“(1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award. A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3). (2) Serious irregularity means an irregularity of one or more ofthe following kinds which the court considers has caused orwill cause substantial injustice to the applicant— (a) failure by the tribunal to comply with section 33 (general duty of tribunal); (b) the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction: see section 67); (c) failure by the tribunal to conduct the proceedings inaccordance with the procedure agreed by the parties; (d) failure by the tribunal to deal with all the issues that were put to it; (e) any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award exceeding its powers; (f) uncertainty or ambiguity as to the effect of the award; (g) the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy; (h) failure to comply with the requirements as to the form ofthe award; or (i) any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award. “(3) If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may—” (a) remit the award to the tribunal, in whole or in part, for reconsideration, (b) set the award aside in whole or in part, or (c) declare the award to be of no effect, in whole or in part. The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration. (4) The leave of the court is required for any appeal from a decision of the court under this section.”
“(1) The following provisions apply to an application or appeal under section 67, 68 or 69. (2) An application or appeal may not be brought if the applicant or appellant has not first exhausted— (a) any available arbitral process of appeal or review, and (b) any available recourse under section 57 (correction of award or additional award). (3) Any application or appeal must be brought within 28 days of the date of the award or, if there has been any arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of that process. (4) If on an application or appeal it appears to the court that the award— (a) does not contain the tribunal's reasons, or (b) does not set out the tribunal's reasons in sufficient detail to enable the court properly to consider the application or appeal, the court may order the tribunal to state the reasons for its award in sufficient detail for that purpose.”
“any award… shall contain sufficient reasons to show why the arbitrator has reached the decisions contained in it”
“shall contain the reasons for the award unless it is an agreed award or the parties have agreed to dispense with reasons”
“[36]…There is a difference between a failure to deal with an essential issue, which is an irregularity within section 68(2)(d) , and some other failure of reasoning, which is not. A failure of reasoning might in some cases allow a party to seek clarification under section 57(3) or might allow a party to seek an order from the court under section 70(4) . Further, a failureof reasoning may give rise to an irregularity within section68(2)(f) or may mean that the form of the award does not comply with section 52(4) , thereby enabling a party to contend that there is an irregularity within section 68(2)(h) . I will, later in this judgment, consider in detail the scope of the duty of an arbitrator to give reasons for his award.” “[51] It is clear from the above citations that an arbitratorshould explain why he has decided the essential issues in theway in which he has. An award which did not contain suchreasoning would not comply with section 52(4) of the 1996 Actand that would give rise to an irregularity within section68(2)(h) of the 1996 Act. However, there will only be a “serious irregularity” if the failure of reasoning has caused or will cause substantial injustice to a party…”
“[39] The essence of Margulead's complaint is that the arbitrator made no reference in his Award to the argument that Exide could not rely on mutual mistake as a defence because it had affirmed the agreement. [40] Margulead had specifically raised the affirmation and election point in its post-hearing brief. Exide also dealt with the point in its post-hearing brief. The arbitrator stated in his Correction Award in response to Margulead's application that he had given full consideration to all Margulead's arguments.... [41] A deficiency of reasons in a reasoned award is not capableof amounting to a serious irregularity within the meaning ofSection 68 of 1996 Act unless it amounts to a "failure by thetribunal to deal with all the issues that were put to it" withinSection 68(2)(d).In construing the meaning of (d) one musthave regard to Section 70(4). This provides: "(4) If on an application or appeal it appears to the court that the award (a) does not contain the tribunal's reasons, or (b) does not set out the tribunal's reasons in sufficient detail to enable the court properly to consider the application or appeal, the court may order the tribunal to state the reasons for its award in sufficient detail for that purpose." [42] Deficiency of reasoning in an award is therefore thesubject of a specific remedy under the 1996 Act. It is accordingly self-evident that: i) failure to deal with an "issue" under Section 68(2)(d) is not equivalent to failure to deal with an argument that had been advanced at the hearing and therefore to have omitted the reasons for rejecting it; ii) Parliament cannot have intended to create co-extensiveremedies for deficiency of reasons one of which ( Section 68 )was a general remedy which might involve setting aside orremitting the award in a case of serious injustice and one ofwhich (Section 70(4)) was designed to provide a specificremedy for a specific problem; iii) the court's powers under Section 68(2) being engaged only in a case where the serious irregularity has caused substantial injustice, the availability of the facility to apply for reasons or further reasons under section 70(4) would make it impossible to contend that any "substantial injustice" had been caused by deficiency of reasons. 43.. The meaning of "failure to deal with all the issues" must therefore refer to a failure to deal with a claim or a distinct defence to a claim advanced before the tribunal and not merely to an omission to give reasons for the tribunal's conclusion in respect of such claim or defence. It is in those cases in which the award expresses no conclusion as to a specific claim or a specific defence that the Award can be said to have failed to deal with an issue.”
