Successful section 68 Arbitration Act 1996 challenge

Clyde & Co (Martin Hall and David Handley) for applicant

This is an example of a successful challenge to an arbitral award under section 68 of the Arbitration Act 1996. The claimant, wishing to avoid potential limitation problems, commenced arbitral proceedings before any third party claims had been brought against it. It therefore wanted the tribunal to “reserve” jurisdiction to hear any future claims which it might want to bring against the defendant. The defendant instead wanted the tribunal to reach a final decision on the merits of the case. Rather than adopting either of those approaches, the tribunal adopted a “half-way house” of refusing to exercise jurisdiction over other claims on the basis that such claims would be brought before a newlyconstituted tribunal.

Eder J allowed the challenge to that award, holding that, although the decision might have had some attraction, the parties should have been given an opportunity to put their views on this (it didn’t matter whether the tribunal would have adopted a different course, it was sufficient that it “might realistically” have reached a different conclusion). The judge also commented (although he did not have to decide the point) that “a tribunal has no power simply to decline to act”. (One further point too: the judge held that the term “interim award” is a misnomer which should be abandoned, and replaced it here with “partial award” instead).