CL-2024-000260 - [2025] EWHC 2539 (Comm)

Taking the language of section 68(1), the Claimants seek to advance, by the proposed amendment, the case that there was “serious irregularity affecting … the award”. Taking the language of section 68(2), the serious irregularity is said to be of the kind described by section 68(2)(g). Mr Mark Wassouf for the Claimants argued that if the LOE was, as the Claimants contend, a “contract for fraud” then the Award is within the language “the award … being contrary to public policy”.

With respect, I cannot accept the argument. The Claimants’ proposed case is a case on the merits of the contract claim that (if the Tribunal had jurisdiction) the parties had agreed should be for the Tribunal to decide. This is so even though the Claimants did not raise it before the Tribunal. The consequences of accepting the Claimants’ argument that its proposed case is within section 68 would be very substantial for the relationship between the Courts and arbitration.

I held in Nigeria v P&ID (above) at [474]that the focus of section 68 is not on the claim on which an award is based or the cause of action on which the claim is based, but is on the parties’ conduct in the arbitration and the process by which the award is obtained:

“The section is concerned with serious irregularity "affecting the tribunal, the [arbitral] proceedings or the award". Subsection (2) lists nine "kinds" of irregularity. In the present case our focus is on kind (g). That is concerned with "the award" and "the way in which it was procured". For irregularity kind (g), it is the award that must be "obtained by fraud"; it is the award or the way in which the award is procured that must be "contrary to public policy". The focus is not on the claim on which the award is based or the cause of action on which the claim is based. Lord Wolfson KC submitted:

‘The s. 68 jurisdiction is structured and circumscribed and, for sound reasons of policy, requires a close focus on the parties' conduct in the arbitration and the process by which the award was obtained.’

I respectfully agree.”

See further [480], [484]-[486].

In the present case there is no suggestion that the arbitration process was interfered with. According to the Claimants, the Tribunal should have declined to award the sum it did to the Defendant because the LOE was a contract for fraud and illegal. But the Tribunal did not find that the LOE was a contract for fraud and illegal.

The Claimants’ case by the proposed amendment is, on analysis, that the Tribunal did not arrive at the correct decision in its Award. But “nowhere in section 68 is there any hint that a failure by the tribunal to arrive at the "correct decision" could afford a ground for challenge under section 68”:Lesotho Highlands Development Authority v. Impregilo SpA and others [2005] UKHL 43 at [29], and see also R v V [2008] EWHC 1531 (Comm).

Mr Wassouf recognised that what he termed “the classic case” under Section 68(2)(g) goes to process in the arbitration but argued that the wording in the subsection contemplates that there may be an objection “which is not procedural in nature”; it allowed for the possibility of a “residual case” where “although everything was fine in the arbitration, the resultant award is objectionable on grounds of public policy”.

Mr Wassouf asked rhetorically that if one needs to show procedural irregularity in order to come within Section 68, what effect is left for the wording “an award …. being contrary to public policy”; “what situation would involve an award contrary to public policy, but not a procedure that was contrary to public policy?”

I gave one answer in Nigeria v P&ID at [488]-[492]. This was of the situation where the parties entered into a contract, and the intention of a party was “not to perform it but simply to use it as a device to get an award or settlement.” This was “the very different case” where “[a] contract is a first or early step in carrying out” an overall fraudulent enterprise or plan from the start to procure an award. In those circumstances the award itself would be contrary to public policy as the object of the plan.

As an alternative to his argument that the Award itself is contrary to public policy because it is based on a contract for fraud, Mr Wassouf sought to fit the Claimants’ case into that “very different case” I had described in Nigeria. He argued that the alleged illegality of the contract and of the manner of its performance were matters capable of grounding a challenge to the Award under section 68(2)(g) “because these matters could well lead to the conclusion that the award was procured by fraud, as part of an overall fraudulent enterprise”.

But Mr Wassouf properly made clear that he did not say that the Defendant “necessarily entered into this fraudulent enterprise in order to procure the award”. Instead, he was saying that when the Claimants would not pay, the Defendant advanced the enterprise by obtaining the Award. I do not consider that does fit the “very different case”.

On the facts in Nigeria v P&ID, I reached the conclusion that the “very different case” was also not made out there. However, I found sets of circumstances that did bring the case within section 68(2)(g): see [493]-[497]. Each was concerned with the arbitration process and none has a parallel in the present case.

The first set of circumstances was P&ID's providing to the tribunal and relying on evidence before the tribunal that was material but was evidence that P&ID knew to be false. The second was P&ID's continued bribery or corrupt payment of Mrs Grace Taiga directed to the period of the arbitration in order to suppress from the tribunal and Nigeria the fact that she had been bribed when the contract in that case came about. This was fairly described by Nigeria as bribery "to keep her 'on-side', and to buy her silence about the earlier bribery". The third was P&ID's improper retention of what were defined as Nigeria’s Internal Legal Documents received by P&ID during the arbitration. I found that P&ID retained these (rather than returned them unread) so as to monitor Nigeria’s position and awareness as the arbitration continued, and that this included monitoring whether Nigeria had become aware of the deception being practised by P&ID on the tribunal and on Nigeria as a party before the tribunal.

I also make clear that there is not before the Court on this application the situation where the Tribunal found that the LOE was a contract for fraud or illegal and yet still went on to make the Award. Nor am I dealing with a case where it is said that, even though the allegation was not raised by the Claimants, the Tribunal nonetheless should on its own initiative have inquired into or investigated whether the LOE was a contract for fraud or illegal, but without doing so went on to make the Award.

The fact that section 68 concerns “serious irregularity”, defined to include the requirement for “substantial injustice” further helps confirm the role of the section. In RAV Bahamas v Therapy Beach Club [2021] UKPC 8; [2021] AC 907 Lords Hamblen and Burrows cited at [30] paragraph 280 of the 1996 Report on the Arbitration Bill of the Departmental Advisory Committee on Arbitration Law. Part of the paragraph cited was in these terms: