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Arbitration Clauses

Arbitration, tribunal shall act fairly and impartially

Arbitration, Interference of the Court
Last updated: 28-Apr-2016

Per Kerr J in Sunbeam Shipping Co. Ltd. v President of India (The Atlantic Sunbeam) [1973] 1 Lloyd’s Rep 482 at p.489:

It is not permissible for the Court to draw any inferences other than inevitable inferences, because the drawing of other inferences is a matter for the arbitrators. If they have not drawn them, then it is not open to the Court to speculate what inferences may have been drawn or should properly have been drawn.

On the other hand, if the Court is left in doubt whether the facts found in a special case support the arbitrators’ conclusion, both parties having contended for different principles of law, and further, if there are indicators suggesting that the arbitrators may have applied the wrong principle, then it would in my view be unsafe to let the award stand. There is no presumption in a special case that the primary award is more likely to be correct than the alternative award. A special case should be a speaking award in the sense that it should enable the Court to answer the question of law on the basis of the facts found, drawing only such inferences as inevitably flow from those facts. If the Court is unable to do so, but is merely in the position of being able to see that the award may be right or that it may be wrong, then it must in my view be set aside or remitted .

Per Lord Diplock in The Nema [1982] AC 724 at p.752:

My Lords, when shown on the face of a reasoned award that the appointed tribunal has applied the right legal test the court should in my view only interfere if on the facts found as applied to that right legal test, that no reasonable person could have reached that conclusion. It ought not to interfere merely because the court thinks that upon those facts and applying that test, it would not or might not itself have reached the same conclusion, for to do that would be for the court to usurp what is the sole function of the tribunal of fact.

Per Beatson J in TTMI SARL v Statoil ASA [2011] EWHC 1150 (Comm) at para 16:

In Dallah Real Estate v Government of Pakistan [2010] UKSC 46, albeit in the context of a challenge under section 103(2)(b) of the 1996 Act at the time of attempted enforcement, Lord Collins of Mapesbury stated at [96] that "The consistent practice of the courts in England has been that they will examine or re-examine for themselves the jurisdiction of arbitrators" and the question "can arise in a number of contexts, including a challenge to the tribunal’s jurisdiction under section 67 of the 1996 Act." Lord Saville of Newdigate stated at [160] that whether an arbitrator has jurisdiction is a matter that the court must consider for itself. This reflects and confirms the decisions of the Commercial Court since the decision of Rix J as he then was in Azov Shipping Co. v Baltic Shipping Co. [1999] 1 Lloyd’s Rep. 68. Accordingly, the function of the Court is to re-hear the case rather than to review the arbitrator’s decision.

Per Mrs Justice Gloster in Greatship (India) Ltd v Oceanografia SA de CV [2012] EWHC 3468 (Comm) at para 14:

I am prepared to accept that the views of experienced arbitrators, such as the members of the tribunal in the present case, should be given appropriate weight, particularly in circumstances where they have experience of practice or procedures, or issues of the construction of contracts, in the relevant trade or industry. Nevertheless, the court necessarily has to arrive at its own conclusion on the arguments presented to it, and, in the event that it reaches the clear conclusion that a tribunal has made a wrong determination, the court is not constrained by the standing of the arbitral tribunal from departing from the latter’s view.

In ST Shipping and Transport Pte Ltd v Space Shipping Ltd (The CV STEALTH) [2016] EWHC 880 (Comm) per Popplewell J. at para 38:

The Arbitrator's findings of fact are clear. In truth, this is another example of a disappointed party trying to dress up an appeal against findings of fact as one which turns on questions of law. It hardly needs repeating that it is the policy of the 1996 Act to prevent such illegitimate attempts to go behind a tribunal’s findings of fact; in the absence of an irregularity justifying relief under section 68 of the Act, the parties are bound by the findings of fact of their chosen tribunal and cannot challenge them in court, even on the grounds that they were unsupported by the evidence or that they contain internal inconsistencies: see Geogas SA v Trammo Gas Ltd (The "BALEARES") [1993] 1 Lloyd’s Reports 215 per Steyn LJ at pp. 227-228, 232; and Demco v SE Banken Forsakring Holding Aktiebolag [2005] 2 Lloyd’s Reports 650 at paragraphs 38 to 48.

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