Arbitration Tips: Challenging an arbitral award in the English court

Arbitration Tips

Challenging an arbitral award in the English court

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Arbitration Tips Challenging an arbitral award in the English court Finality is one of the key selling points of arbitration. Consequently, challenging an award before the English court is far from easy. There are obstacles in the path of any challenge or appeal and the available grounds are limited and closely scrutinised.

John Abbott

Russell Beard

Partner john.abbott@laytons.com +44 (0)20 7842 8000

Partner russell.beard@laytons.com +44 (0)20 7842 8000

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Arbitration Tips | Challenging an arbitral award in the English court

When can an aggrieved party challenge or appeal an award?

On what grounds can an aggrieved party challenge an award?

Exhaustion of available processes before the tribunal

The scope for challenging an award before the English court is limited. An aggrieved party can:

Before making any application to challenge or appeal an

• challenge the substantive jurisdiction of the tribunal1;

award to the English court, the aggrieved party must first

• challenge the award on grounds of serious irregularity2;

have exhausted any available arbitral process for appeal,

and/or

review or correction of the award. In practice, arbitral rules

• appeal to the English court on a point of law3.

do not often include an appeal process (although the rules of some commodities associations – e.g. GAFTA – do); many do,

We look at each briefly below.

though, provide a process for correcting clerical errors and ambiguities in an award.

Time limits

Challenge to the substantive jurisdiction of the tribunal A party can challenge both:

Applications and appeals to the English court must be brought within 28 days of (a) the award or (b) the date when

• any award by the tribunal as to its own jurisdiction;

the party making that application or appeal is notified of the

• any award made by the tribunal on the merits of the

outcome of a process for the review, appeal or correction of

case.

an award, as above.

Challenges to the substantive jurisdiction of the tribunal tend It is important for parties to take into account that the tribunal

to focus on the existence, validity or scope of any arbitration

will decide the date of the award which might not coincide

agreement and the constitution of the tribunal.

with the date that party receives notice of the award (so the clock for a challenge or appeal might start ticking earlier than

Parties cannot contract out of this provision.

parties may think).

Challenge on grounds of serious irregularity The irregularity in question may affect the tribunal, the proceedings or the award and it must cause substantial injustice to the applicant.

1.

Section 67, Arbitration Act 1996 Section 66, Arbitration Act 1996 3.

Section 69, Arbitration Act 1996 2.

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Arbitration Tips | Challenging an arbitral award in the English court

Legislation sets out an exhaustive list of the types of irregularity which include: • tribunal failing to comply with its general duties (e.g. to act impartially)

What can a challenge or appeal achieve?

The relief available to a party who makes a successful challenge will depend on the nature of the challenge or

• tribunal exceeding its powers

appeal made. The English court has a heavy measure of

• procedural failings by the tribunal

discretion. Relief may include, for example, the following:

• tribunal failing to deal with all the issues put to it • award obtained by fraud

• confirming the award • varying the award in whole or in part

Parties cannot contract out of this provision.

• setting aside the award in whole or in part • remitting the matter to the tribunal in whole or in part

Appeal on a point of law

• declaring the award to be of no effect in whole or in part • making no order

In many cases, this option will not be open. Parties can contract out of the right to appeal on a point of law, either in the arbitration agreement or under the institutional rules which it is agreed will govern the arbitration (e.g. both ICC and LCIA rules waive this right of appeal in favour of finality).

Is it possible to appeal against the decision of the English court?

In principle, yes; in practice, a party which is unhappy with the

Even where the parties have not contracted out, permission

decision of the English court will need the court’s permission

from the court is required to launch an appeal on a point

for a further appeal. To obtain permission, the applicant will

of law (the parties may also agree that an appeal may be

need to demonstrate that the appeal has a real prospect of

brought but, in practice, agreement will be rare). The grant

success. Where the applicant seeks to appeal a decision in

of permission is tightly regulated and statistics (see below)

relation to an appeal on a point of law, the court will not give

demonstrate that few applications make the grade.

permission unless it considers that the question is one of general importance or there is some other special reason why

It is important to note that appeals on points of law do not

it should be considered by the English Court of Appeal.

extend to factual findings or procedural errors of the tribunal (serious procedural errors may form a separate basis for challenge under the provision referenced above). The English court will not consider points of law which were not in issue before the tribunal.

Challenges to recognition and enforcement The New York Convention sets out grounds on which parties can seek to challenge the recognition and enforcement of awards. They are addressed in our separate article: Arbitration Tips: Challenging recognition and enforcement of an arbitral award.

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Arbitration Tips | Challenging an arbitral award in the English court

Challenges and appeals in practice before the English court Statistics published by the English Commercial Court demonstrate that the English court is very slow to interfere with an arbitral award. The Commercial Court Users’ Group Meeting Report dated 13 March 2018 reported the following:

Appeal on point of law Year

Applications for leave Leave to appeal to appeal granted

Appeal successful

2015

60

20

4

2016

46

0

0

2017

56

10

1

Challenge on grounds of serious irregularity Year

Applications challenging award

Challenge successful

2015

34

1

2016

41

0

2017

37

0

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Arbitration Tips | Challenging an arbitral award in the English court

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Arbitration Tips | Appointing the Tribunal

Arbitration Our team is experienced in resolving disputes through arbitration and committed to providing outcomes-focused, innovative and commercially minded advice to guide our clients through all stages of the arbitration process.

We represent clients from across the globe in arbitrations involving a range of sectors including construction, international trade and commodities, investment treaties and shipping.

Our experience spans arbitrations convened through the main international institutions such as the ICC, LCIA, LMAA, DIFC and SIAC as well as on an ad-hoc basis.

Our Team John Abbott

Russell Beard

Partner john.abbott@laytons.com +44 (0)20 7842 8000

Partner russell.beard@laytons.com +44 (0)20 7842 8000

Robert Clark

Simon Foster

Partner robert.clark@laytons.com +44 (0)20 7842 8000

Partner simon.foster@laytons.com +44 (0)1483 407 000

Richard Harrison

Paddy Kelly

Partner richard.harrison@laytons.com +44 (0)20 7842 8000

Partner paddy.kelly@laytons.com +44 (0)20 7842 8000

Rebekah Parker

Will Slater

Partner rebekah.parker@laytons.com +44 (0)20 7842 8000

Consultant will.slater@laytons.com +44 (0)20 7842 8000

Geraint Thomas

Ben Thorogood

Partner geraint.thomas@laytons.com +44 (0)20 7842 8000

Solicitor ben.thorogood@laytons.com +44 (0)20 7842 8000

Daniel Walter Solicitor daniel.walter@laytons.com +44 (0)20 7842 8000

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This information is offered on the basis that it is a general guide only and not a substitute for legal advice.

We cannot accept any responsibility for any liabilities of any kind incurred in reliance on this information.

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