“ In this connection [an application under section 57], it is clear that arbitrators are not in general required to set out in their reasons an explanation for each step taken by them in arriving at their evaluation of the evidence and in particular for their attaching more weight to some evidence than to other evidence or for attaching no weight at all to such other evidence.”
“[45] On analysis, these criticisms are all directed to asserting that the arbitrators misdirected themselves on the facts or drew from the primary facts unjustified inferences. Those facts are said to be material to an “issue”, namely what were the terms of the oral agreement. However, each stage of the evidential analysis directed to the resolution of that issue was not an “issue” within Section 68(2)(d). It was merely a step in the evaluation of the evidence. That the arbitrators failed to take into account evidence or a document said to be relevant to that issue is not properly to be regarded as a failure to deal with an issue. It is, in truth, a criticism which goes no further than asserting that the arbitrators made mistakes in their findings of primary fact or drew from the primary facts unsustainable inferences.
“77. By the time the arbitrators reached paragraph 174 of theiraward the dispute was already resolved in favour of HTA. Thearbitrators had no formal need to set out their conclusions onthe remaining matters argued… 80. Accordingly the attack on paragraph 174 of the award is inmy judgment in substance a criticism of the adequacy of thereasons rather than an assertion of an irregularity such as iscontemplated by s.68 . The points which each side were taking were fully canvassed in evidence and argument. Even if there was lingering uncertainty as to the extent of HTA’s case on Greek law, which I do not think there was, still acceptance by the tribunal of ABB’s case as to the restricted ambit of the nemo auditur doctrine would be sufficient to render its own bad faith completely irrelevant, whether as conduct debarring it from complaining of another’s bad faith or as conduct rendering that which would otherwise be bad faith good faith. In presenting its argument ABB sought to establish that the foundation upon which either way of putting the point depended simply did not exist. ABB was not deprived of the opportunity fairly to deal with the point. The tribunal did not fail to deal with an issue that was put to it. The issue here was whether HTA was in breach of its duty of good faith in refusing to accept Horizon’s unilateral declaration. The tribunal dealt with that submission by rejecting it. The reasoning set out insupport thereof may be unsatisfactory but that is not of itself aserious irregularity such as is mentioned in s.68 .It is suggestedthat if the arbitrators did not apply Greek law in coming to theirconclusion then they exceeded their powers, an irregularityunder s.68(2)(b) . It is however in my judgment inconceivablethat the arbitrators did not apply Greek law in coming to theirconclusion. There are references to Greek law at paragraphs 154, 173 and 175 of the award and it is plain to me that the arbitrators fully understood that they were applying the provisions of Greek law to the relevant parts of the dispute. The bulk of the third day of the arbitration hearing was taken up with cross-examination of expert witnesses, including vigorous questioning by the tribunal, as to the law of Greece relevant to these issues. It would of course have been happier had thearbitrators made some overt reference, in however summaryform, to the issue of Greek law upon which they had heard suchextensive argument. But it is not for this court to tell aninternational commercial tribunal how to set out its award orthe reasons therefor. Furthermore, strictly speaking the arbitrators did not need to address this issue at all as they had already conclusively decided the dispute in HTA’s favour on the Article 37.8 point. In reality, looked at in the light of all the material now before the court, ABB’s complaint is that the tribunal reached an erroneous conclusion as to the content of Greek law. That is not a serious irregularity even if it were made out.”
“67. All of these authorities and judicial observationsemphasise the restricted ambit of the jurisdiction under s.68 . Itis not a ground for intervention that the court considers that itmight have done things differently or expressed its conclusionson the essential issues at greater length. Furthermore it is particularly to be borne in mind in the context of international arbitrations that the arbitrators may not all have been brought up in the same legal tradition. In order to express the reasons for their award they must find language with which each is comfortable. Directing myself in accordance with these principles I turn to consider ABB’s challenge to this award under each head.”
