Dealing with crucial issues in pectore

Petrochemical Industries Company (KSC) v Dow Chemical Company [2012] EWHC 2739 (Comm), [2012] All ER (D) 83 (Nov); NLJ 16 November

It is an established principle that it is not sufficient for an arbitral tribunal to deal with crucial issues in pectore, such that the parties were left to guess at whether a crucial issue had been dealt with or had been overlooked: the legislative purpose of s68(2)(d) of the Arbitration Act 1996 (AA 1996) was to ensure that all the issues, the determination of which were crucial to the tribunal’s decision, were dealt with and that could only be achieved, in practice, if it was made apparent to the parties (normally from the award or reasons) that those crucial issues had indeed been determined. It was also settled law that the assertion that the arbitrator had failed to take any or proper consideration of the evidence could, in an exceptional case, give rise to a challenge under s68 of AA 1996, based on the general duty of an arbitrator under s33 of AA 1996 if, for example, an arbitrator had genuinely overlooked evidence that had really mattered or had misunderstood it.