Zalina Kanametova v OSG Records Management (Europe) Limited

A challenge under section 67 of the Arbitration Act 1996 is a complete rehearing. The court must decide whether the tribunal was correct, rather than whether its decision was one it was entitled to reach. The award has no automatic legal or evidential weight, although the court should examine it with care and interest and may be persuaded by reasoning it finds persuasive.

The party asserting that an agreement is valid bears the burden of proving that essential allegation on the balance of probabilities. Where dishonesty is alleged, the court must consider inherent probabilities when assessing whether the burden has been discharged. A company seal, without more, does not establish when an agreement was executed.

The claimant challenged under section 67 of the Arbitration Act 1996 an arbitral award concerning a long-term incentive agreement. The tribunal had found that the agreement was signed in 2020 and backdated, when the signatory no longer had authority to bind the respondent, and concluded that the arbitration agreement was invalid.

The High Court conducted a rehearing. The central issues were whether the agreement had been executed in October 2015, when the signatory was the respondent’s chief executive, and whether the claimant had proved its validity. The claimant also relied on the respondent’s company seal as evidence of execution.

1. Challenge under section 67. The court treated the challenge as a complete rehearing. The arbitrator’s award had no automatic legal or evidential weight, although it was examined with care and interest. The question was whether the arbitrator was correct, not merely whether she was entitled to reach her conclusion: Republic of Korea v Dayyani [2019] EWHC 3580 (Comm), [26]; Electrosteel Castings Limited v Scan-Trans Shipping & Chartering SDN BHD [2002] EWHC 1993 (Comm), [22].
2. Burden and standard of proof. The claimant bore the burden of proving that the LTI Agreement was valid and had been executed in October 2015 with authority to bind the respondent. The standard was the balance of probabilities. In assessing the allegation of dishonesty, the court took account of inherent probabilities. The court followed the reasoning in Ganz v Petronz FZE [2024] EWHC 635 (Comm), [55]-[57], that an allegation forming an essential part of a party’s case must be proved by that party.
3. Evidence of execution. The contemporaneous documents, the parties’ conduct, the absence of a retained executed copy, and the credibility and funding evidence did not support execution in October 2015. The presence of the respondent’s company seal did not determine the date of execution or displace the claimant’s burden. The claimant’s account and Mr Bobrowski’s supporting evidence were rejected.
4. Disposition. The claimant failed to prove execution in October 2015. The purported LTI Agreement and its arbitration agreement were therefore not valid or binding on the respondent. The arbitrator had no jurisdiction and was correct to so hold. The section 67 challenge was dismissed.

This was a first-instance challenge under section 67 of the Arbitration Act 1996. The court conducted a complete rehearing of the jurisdictional issue and dismissed the challenge.