“30. The authorities on s. 68 of the Act were extensively reviewed by Tomlinson J in ABB AG v Hochtief Airport GmbH[2006] 2 Lloyd's Rep 1 . I agree with the conclusions TomlinsonJ came to on the basis of these decisions. He held that theireffect is that an applicant under s.68 has a high hurdle toovercome: there will only be a serious irregularity if what hasoccurred is far removed from what could reasonably beexpected from the arbitral process (p. 17). If the issues in question have been “put into the arena”, there is no serious irregularity in extracting an alternative case from the submissions of the parties (p. 18, citing Warborough Investments v Robinson[2003] EGLR 149 ). It is not a groundfor intervention that the court considers that it might have donethings differently or expressed its conclusions on the essentialissues at greater length (p.19). If a party had a fair opportunity to address its arguments on all of the essential building blocks in the Tribunal's conclusion, the fact that the Tribunal did not refer back to the parties its analysis of the material before it and the conclusion it reached on it does not constitute a serious irregularity resulting in substantial injustice (p.21).”
“[28] Having considered these authorities my understanding of the law regarding allegations that an arbitral tribunal has overlooked evidence is as follows. A contention that the tribunal has ignored or failed to have regard to evidence relied upon by one of the parties cannot be the subject matter of an allegation of a serious irregularity within section 68(2)(a) or (d), for several reasons. First, the tribunal’s duty is to decide theessential issues put to it for decision and to give its reasons fordoing so. It does not have to deal in its reasons with each pointmade by a party in relation to those essential issues or refer toall the relevant evidence. Second, the assessment and evaluation of such evidence is a matter exclusively for the tribunal. The court has no role in that regard. Third, where a tribunal in its reasons has not referred to a piece of evidence which one party says is crucial the tribunal may have (i) considered it, but regarded it as not determinative, (ii) considered it, but assessed it as coming from an unreliable source, (iii) considered it, but misunderstood it or (iv) overlooked it. There may be other possibilities. Were the courtto seek to determine why the tribunal had not referred to certainevidence it would have to consider the entirety of the evidencewhich was before the tribunal and which was relevant to thedecision under challenge. Such evidence would include not only documentary evidence but also the transcripts of factual and expert evidence. Such an enquiry (in addition to being lengthy, as it certainly would be in the present case) would bean impermissible exercise for the court to undertake because itis the tribunal, not the court, that assesses the evidence adducedby the parties. Further, for the court to decide that the tribunal had overlooked certain evidence the court would have to conclude that the only inference to be drawn from the tribunal’s failure to mention such evidence was that the tribunal had overlooked it. But the tribunal may have had a different view of the importance, relevance or reliability of the evidence from that of the court and so the required inference cannot be drawn. Fourth, section 68 is concerned with due process. Section 68 isnot concerned with whether the tribunal has made the “right”finding of fact, any more than it is concerned with whether thetribunal has made the “right” decision in law. The suggestionthat it is a serious irregularity to fail to deal with certainevidence ignores that principle. By choosing to resolve disputesby arbitration the parties clothe the tribunal with jurisdiction tomake a “wrong” finding of fact.”
“[22] The damages awarded in respect of the Sharif family Other Assets… was… the most important part of the dispute to the parties… It is not just an “essential issue”… It is the essential issue.” “[30] There is.… no explanation in the Quantum Award as to the “discount” that has been applied, or the method by which this was reached, or what net figure it was applied to. The Tribunal has therefore failed to give any reason… as to how, or why, it reached its award of US$19 million in relation to the Sharif Family Other Assets.” “[33]… The tribunal has given no explanation at all as to how it reached the “overall assessment”… There is no way the partiescan understand how the decision was reached or on the basis ofwhat evidence.”
