reason to anonymise the judgment.