DDT TRUCKS OF NORTH AMERICA LTD V DDT HOLDINGS LTD

[2007] EWHC 1542 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Cooke, 29 June 2007

Arbitration – Distributorship agreement containing arbitration clause – Agreement allegedly terminated by agreement – Arbitrator finding for claimants – Challenge to award – Jurisdiction – Whether arbitration clause also terminated – Whether perjured evidence produced by claimants – Whether error of law by arbitrator – Whether time for appeal should be extended – Arbitration Act 1996, sections 7, 67, 68, 69, 70 and 80

The parties entered into a distributorship agreement containing an arbitration clause. It was alleged by the respondent that the distributorship agreement had been terminated by a subsequent agreement. Arbitration proceedings were brought and the arbitrator found that the subsequent agreement was both void for mistake and had been induced by fraudulent misrepresentation. Costs were awarded to the applicant. In the present proceedings the applicant sought to enforce the costs order, and the respondent sought permission to extend the time to appeal against the original award some 9-10 weeks after the 28 day period allowed by section 70 of the Arbitration Act 1996. Cooke J refused to extend time on the ground that none of the possible challenges to the award would be made out. (1) The arbitrator had jurisdiction under section 67, as a result of the separability principle under section 7 under which the termination of the agreement to which the arbitration clause relates does not terminate the arbitration clause itself. (2) Allegations that the applicant’s controllers had given false evidence, based on an allegation of inconsistent evidence given by them in depositions in earlier proceedings but not available in the arbitration itself, did not justify a finding of serious irregularity under section 68(2)(g) (public policy and fraud) as the earlier depositions could have been produced in the arbitration but were not, and they did not demonstrate fraud. (3) Even if there was an error of law as regards mistake, section 69 was not satisfied because that mistake did not affect the outcome of the arbitration.