The Commercial Court (Andrew Baker J) has held that an arbitrator who decided the case on the basis of a matter not argued by either party had committed a serious irregularity under s.68 of the Arbitration Act 1996. The Tribunal, consisting of a sole arbitrator, had fallen into error when it decided to declare the Claimants the beneficial owner of shares in a Bank. That relief had not been sought by the Respondent, nor had it been fairly indicated to the parties that the Tribunal was planning to decide the case on that basis, so as to give the parties an opportunity to address the issue. This is a rare example of an application under s.68 succeeding, resulting in the setting aside of the relevant parts of the Award.
The Court set aside the offending parts of the Award, to be considered afresh by the arbitrator in light of the Court’s judgment. The Court refused to remove the arbitrator since the Tribunal could be trusted to determine the matter afresh (and without being hindered by its previous erroneous reasoning). The Court noted obiter (and in a departure from SSHD v Raytheon [2015] EWHC 311 (TCC)) that any application to remove the arbitrator would have to be made separately under s.24 of the Act.
In a separate decision, the Court unusually gave a fully reasoned judgment on costs, which is of interest as to the Court’s approach to costs on this sort of application. The Judge found that the Respondent was to pay 80% of the Claimants’ costs ([2018] EWHC 2958 (Comm)).
David Joseph QC and Iain Quirk acted for the Claimants, instructed by Edward Poulton and Richard Molesworth of Baker McKenzie.
(1) RJ (2) L LTD v HB [2018] EWHC 2833 (Comm)
