RAV Bahamas v Therapy Beach Club

A party seeking to challenge an arbitral award under s.68 of the Arbitration Act 1996 must demonstrate that there has been a “serious irregularity” that has affected the tribunal, the arbitral proceedings or the award, which has resulted in substantial injustice. The Judicial Committee of the Privy Council in RAV Bahamas Ltd v Therapy Beach Club Inc 1 recently overruled a decision of the Bahamas Court of Appeal, in allowing an application under an equivalent provision of s.68. The Privy Council was concerned with the allegations that the tribunal had failed both to allow the applicant a reasonable opportunity of putting its case and to address all of the issues that were put to it. The decision is significant in many respects, consolidating the numerous English authorities (largely from the High Court) on s.68, many of which were decided since the House of Lords considered the issues in Lesotho Highlands Development Authority v Impreglio SpA.2 In doing so, the Privy Council outlined important principles for the application of the provision, in particular, ruling that explicit pleadings of substantial injustice by parties, and findings of substantial injustice by courts, are not required for a successful challenge.

In December 2011, RAV Bahamas Ltd entered into a lease with Therapy Beach Club Inc for land in Bimini (an island in the Bahamas).3 The lease was for a term of three years, with an option for Therapy, as lessee, to renew the lease for a further term of three years on giving six months’ notice and subject to the parties’ agreement on rent. The lease also provided that Therapy was to pay RAV a sum of US$150,000 for the construction of a beach club that was to be completed within 120 days of receipt of payment. A dispute arose when Therapy alleged that that construction work was not properly carried out or completed. RAV contended that the lease was void, and subsequently demolished the beach club and evicted Therapy from the land.

The matter went to arbitration. In 2017, the arbitrator in question held in favour of Therapy on its actions for breach of contract (and various tortious claims). The arbitrator