Arbitration is a form of dispute resolution that involves the parties to a dispute agreeing to submit their case to an impartial third party, known as an arbitrator. The arbitrator is empowered to make a binding decision, known as an arbitral award, which the parties agree to abide by. However, in some cases, a party may wish to challenge the arbitral award, for example, if they believe that the arbitrator made a mistake or acted improperly. In the UK, parties may appeal an arbitral award under Section 69 of the Arbitration Act 1996.
The Arbitration Act of 1996 provides parties with the option of resolving disputes outside of the court system through arbitration. While arbitration is intended to be a faster and more efficient means of dispute resolution, parties may still be dissatisfied with the outcome of the arbitration process.
What is an Arbitral Award?
An arbitral award is the final decision made by the arbitrator after hearing the evidence and arguments presented by both parties. The award is binding on both parties and is enforceable in the same way as a court judgment. The arbitrator’s decision is usually based on the evidence presented, the applicable law, and the terms of the arbitration agreement
Overview of Section 69 of the Arbitration Act of 1996
Section 69 of the Arbitration Act of 1996 provides parties with the ability to appeal an arbitral award on a point of law. Specifically, this section permits a party to appeal to the court on a question of law arising out of an award made in an arbitration. The section applies to both domestic and international arbitration, and allows appeals to be made to both the High Court and the Court of Session in Scotland.
In order to bring an appeal under Section 69, the party seeking the appeal must first seek permission from the court. The application for permission must be made within 28 days of the date of the award, or such longer period as the parties may agree. The court will only grant permission to appeal if it is satisfied that the question of law is one which affects the outcome of the award.
Setting aside an Arbitral Award
In the UK, the process for setting aside an arbitral award is governed by the Arbitration Act 1996. The Act outlines specific grounds on which an award can be challenged, including irregularity in the conduct of the arbitration proceedings, lack of jurisdiction on the part of the arbitrator, or the award being obtained by fraud or corruption.
To challenge an award, an application must be made to the court within 28 days of the award being issued. The applicant must also provide evidence to support their claim, which may include witness statements and documentation from the arbitration proceedings.
If the court agrees that there are grounds to challenge the award, it may set aside the award in whole or in part. Alternatively, the court may remit the award back to the arbitrator for reconsideration.
It is worth noting that the grounds for challenging an arbitral award are limited, and the court will not review the merits of the dispute or the reasoning behind the arbitrator’s decision. Therefore, parties should carefully consider whether arbitration is the best option for resolving their dispute before entering into an agreement to arbitrate.
Grounds for Appeal
In order to successfully appeal an arbitral award, a number of requirements must be met. First, the party seeking the appeal must demonstrate that the appeal is based on a question of law. The term “question of law” is broadly interpreted, and includes questions of interpretation and application of the law, as well as questions of procedural or evidential fairness.
Second, the question of law must be one that affects the outcome of the award. This means that the court must be satisfied that the outcome of the arbitration would have been different if the question of law had been correctly determined.
However, an appeal against an arbitral award is not the same as a rehearing of the dispute. An appeal can only be made on limited grounds, which also include:
- The arbitrator lacked jurisdiction to make the award.
- The award was made in breach of natural justice.
- The arbitrator acted improperly or exceeded his or her powers.
- The award is in conflict with public policy.
It is important to note that an appeal cannot be made simply because one party is unhappy with the decision made by the arbitrator. There must be a valid legal reason for the appeal.
Procedure for Appeal
- Initiating an appeal:
The procedure for initiating an appeal against an arbitral award in the UK depends on whether the parties have agreed to an appellate process. If the parties have agreed to an appellate process, the appeal will be made in accordance with that process. If the parties have not agreed to an appellate process, the appeal will be made to the High Court.
To initiate an appeal, the party must file an appeal notice in the court within 28 days of the award being made. The appeal notice must include the grounds for appeal and the relief sought. The party must also serve a copy of the appeal notice on the other party.
The responding party must file a response to the appeal notice within 28 days of being served with the notice. The response must include the grounds for defending the award and any cross-appeal.
- Hearing of the appeal:
Once the appeal notice and response have been filed, the court will set a date for the hearing of the appeal. The hearing will be conducted in accordance with the Civil Procedure Rules, which govern civil litigation in the UK.
The hearing will typically involve the parties making oral submissions to the court. The court may also hear evidence from witnesses and may require the production of documents. The court may also ask the parties to make written submissions before or after the hearing.
Arbitral Awards – Key Cases
A number of key cases have considered appeals against arbitral awards under Section 69 of the Arbitration Act. The key case law regarding appeals against arbitral awards under Section 69 includes the following:
- Lesotho Highlands Development Authority v Impregilo SpA  UKHL 43: This case established that the standard of review for appeals under Section 69 is whether the arbitrator made an error of law that was significant to the outcome of the case.
- Dallah Real Estate and Tourism Holding Co v The Ministry of Religious Affairs, Government of Pakistan  UKSC 46: In this case, the UK Supreme Court clarified that the court should not embark on a review of the arbitrator’s factual findings, as Section 69 only allows for appeals on points of law.
- Atlasnavios-Navegacao Lda v Navigators Insurance Co Ltd  EWCA Civ 241: This case confirmed that an appeal under Section 69 requires the appellant to identify a specific point of law that arises out of the award.
- Halliburton Company v Chubb Bermuda Insurance Ltd  EWCA Civ 817: In this case, the Court of Appeal considered the issue of arbitrator bias and held that the test for apparent bias in the context of an arbitrator was the same as the test for apparent bias in the context of a judge.
These cases provide guidance on the circumstances in which an appeal against an arbitral award may be brought under Section 69, as well as the standard of review and the specific points of law that can be raised.
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