P (A Company Incorporated In County A) v D (A Company Incorporated In Country B) & Ors

An arbitration challenge under section 68 of the Arbitration Act 1996 may succeed where a tribunal decides a core credibility issue without giving the relevant witness a fair opportunity to answer the case against him. The rule in Browne v Dunn is important but flexible. Failure to cross-examine does not automatically amount to acceptance of evidence. However, where the unput case concerns the central issue and the tribunal relies on it, procedural fairness may be breached. A tribunal must also give parties a reasonable opportunity to address any material case on which its decision may depend. Substantial injustice is established where the irregularity might well have produced a different, reasonably arguable outcome.

The claimant applied under section 68 of the Arbitration Act 1996 to challenge a partial final award and a subsequent ruling. The arbitration concerned whether loans were repayable before 1 January 2018 or whether their repayment had been extended to 1 January 2020 by agreement, estoppel, representation or common assumption.

The tribunal rejected the alleged extension to 2020. The claimant argued that the tribunal had acted unfairly because the defendants did not cross-examine the claimant’s principal witness about the August 2015 meeting, and because the tribunal relied on a contingent or conditional analysis which had not been put to the witness or argued at the hearing.

1. Application allowed. The tribunal had breached its duty under section 33 of the Arbitration Act 1996, giving rise to serious irregularity under section 68(2)(a).
2. The principle in Browne v Dunn requires a party generally to put a material challenge to a witness whose evidence it seeks to disbelieve. The principle is not inflexible, and failure to cross-examine does not automatically establish acceptance of the evidence. Its application depends on procedural fairness and the circumstances of the case.
3. Here, the claimant’s witness had given written evidence addressing the core issue: what was said at the August 2015 meeting and whether an extension to 2020 had been agreed or represented. The defendants did not put their contrary case to him. Nor was the tribunal’s alternative analysis—that any extension was contingent on a wider restructuring package—put to him or developed in argument.
4. The authorities concerning cases decided on matters not argued or put to the parties, including The Vimeira, The Pamphilos, Zermatt Holdings SA v Nu-Life Upholstery Repairs Ltd and Vee Networks Limited v Econet Wireless International Ltd, established that a tribunal must give parties a fair opportunity to address all material factual and legal issues on which it intends to rely.
5. Section 68 also required substantial injustice. The court could not conclude that proper cross-examination and argument would necessarily have produced the same result. A different outcome was reasonably arguable, particularly given the weaknesses in the opposing evidence and the tribunal’s apparent adoption of a case not properly advanced.

First-instance application under section 68 of the Arbitration Act 1996. The application to challenge the partial final award and ruling was allowed.