A party that is not satisfied with an award made by an arbitration tribunal may, in certain circumstances, seek to challenge it before the courts. The Arbitration Act 1996 ("the Act"), which applies to arbitrations which have their seat in England and Wales or Northern Ireland, provides several such avenues for review by the courts.
In summary:
- Section 67 of the Act allows for the challenge of arbitral awards on the grounds that a tribunal did not have substantive jurisdiction over the dispute.
- Section 68 of the Act allows for the challenge of an arbitral award on the grounds of a serious irregularity affecting the tribunal, the proceedings or the award.
- Section 69 of the Act allows for an appeal of an arbitral award on a point of law.
The decision of WSB v FOL [2022] EWHC 586 (Comm) provides useful guidance on when and how an application may be made under sections 67-69 of the Act. In that case, WSB had challenged an award under sections 67 and 68 and sought permission to appeal under s 69 of the Act. Both the challenges and the application for permission to appeal were dismissed by the High Court on the papers.
WSB subsequently applied to have the order dismissing its application set aside, in effect renewing its challenges to the arbitral award. In dismissing that application, Calver J emphasised the narrow scope, and strict procedural requirements, for such applications.
Importantly, the decision affirmed guidance from Midnight Marine v Thomas Miller [2018] EWHC 3431 to the effect that any hearing of such applications should be very short (typically no more than 30 minutes), with limited written submissions; the respondent should not usually attend the hearing, and will not ordinarily be entitled to recover its costs if it does attend. Any hearing should be of limited scope rather than a full rehearing, and due weight must be given to the decision of the judge who originally dealt with the matter – the applicant should be able to identify a "good reason" for disagreeing with the decision.
Similarly, Calver J confirmed that applications for permission to appeal arbitral awards will ordinarily be determined on the papers, consistent with s 69(5) of the Act. Any decision on the papers to refuse permission to appeal should be treated as final and applicants will not be entitled to a rehearing. If a party believes that permission to appeal has been wrongfully refused, it may appeal to the Court of Appeal. However, this can only be done with leave of the lower court, which must be satisfied that the question on appeal is of general importance or there is another special reason for it to be considered by the Court of Appeal. In short, once permission to appeal is refused on the papers any further recourse must pass a high threshold.
The decision emphasises the limited nature of challenges to arbitral awards under sections 67-69 of the Act; it also serves as a reminder that such challenges should wherever possible be resolved without protracted litigation or unnecessary delay and expense.
