Doglemor Trade Ltd & Ors v Caledor Consulting Ltd & Anor

An admitted computational mistake in an arbitral award may constitute a serious irregularity under section 68(2)(i) of the Arbitration Act 1996, even though it is not an error of fact or law. The statutory requirement of substantial injustice is met where the mistake produces a materially different award on its face and the tribunal might have reached a significantly different outcome. A tribunal’s post-award explanation may evidence the admitted mistake and its consequences, but cannot rewrite or supplement the award’s reasoning. Remission must be confined to matters affected by the irregularity. Findings conclusively determined in the award should not be reopened, but an evaluative input left unresolved because of the mistake may be reconsidered.

The claimants challenged an LCIA arbitration award under section 68 of the Arbitration Act 1996. The tribunal had assessed damages for repudiation of an option deed at US$58 million. It later admitted that it had added, rather than deducted, US$90 million for historic tax liabilities in the agreed valuation model, but declined to correct the award because it considered that the wider valuation exercise was evaluative and iterative.

The issues were whether the admitted mistake was a serious irregularity, whether it caused substantial injustice, and what parts of the award should be remitted.

1. The application succeeded under section 68(2)(i) of the Arbitration Act 1996. The tribunal’s Response was not part of the award and had no status as further reasons, but it was admissible evidence of the admitted mistake and its consequences. It could not contradict, reinterpret or supplement the award.

2. The mistake was an error of implementation. The tribunal failed to do what the award stated it intended to do by adding instead of subtracting the historic tax adjustment. Section 68(2)(i) is not confined to due-process breaches; its plain wording covers an admitted irregularity in the award.

3. The mistake caused substantial injustice. The award was enforceable elsewhere and, on its face, the computational error materially increased the damages. The claimants did not have to establish what the tribunal would probably have decided without the error. It was sufficient that the tribunal might well have reached a significantly different award and outcome.

4. The remission had to respect the prima facie conclusiveness of an arbitral award. The tribunal’s concluded findings on the WACC and historic tax liabilities, and the other determined valuation inputs, could not be reopened merely to produce a more satisfactory overall result.

5. The EBITDA margin was different. Reading the award as a whole, the tribunal had not conclusively decided that its chosen figure was correct. Its decision not to pursue a higher figure depended partly on the mistakenly calculated overall damages and the limitation clause. The award was therefore remitted for the tribunal to correct the computational error, reach a concluded view on the EBITDA margin in light of the evidence, and recalculate the loss using its other unchanged findings. A corrected Final Award was to be produced.

Not an appeal. The judgment concerned a first-instance challenge to an LCIA arbitral award dated 21 January 2020.