Arbitration Law Monthly

Section 68 of the Arbitration Act 1996 sets out the grounds upon which an award may be set aside for serious irregularity, in each case provided that there would be substantial injustice in allowing the award to stand. Many challenges to awards brought before the courts are notionally concerned with serious procedural irregularity, but at root the appellant is really objecting to factual findings and inferences to be drawn from them.

It is a settled principle of English law that the English courts will not enforce a contract which requires the performance of an illegal act in a friendly foreign country. Beijing Jianlong Heavy Industry Group v Golden Ocean Group Ltd and Others [2013] EWHC 1063 (Comm) decides that there is no reason why the legality or otherwise of an act under a foreign law should not be determined by arbitration in England.

There are various mechanisms in the Arbitration Act 1996 which can be used by a person to challenge arbitration proceedings, and subsequently an award, where that person contends that he was not a party to the arbitration clause and the arbitrators had no jurisdiction over him. London Steam Ship Owners Mutual Insurance Association Ltd v Kingdom of Spain (The Prestige) [2013] EWHC 2840 (Comm) raises the important question of whether a person who refuses to appear in an arbitration, and who then contests enforcement of the award after the statutory time limits for challenging the award have expired, has lost the right of challenge.

It is a requirement under section 52(4) of the Arbitration Act 1996 that an award is reasoned. In Compton Beauchamp Estates Ltd v Spence [2013] EWHC 1101 (Ch) Morgan J discussed in some detail the meaning of “reasons” and the consequences of a failure to provide reasons. This is an important judgment of potential significance in arbitrations involving valuations and competing expert evidence.