Taking Up The Challenge: Claims For Serious Irregularity Under S.68 Of The Arbitration Act 1996

The Commercial Court continues to handle a significant number of challenges to arbitral awards seated in England and Wales. Few are successful. Statistics released by the Commercial Court earlier this year confirm that, in 2016, of 31 claims made under s.68, none were successful. In 2017, the number of claims rose to over 50, yet only two were successful. The threshold for a successful s.68 claim remains high, yet this has done little to stem the number of challenges. This article focuses on recent case law on s.68 and what might be done to limit the number of (mostly unsuccessful) challenges being brought.

Key provisions

Section 68 permits a party to challenge an award issued by a tribunal seated in England and Wales for "serious irregularity" causing substantial injustice. The most common examples include:

s.68(2)(a) - the tribunal failing to meet its general duties under s.33 of the Arbitration Act 1996 (e.g. the duty to act fairly and impartially as between the parties); and s.68(2)(d) - the tribunal failing to deal with all the issues that were put to it. A successful challenge will result in an award being sent back to the tribunal for reconsideration (where appropriate) or set aside in whole or in part.

Challenges under s.68(2)(d) of the Arbitration Act 1996

A challenge under s.68(2)(d) will be successful if it meets the following criteria:

there was an "issue" within the meaning of s.68(2)(d); the issue was put to the tribunal; the tribunal did not deal with the issue in its award or decision; and this failure of the tribunal has caused or will cause the applicant substantial injustice. Meaning of "issue"

The court discussed the application of s.68(2)(d) in the case of Orascom TMT Investments v. Veon Ltd [2018] EWHC 985 (Comm). First, it defined the meaning of "issue". To qualify as an "issue" under s.68(2)(d), the matter must be of some materiality to the parties' dispute and must have been put to, but not dealt with by, the tribunal.

This expands on earlier case law, which requires the "issue" to be "fundamental" (A v. B [2017] 2 Lloyd's Rep 1) and "essential" (Secretary of State for the Home Department v. Raytheon Systems Ltd [2014] EWHC 4375). This does not mean that every argument raised by the parties constitutes an "issue". It is simply a point on which the whole of a claim or defence depends. Without its determination, the tribunal's decision on the claims or defences would not be justified (Raytheon).

The "issue" must be...