NO SHORT CUTS – LESSONS FOR ARBITRATORS AND COUNSEL FROM THE RAYTHEON JUDGMENTS
Two recent related judgments in the Technology & Construction Court have raised important questions for both arbitrators and practitioners regarding the conduct of international arbitration.
It is a fundamental principle of English law relating to arbitration that arbitration is a consensual process and the parties to a contract are, to a very great extent, free to agree upon the manner in which their arbitration should be conducted. This freedom includes being permitted to contract out of the (albeit limited) right to seek leave to appeal on a point of law under s. 69 of the Arbitration Act 1996. The rules of most international arbitral institutions make clear that that right is indeed excluded for those who choose to arbitrate under their auspices.
The Arbitration Act does, however, regard certain rights as too important to be removed by agreement. These include the right to challenge an award of arbitrators on the grounds that the tribunal lacked substantive jurisdiction and the right to challenge an award on the ground of serious irregularity. Successful challenges on this latter basis are, quite rightly, as rare as the proverbial hen’s teeth.
However, on 19 December 2014, Akenhead, J. issued a judgment in The Secretary of State for the Home Department v Raytheon Systems Limited [2014] EWHC 4375 (TCC) in which he concluded that the arbitral tribunal had failed to deal with all of the issues that were put to it and that there had therefore been a serious irregularity which “it almost went without saying” had caused substantial injustice to the respondent.
Jul-Sep 2015 issue
4 New Square