Judge considers the requirements of section 68(2)(g) of the Arbitration Act 1996 (challenging an award on the basis that it was obtained by fraud)
The claimant sought to challenge an arbitration award on the basis that it had been obtained by fraud (pursuant to section 68(2)(g) of the Arbitration Act 1996). Much of the case turns on its particular facts but two issues considered by the judge are of more general interest:
(1) What evidence is needed to satisfy the requirements of section 68(2)(g)? Jefford J held that, although it is not enough for the court to surmise that there had been fraud, the court can reach a conclusion on all of the evidence available to it. Accordingly, an inference of fraud can be made if the evidence is strong enough. Although there is a higher standard of proof on an allegation of fraud, that does not mean that the standard is different from the balance of probabilities, "but rather that the explanation is more likely to be human error than dishonesty".
(2) Can recklessness amount to fraud within the meaning of section 68(2)(g)? Prior caselaw has established that to satisfy the high threshold of this section, there must be some form of "dishonest, reprehensible or unconscionable conduct" that has contributed in a substantial way to obtaining the award. However, the authorities are unclear whether "reprehensible or unconscionable conduct" is just another way of describing dishonest conduct. The judge noted that if they are synonymous, that tends to suggest that "dishonesty" in this context involves something more than recklessness. She went on to say that: "These comments – and they are no more than that – are more consistent with what I have called the synonymous reading of the different types of conduct. It seems to me, without deciding the point, because it is unnecessary for me to do so, that there may be cases in which recklessness as to whether a statement was true or false might amount to fraud within the meaning of s.68(2)(g) if there is some other element of unconscionable conduct".