The court has power, under s.68 of the 1996 Arbitration Act, to set aside or remit an arbitrator’s award if there is “serious irregularity” which the court considers has caused, or will cause, “substantial injustice”. But what does “serious irregularity” mean? The Act lists the possibilities, one of which is an award obtained by fraud or in a way contrary to public policy.
A party to an arbitration deliberately withheld from the arbitrator material that was completely inconsistent with key issues in its case. In the court’s view it was highly likely that the correspondence in question would have been material to the outcome of the arbitration, since it was contrary to the party’s case. And where the key issue was one that would potentially be affected by the material not put before the arbitrator it followed that the other party suffered a substantial injustice – namely the wrong result. In any event, the arbitrator made a costs order against that party, which must have been affected by the outcome of the application.
The court therefore remitted to the arbitrator the parts of the award that were challenged so that he could consider his award in possession of the full facts.