Obtaining The Award By Fraud - The Decision In Elektrim SA v. Vivendi Universal

It is the classic issue. Shortly after receiving an

unfavourable award you take possession of a document not

disclosed in the arbitration, and which could have changed the

tribunal's findings in your favour. That was the position

in this case reported at [2007] EWHC 11.

Background

E alleged that V (not its lawyers) deliberately concealed a

vital document produced during a period of negotiations central

to the dispute. The document (the "G Memorandum") was

addressed to the CEO and other senior executives of V. E

claimed that if this document had emerged during the

arbitration process the award which found in favour of V, would

have found in E's favour and the contract out of which the

arbitration arose would be declared void.

E made a application under s.68(2)(g) of the 1996 Act to set

aside the LCIA tribunal award on the grounds that the award was

obtained by fraud or procured contrary to public policy. The

court rejected the application.

The issues were:-

Did the (in)actions of V (in not disclosing the G

Memorandum) amount to "obtained by fraud" or

"procured contrary to public policy"?

The G Memorandum ought to have been disclosed. However,

there must be a fraud of a party to the arbitration or by

someone else to which that party was privy and not to anyone

simply connected with the arbitration process. If a party

either through its directors, employees or lawyers knowing

there exist documents to be disclosed and deliberately conceals

them so inducing the tribunal or the other side to believe they

did not exist, it is a "fraud" for the purposes of

s.68(2)(g). Fraud must be demonstrated to a high standard of

proof. Negligence or error of judgment is insufficient.

The court found that no one at V or its lawyers deliberately

concealed the G Memorandum and the application under s.68(2)(g)

failed.

Did the (assumed) deliberate concealment of the G

Memorandum result in the award being obtained by

fraud?

No. Even assuming (1) the...