English Court Provides New Guidance On Summary Dismissal Process For Groundless Serious Irregularity Challenges

The English High Court has in the last few days proposed a procedurally strict approach to serious irregularity challenges under s68 of the Arbitration Act 1996 where these have already been dismissed on paper. The decision in Midnight Marine Ltd v Thomas Miller Speciality Underwriting Agency Ltd [2018] EWHC 3431 (Comm) suggests that the court should take a more active role in preventing such hearings from escalating into a full s68 challenge hearing (case available here).

The High Court's earlier decision in the case of Asset Management Corporation of Nigeria v Qatar National Bank [2018] EWHC 2218 (Comm) covered in our previous blog post, demonstrated the difficulty in disposing of bad s68 challenges quickly. This judgment emphasised that an oral hearing will usually be granted after a challenge is thrown out on paper, unless the case is "something akin to vexatious". In this case, the summary dismissal of the s68 challenge was nevertheless followed by two further applications, and an oral hearing, before the challenge was finally thrown out.

Both of these recent cases promote the summary dismissal process in paragraph O8.5 of the Commercial Court Guide as a useful tool for weeding out unmeritorious s68 challenges, but the decisions differ on how to treat applications to set aside orders dismissing such challenges. The decision in Midnight Marine v Thomas Miller takes a tougher line than the earlier Asset Management Corporation of Nigeria v Qatar National Bank decision, suggesting that the oral hearing referred to in the summary dismissal process should be a very short hearing, directed only at the question of whether the application has a real prospect of success.

Background

The underlying dispute in Midnight Marine v Thomas Miller concerned an insurance claim relating to cargo loss. In 2008, the underwriters commenced arbitration under the insurance policy, seeking a declaration of no liability. The assured did not appoint an arbitrator and took no steps in the arbitration until July 2017, some nine years later, at which point the assured appointed an arbitrator and attempted to continue the proceedings. The tribunal ultimately issued an award holding that any claim by the assured was time-barred, and that it should in any event be dismissed under s41(3) of the Arbitration Act 1996 for inordinate and inexcusable delay. The assured then challenged these decisions under both s68 and 69 of the Arbitration Act 1996.

The applications to the...