ARBITRATION — Tribunal— Fairness — Application to remit arbitration award for unfairness — Whether arbitrator acted unfairly if no appreciation that party missed a point — Arbitration Act 1996 ( c 23), s 33, s 68

Bandwidth Shipping Corpn v Intaari [2007] EWCA Civ 998

CA ( Waller,Gage and Lawrence Collins LJJ): 17 October 2007

An application under s 68 of the Arbitration Act 1996 to remit an arbitration award on the grounds of the tribunal’s unfairness faced a high hurdle. If an arbitrator appreciated that a party had missed a point then fairness required the arbitrator to raise it so that the party could deal with it. But where there was no such appreciation it was not unfair to leave it to counsel, particularly highly experienced counsel who showed a detailed knowledge of the case, to take such points as he wished.

The Court of Appeal so stated when dismissing the appeal of Bandwidth Shipping Corpn, owners of the Magdalena Olendorrf, against a decision on 17 October 2006 of Christopher Clarke J [2006] EWHC 2532 (Comm) refusing its application under s 68 of the Arbitration Act 1996 to have an arbitration award in favour of Intaari, charterers, remitted to the arbitrators on the grounds of unfairness.

WALLER LJ said that the issue was whether the arbitration tribunal acted contrary to its duty in s 33 of the 1996 Act to act fairly. S 33 had to be approached by reference to the conduct of the arbitrators. For an irregularity to be established it must be shown that the tribunal acted unfairly by failing to give a party a reasonable opportunity of putting his case or dealing with that of his opponent. The authorities summarised in ABB AG v Hochtief Airport GmbH [2006] 2 Lloyd’s Rep 1 indicated that an application under s 68 faced a high hurdle. It was right to place a high hurdle for an application to set aside an award or its remission. Losers often thought that injustice had been perpetrated when their factual case had not been accepted. It could be said to be “unjust” if arbitrators got the law wrong, but if there was no appeal to the court because the parties had agreed to exclude the court, the decision was one they must accept. It would be a retrograde step to allow appeals on fact or law from the decision of arbitrators to come in by the side door of an application under ss 33 and 68. The Vimeira [1984] 2 Lloyd’s Rep 66 supported the view that if an arbitrator appreciated that a party had missed a point then fairness required the arbitrator to raise it so that the party could deal with it. But where there was no such apprecation it was not unfair to leave it to counsel, particularly highly experienced counsel who showed a detailed knowledge of the case, to take such points as he wished. The appeal would be dismissed.

GAGE LJ and LAWRENCE COLLINS LJ agreed.

Appearances: Timothy Young QC and Michael Collett ( MFB Solicitors) for the owners; Luke Parsons QC and Christopher Smith( Ince & Co, Hamburg) for the charterers.

Reported by: Alison Sylvester, barrister