X v Y

A challenge to an arbitration award under section 68 of the Arbitration Act 1996 is confined to serious procedural irregularity causing substantial injustice. It is not a vehicle for reopening factual evaluation, challenging legal conclusions, or criticising the tribunal’s reasoning in detail. An applicant must first exhaust available recourse under section 57. A tribunal need not address every piece of evidence or every step in its reasoning, provided it deals with the essential issues. An unclear or shifting case may also explain why an issue was not addressed in greater detail. The court dismissed the challenge both because the section 57 requirement had not been satisfied and, alternatively, because none of the alleged irregularities had merit.

The claimant challenged an LCIA arbitration award under section 68 of the Arbitration Act 1996. The award required it to pay the defendant US$21,104,201.51, plus interest and costs, under a marine services contract.

The claimant alleged failures to consider evidence, failures to deal with issues, and a decision based on an unargued point. The defendant objected that the claimant had not first used the correction or clarification procedure under section 57 and disputed the allegations on their merits. The claimant did not attend the hearing.

1. Preliminary objection. Section 70(2) of the Arbitration Act 1996 prevents a section 68 application where available recourse under section 57 has not first been exhausted. Section 57(3)(a) permits clarification or removal of ambiguity. Article 27.1 of the LCIA Rules 1998, although it does not expressly mention ambiguity, includes that power within errors of a similar nature and does not exclude the statutory power. The claimant should therefore have sought clarification from the tribunal. Its failure to do so was fatal to the application.
2. Nature of section 68. The categories in section 68(2) are exhaustive. The award must be read reasonably and commercially, rather than by nit-picking. Section 68 is a long-stop remedy for extreme procedural failures causing substantial injustice. It does not permit an appeal on law or a rehearing of factual findings, particularly where the parties agreed under Article 26.9 of the LCIA Rules 1998 that there would be no appeal on a question of law.
3. A tribunal need decide the essential issues, but need not set out every step in its reasoning or refer to every item of evidence. An allegation that evidence was overlooked generally attacks the tribunal’s evaluation of evidence and is not a section 68 irregularity. The court should not conduct its own evidential review.
4. The tribunal had addressed the claimant’s case that the services contract was a sham or was not binding. The first and second arguments were impermissible attempts to reopen evidential evaluation. The third was an attack on the tribunal’s legal conclusions, not a failure to deal with an issue. The claimant’s unclear and shifting presentation also undermined the alleged procedural complaint.
5. The fourth argument failed because the tribunal had not decided the case on the later termination notices. Those observations were not part of the tribunal’s ratio. In any event, no alleged irregularity caused or would cause substantial injustice. The section 68 application was dismissed with costs.

Not an appeal. The judgment records no prior appellate decision.