T v V & W

A challenge to an arbitral award under section 68 of the Arbitration Act 1996 is confined to serious irregularities within the statutory list. It is not an opportunity to reargue factual or legal findings made by the tribunal. Where the parties have agreed arbitration rules conferring a right to a hearing, that right remains subject to the tribunal’s powers under section 41 concerning non-compliance with a peremptory order. A tribunal may proceed under section 41(7)(c) on the materials properly provided. Substantial injustice requires more than speculation that an oral hearing might have affected the result.

The claimant challenged an arbitral award arising from a partnership dispute. The arbitration was conducted under the agreed provisions of the LCIA Rules 2014. After the claimant failed to comply with a peremptory order requiring security, the arbitrator proceeded under section 41(7)(c) of the Arbitration Act 1996 and determined the dispute on written materials.

The claimant alleged that the absence of an oral hearing constituted a serious irregularity under section 68. He also sought to reopen numerous factual and legal findings in the award. The central issues were whether the arbitrator had remained within the section 41(7)(c) regime, whether there had been an irregularity within section 68(2), and whether any irregularity had caused substantial injustice.

1. The application to remit or set aside the award under section 68 of the Arbitration Act 1996 was dismissed.

2. Section 68 provides a limited power of review. The applicant must establish an irregularity falling within section 68(2) and substantial injustice. A party cannot use the provision to re-fight the factual or legal issues determined in the arbitration. The statutory scheme reflects party autonomy and minimal court intervention.

3. Article 19 of the LCIA Rules 2014 ordinarily gives a party a right to a hearing, although the form and timing of that hearing are matters for the tribunal. The right is subject to section 41, which permits the parties to agree the consequences of non-compliance with a peremptory order and otherwise supplies statutory powers.

4. The arbitrator was entitled to make a peremptory order requiring security and, following non-compliance, to proceed under section 41(7)(c) on the basis of the materials properly provided. The correspondence showed that she continued to operate within that regime. Her reservation of a power to seek clarification, and her statement that a hearing had not been ruled out, did not amount to a return to the ordinary procedural regime.

5. Accordingly, there was no failure to conduct the arbitration in accordance with the agreed procedure, no breach of the general duty under section 33, and no failure to deal with the issues put before the arbitrator. The claim therefore failed at the irregularity stage.

6. In any event, substantial injustice was not established. The suggestion that an oral hearing might have altered the outcome was speculative. The appropriate question was whether it might well have made a difference. The court stressed that this was a conclusion on the particular facts and not a general rule that denial of a hearing cannot cause substantial injustice.

7. The court also endorsed procedural guidance that a section 68 claim form must identify the precise irregularity, the relied-on provision of section 68(2), and the substantial injustice alleged.

First-instance decision. The judgment refers to an earlier decision in the same dispute, [2017] EWHC 565 (Comm), concerning removal of the arbitrator, but the present application was determined independently.