Whether an arbitration award should be remitted or set aside

http://www.bailii.org/ew/cases/EWHC/TCC/2015/311.html

A section 68 Arbitration Act 1996 challenge to an award on the ground of serious irregularity had succeeded in this case. Section 68(3) provides that in such cases, the court may remit the award or, if it is inappropriate to do so, set the award aside (or declare it to be of no effect – in practice, this remedy is of little or no difference to setting aside though). Accordingly, remission is the “default” option and is the one most often adopted by the courts. However, in this case, Akenhead J ordered that the award should be set aside instead. His reasoning was as follows:

  1. When deciding what to do, the court should consider all the circumstances and background facts relating to the dispute, the award, the arbitrators and the overall desirability, and ramifications of either remission or setting aside. There is no “weighting” for or against any of the particular grounds for challenge set out in section 68 and, in particular, “there is no authority which suggests that it will invariably be inappropriate to set aside the award where the serious irregularity ground is the section 68(2)(d) one” (ie failure by the tribunal to deal with all the issues that were put to it) - which was the relevant ground in this case
  2. Textbook commentary has suggested that setting aside may be appropriate where, for example, the arbitrators cannot reasonably be expected to approach the matter afresh or one or both of the parties has justifiably lost confidence in the arbitrators. Akenhead J added that, whilst there is no prior authority on the point: “I do consider that the more serious the irregularity the more likely it is that setting aside may be the appropriate remedy. There are shades of serious irregularity”
  3. The relevant factors for setting aside in this case were as follows:
    1. The case was “towards the more serious end of the spectrum of seriousness in terms of irregularity”
    2. If the tribunal, “albeit conscientiously and competently” was to reach the same conclusion as before, that might lead to a strong objective belief that justice had either not been done or had not been seen to have been done
    3. The extra cost of re-opening an arbitration before a new tribunal would not be significantly greater than remission to the current tribunal; and
    4. The current tribunal would be unlikely to have any significant recall of the evidence by the time any reconsideration takes place (the judge noted that: “Given the logistics involved with busy international arbitrators, there is, at least, a very real risk that it could not re-convene substantive hearings or otherwise move to a stage at which they could produce an award … for as much as a further 12 months if not more. If that is right, it will be closer to 3 years since the evidence was given”)