“42. There is no shortage of reported cases which discuss the issue as to what reasons ought to be provided for a judicial decision. These cases can be grouped as follows: (1) reasons to be given by a court (particularly in cases involving disputes between experts) ( Flannery v Halifax Estate Agencies Ltd[2000] 1 WLR 377 and English v Emery Reimbold Strick Ltd[2002] 1 WLR 2409 ) ; (2) reasons by arbitrators ( Re Poyser & Mills’ Arbitration[1964] 2 QB 467 and Bremer Handelgessellschaft v Westzucker (No. 2) [1981] 2 Lloyd’sRep 130 ); (3) reasons by statutory tribunals ( Mountview Court Properties Ltd v Devlin(1970) 21 P&CR 689 and Curtis v London Rent Assessment Committee[1997] 4 All ER 842 ); and (4) reasons for planning decisions ( Save Britain’s Heritage v Number 1 Poultry Ltd[1991] 1 WLR 153 and South Bucks DC v Porter (No. 2)[2004] 1 WLR 1953 ). It is also relevant to single out cases which discuss the giving of reasons in relation to valuation disputes: see Mountview and Curtis…”
“45. In Bremer Handelgessellschaft v Westzucker (No. 2) , at pages 132–133, Donaldson LJ described what was required for a reasoned award in the context of theArbitration Act 1979 , in these terms: “All that is necessary is that the arbitrators should set out what, on their view of the evidence, did or did not happen and should explain succinctly why, in the light of what happened, they have reached their decision and what that decision is. That is all that is meant by a ‘reasoned award’.”
“50. It was said in Curtis that the duty on the tribunal in that case to give reasons for its decision was less onerous than the duty on a court to give reasons for its decision. The same is sometimes said about the duty of an arbitrator to give reasons. Whatever the precise difference between the duties, I consider that the duty on an arbitrator to provide a reasoned award under section 52(4) of the 1996 Act is not less than the duty as described in the above cases dealing, in broadly similar ways, with arbitrators, tribunals and planning inspectors. The two cases which I have cited dealing with reasons to be given for court decisions (Flannery and English) involved the need to give reasons in relation to disputes as to expert evidence. In a case like the present, where the arbitrator is chosen for his experience in the relevant expert discipline, I do not see any particular reason why the duty on such an arbitrator to explain why he has preferred one expert to another should be fundamentally different from the duty on a court in such a case. [51] It is clear from the above citations that an arbitrator shouldexplain why he has decided the essential issues in the way inwhich he has. An award which did not contain such reasoningwould not comply with section 52(4) of the 1996 Act and thatwould give rise to an irregularity within section 68(2)(h) of the1996 Act. However, there will only be a “serious irregularity” if the failure of reasoning has caused or will cause substantial injustice to a party…”
“38. In the course of Mr Peters’ oral submissions on this application, he identified a number of alleged irregularities in relation to the proceedings and/or the award. However, itbecame more and more clear to me as the argument developedthat his case involved to a large extent multiple criticisms of theadequacy of the arbitrator’s reasons for his award. Indeed, the possibility emerged that if the Claimant were not able to succeed in its challenge to the adequacy of the arbitrator’s reasons, then it might be difficult for the Claimant to succeed on other grounds. Conversely, if the Claimant’s criticisms of the arbitrator’s reasons resulted in the matter being remitted to the arbitrator for further reasons, then the giving of those further reasons might be highly relevant to the other grounds of challenge which should only be finally determined in the light of any further reasons provided by the arbitrator.”
“Respondents contend that there is an “apparent omission” in the valuation of the potential recovery from the Sharif family in paragraph Q6 .10 (xii) of the Quantum Award: “Q6 .10 (xii) Having regard to all of the evidence I find that the appropriate valuation of the potential recovery from the Sharif family is US$100 million to be realised at some future date.”
“…I can accept that in many cases there will be substantial injustice where a party does not know the reasons for an award but I would not be prepared to hold that every failure of reasoning which amounts to an irregularity for the purposes of section 68(2)(h) will automatically give rise to substantial injustice. An obvious example is where the point in relation to which the reasoning is inadequate is a point of very little substance, even though it is relevant to the outcome. That might give rise to a case of some injustice but not substantial injustice. Further, in Lesotho Development at [35], Lord Steyn explained that the burden is squarely on an applicant relying on section 68 to secure (if he can) findings of fact which can establish the precondition of substantial injustice.”
“(7) In determining whether there has been substantial injustice, the Court is not required to decide for itself what would have happened in the arbitration had there been no irregularity. The applicant does not need to show that the result would necessarily or even probably have been different. What the applicant is required to show is that had he had an opportunity to address the point, the tribunal might well have reached a different view and produced a significantly different outcome.”