BANDWIDTH SHIPPING CORPORATION V INTAARI

[2007] EWCA Civ 998, Court of Appeal, Lord Justice Waller, Lord Justice Gage Lord Justice Lawrence Collins, 17 October 2007

Arbitration – Serious irregularity – Arbitrators not appreciating that counsel had not recognised significance of an argument – Whether arbitrators under duty to draw counsel’s attention to the point – Whether award could be set aside – Arbitration Act 1996, sections 33 and 68

This was a dispute concerning delays to an ice-classed vessel. The owners sought unpaid hire by reason of the delay, whereas the charterers argued that the delay was caused by the owners’ breach of a warranty that the vessel had adequate ice-breaking capabilities. In the course of oral argument an alternative case was made by the charterers with regard to the cause of specific delays, but this was not responded to as such by the owners. The arbitrators found in favour of the charterers on the causation point, and the owners sought to have the award set aside on the ground that the arbitrators should have drawn their attention to the significance of the point. The Court of Appeal held that, while in the interests of fairness an arbitrator should draw to a party’s attention the significance of a point which the arbitrators are aware was missed by him, where a party was represented by senior counsel and the arbitrator did not appreciate that the point had been missed it was not unfair not to make any comment on the point. In so deciding, the Court of Appeal emphasised that an award would not be set aside on the basis of procedural mishap (a ground for remission before 1996) but only for serious irregularity.