Challenging An Arbitration Decision: Serious Irregularity

It would be fair to say that a party wishing to challenge an arbitration award, under the 1996 Arbitration Act, in England and Wales will as a general rule face an uphill struggle. Even where challenges are made, the courts tend to uphold the original award. This makes the recent decision of Mr Justice Akenhead in the case of The Secretary of State for the Home Department and Raytheon Systems Limited1 all the more interesting.

Mr Justice Akenhead had to consider a challenge to an award on the grounds that there had been a serious irregularity under section 68(2) (d) of the 1996 Arbitration Act. As the Judge noted, there was:

"no previous authority which substantially mirrors the facts of the current case and, indeed, there are relatively few reported decisions on Section 68(2) (d)". Section 68(2) of the 1996 Arbitration Act provides that:

"(1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court challenging an award in the proceedings on the grounds of serious irregularity affecting the tribunal, the proceedings or the award ... (2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant ...

(d) failure by the tribunal to deal with all the issues that were put to it;

(3) If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may —

(a) remit the award to the tribunal, in whole or in part, for reconsideration,

(b) set the award aside in whole or in part, or

(c) declare the award to be of no effect, in whole or in part.

The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration."

To succeed under section 68, an applicant must prove that there is:

a "serious irregularity"; and that the serious irregularity caused substantial injustice to the applicant. The dispute itself related to an eBorders contract (or technology system, in order to reform UK border controls by putting in place an electronic system to vet travellers leaving and entering Britain by checking their details against police, security and immigration watchlists). That contract had been terminated by the Home Office in July 2010. The case in question was a substantial international...