Palmat NV v Bluequest Resources AG
[2023] EWHC 2940 (Comm)
LMH v EGK
19 July 2023
[2023] EWHC 1832 (Comm)
High Court
A company (LMH) lost an arbitration case and tried to get the decision overturned. The judge reviewed the case and found that the arbitration was fair, even though there might have been a small calculation error that should have been corrected through the proper process during the arbitration itself. The company lost its challenge, so the original arbitration decision stands.
Key Facts
- •LMH, a mobile phone operator, and EGK had a long-term contract (MSA) for telecommunication services.
- •LMH served a termination notice, which EGK disputed, leading to ICC arbitration.
- •The Tribunal found LMH breached its good faith negotiation obligation under the MSA and awarded EGK €10,270,400.
- •LMH challenged the award under s.68 of the Arbitration Act 1996 on five grounds of serious irregularity.
Legal Principles
Section 68 of the Arbitration Act 1996 provides a closed list of grounds for challenging an arbitral award, requiring proof of the irregularity and substantial injustice.
Arbitration Act 1996, s.68
The threshold for a successful s.68 challenge is high; it applies only in extreme cases where the tribunal's conduct is seriously flawed.
Lesotho Highlands Development Authority v Impreglio SpA [2006] 1 AC 221, [28]; Departmental Advisory Committee Report on the Arbitration Bill of February 1996, [280]
A tribunal's duty is to decide the essential issues and provide reasons; it doesn't need to address every point or piece of evidence.
UMS Holding Ltd v Great Station Properties SA [2017] EWHC 2398 (Comm), [28]
Tribunals can make their own loss calculations if the essential building blocks were in play, even if not precisely articulated by parties.
Reliance Industries Ltd v The Union of India [2018] EWHC 822, [32]; RAV Bahamas Ltd v Therapy Beach Club [2021] AC 907
An arbitral tribunal may correct clerical, computational, or typographical errors under Article 36 of the ICC Rules or s.57 of the Arbitration Act 1996.
ICC Rules, Article 36; Arbitration Act 1996, s.57
Failure to exhaust available recourse under s.57 before bringing a s.68 application is a bar to the application.
Arbitration Act 1996, s.70(2)(b)
Outcomes
LMH's challenge under s.68 failed on all five grounds.
The Tribunal addressed the causation issue and gave sufficient reasons; the alleged procedural irregularities did not meet the high threshold for a s.68 challenge; and any computational error should have been addressed under Article 36 of the ICC Rules.
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