CL-2025-000162 - [2025] EWHC 1945 (Comm)

’68 – Challenging the award: serious irregularity

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Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant –

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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.’

The 19 February 2025 application to the Tribunal to admit an irregularity was drafted on the basis, first, that the Tribunal had failed to deal with an issue which had been put to the Tribunal which, had it been dealt with would have resulted in the Tribunal’s finding that the Termination Notice was invalid (s. 68(2)(d) of the 1996 Act) and, secondly, that the Award had been obtained by fraud (s. 68(2)(g) of the 1996 Act). However, at the hearing of the application on 20 March 2025, the Claimants’ counsel withdrew the application for the Tribunal to admit irregularities under s. 68(2)(d) and (g) of the 1996 Act. Instead the Tribunal was invited to admit for the purpose of s. 68(2)(i) that paragraph 132 of the Award contained a textual error. It was submitted that the Tribunal had found that the parties had made two different assumptions about the service of the Default Notices and that in consequence there was no ‘common assumption.’

By Procedural Ruling No. 9 of 1 April 2025, the Tribunal stated that it did not admit any such error or irregularity.

On 11 April 2025, the Claimants issued the Arbitration Claim Form in the present proceedings seeking:

Orders under s. 68(3) of the 1996 Act that the Award (a) be remitted to the Tribunal in whole for reconsideration or (b) be set aside or (c) be declared to be of no effect, on the grounds that the Award was affected by serious irregularities under s. 68(2)(a) and/or (c) and/or (d) and/or (g) of the 1996 Act.

An extension of time to enable the Claimants to make the s. 68 application outside the 28 day time limit prescribed by s. 70(3) of the 1996 Act.

I will refer to this application as ‘the s. 68 application’.

On 2 May 2025 OWH applied for the summary dismissal of the s. 68 application.

At the hearing on 11 July 2025, Mr Taylor KC for the Claimants made it clear that, for the purposes of OWH’s summary dismissal application, the s. 68 application could be tested by the Claimants’ case on s. 68(2)(g). In other words, it was accepted that unless the case in relation to s. 68(2)(g) was strong enough to withstand summary dismissal, the s.68 application should be dismissed, and that it was not necessary to give further consideration to the alleged irregularities under s. 68(2)(a), (c) or (d).

The alleged irregularity under s. 68(2)(g) was put by the Claimants as follows:

s. 68(2)(g) provides that one of the kinds of irregularity which can count as a serious irregularity is

‘the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy’.

The Award was obtained by fraud in that OWH had knowingly failed to disclose documents that fell within the scope of an agreed Redfern Schedule issue, namely ‘… all documents relating to service/attempted service of all Margin Calls and Notices under the ISDA Agreement upon RTI and/or Rusal from February 2022 onwards … relevant to whether the requirements for proper service of such documents under the ISDA Agreement were met.’

OWH had stated in the arbitration that it had disclosed the results of a disclosure exercise in respect of that issue which had applied a keyword search across the mailboxes of identified custodians. Only one document was disclosed by OWH which was responsive to that issue.

The statement by OWH that only a single document was responsive to the issue was ‘fundamentally at odds’ with the evidence given by Mr Vitaly Andreev on behalf of OWH during the arbitration hearing. ‘By far the most significant’ part of that evidence was, the Claimants said, the following passage during Mr Andreev’s cross-examination:

A. So I was mostly following legal instructions on issuing these notices, and yeah, it was general understanding that we need to terminate the trades.