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

Well, it was not up to me to decide on this.

(emphasis added by Claimants’ representatives)

This evidence, it was said, ‘puts it beyond any real doubt that (a) Mr Andreev was not the only individual at OWH involved in the (attempted, defective) service of the Default Notices and (b) that there were communications between Mr Andreev and others at OWH on that topic’; and that ‘[i]t is inconceivable that no disclosable documents exist of any of the communications described in this evidence.’

Mr Taylor KC submitted: ‘The Claimants recognize the gravity of this allegation, which is effectively one of dishonesty. To be clear, no allegation of dishonest or fraudulent conduct of any form is directed against the legal professionals engaged by OWH in respect of the disclosure process (or indeed in respect of any other conduct in the Arbitration)’. Furthermore, he submitted that: ‘RTI is in the invidious position of being unable to evidence the falsity of OWH’s statement to the Tribunal that it had given proper disclosure of documents responsive to the Issue unless and until it has sight of its hitherto-undisclosed documents.’

The Claimants contended that the s. 68 application was issued within time, on the basis that their 19 February 2025 application to the Tribunal for an admission pursuant to s. 68(2)(i) of the 1996 Act had postponed the running of time. Alternatively, the Claimants sought an extension of time.

For OWH Mr Handyside KC submitted that the Claimants’ case on s. 68(2)(g), and which I have outlined above, was one which, professionally, should not have been advanced by Mr Taylor KC. It was entirely improper, he said, to make an allegation of dishonesty which could not be (and which it was admitted could not be) particularized without sight of documents which the Claimants hypothesized to exist. Furthermore, as far as the points with which the court would be concerned, Mr Handyside KC submitted: (a) that the application was out of time; (b) that an extension should not be granted; and (c) because of those matters and in any event, the s.68 application was hopeless and should be summarily dismissed.

I consider that it is convenient to address first the issue of whether the application is in time and, if it is not, whether an extension of time should be granted. This is because, if an extension of time is needed and is not granted, then the application should be summarily dismissed for that reason.

The Claimants’ contention that the s. 68 application is brought in time and that no extension is required is based on the argument that their making of an application to the Tribunal that it should admit an irregularity in the conduct of the proceedings or in the Award constituted the pursuit of an ‘available arbitral process of appeal or review’. Section 70(2) of the 1996 Act states that, ‘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…’. Accordingly, the Claimants say, they could not have brought the s. 68 application until they had exhausted that process of seeking the Tribunal’s admission of an error.

This argument appears to me to be clearly wrong, for the following reasons.

Asking the Tribunal to admit an irregularity was not the operation of an ‘arbitral process of appeal or review’. I agree with the approach of Teare J in K v S [2015] EWHC 1945 (Comm), and of Bryan J in Daewoo Shipbuilding v Songa Offshore Equinox [2018] EWHC 538 (Comm) that ‘an arbitral process of appeal or review’ is a reference to a process by which an award is subject to an appeal or review by another arbitral body. I, like Teare J and Bryan J, respectfully disagree with the view expressed by Jackson J in Surefire Systems Ltd v Guardian ECL Ltd [2005] BLR 534 at [27]. For this reason alone, the application to the Tribunal for an admission of an irregularity did not qualify as ‘an arbitral process of appeal or review’.

Even if I am wrong in relation to the general statement in the last sub-paragraph (as to a process of appeal or review involving another arbitral body), I do not, in any event, consider that what was sought here (namely an admission by the Tribunal of an irregularity) constituted the invocation of a ‘process of appeal or review’. Thus I do not consider that there was here any ‘process’ within the meaning of the section. The request for an admission was not made on the basis of a procedural rule applicable to the arbitration, whether contained in the LCIA Rules or the arbitration agreement; it was, instead, entirely ad hoc. Furthermore, even if an ‘arbitral process’ was involved, it was clearly not a ‘process of appeal’. Nor, in my view, was it a ‘process of review’. An LCIA tribunal cannot review or reconsider its decision. When presented with a request for an admission or an irregularity, such a tribunal’s options are limited to making the admission (which would facilitate an application to the court) or decline to make it. This is not accurately described as a process of review.

Were the Claimants’ argument correct, then in all cases time to bring an application or appeal under ss. 67-69 of the 1996 Act could be postponed pending the exhaustion of a request by a party that the tribunal should admit an irregularity. That would allow a party to extend the time for bringing a challenge before the court simply by asking for the tribunal to accept that something had gone wrong. That would be inconsistent with the 1996 Act’s policy of speed and finality in arbitration.

Even if an application to a tribunal for an admission of an irregularity could count as an arbitral process of appeal or review, such an application (as with an application for recourse under s. 57 of the 1996 Act) would only postpone the running of the 28 day period if the application were ‘material’ in the sense that it was ‘necessary to enable the party to know whether he has grounds to challenge the award or not’: see Daewoo Shipbuilding v Songa Offshore Equinox [2018] EWHC 538 (Comm) at [61]-[65]. That is not the case here. The Claimants initially invited the Tribunal to admit irregularities that would fall within s. 68(2)(d) and (g) of the 1996 Act. They did not need the Tribunal’s involvement to know whether they had grounds to make challenges to the Award under s. 68(2)(d) and (g). This is emphasized by what happened: at the hearing, the Claimants withdrew their request that the Tribunal admit irregularities under s. 68(2)(d) and (g), but nevertheless brought a challenge to the Award on those bases by the s. 68 application.

I accordingly reject the Claimants’ case that their 19 February 2025 application to the Tribunal extended time, and that the s. 68 application was brought within the 28 day period specified in s. 70(3) of the 1996 Act.

The question then arises as to whether the Claimants should be granted an extension of time. There was no dispute that the principles on which the court should act were accurately summarized in paragraph [27(1) and (2)] of Terna Bahrain Holding Company WLL v Al Shamsi [2012] EWHC 3283 (Comm) per Popplewell J. What was there said was:

‘(1) Section 70(3) of the Act requires challenges to an award under sections 67 and 68 to be brought within 28 days. This relatively short period of time reflects the principle of speedy finality which underpins the Act, and which is enshrined in section 1(a). The party seeking an extension must therefore show that the interests of justice require an exceptional departure from the timetable laid down by the Act. Any significant delay beyond 28 days is to be regarded as inimical to the policy of the Act.

The relevant factors are:

the length of the delay;

whether the party who permitted the time limit to expire and subsequently delayed was acting reasonably in the circumstances in doing so;

whether the respondent to the application or the arbitrator caused or contributed to the delay;

whether the respondent to the application would by reason of the delay suffer irremediable prejudice in addition to the mere loss of time if the application were permitted to proceed;

whether the arbitration has continued during the period of delay and, if so, what impact on the progress of the arbitration, or the costs incurred in respect of the arbitration, the determination of the application by the Court might now have;

the strength of the application;

whether in the broadest sense it would be unfair to the applicant for him to be denied the opportunity of having the application determined.’

Applying that approach in the present case, I have reached the firm conclusion that an extension should not be granted.

In relation to factor (i), length of delay, the yardstick is the 28 day period specified in the 1996 Act. The delay in this case, from 1 November 2024 to 11 April 2025, was substantial.

Factor (ii) involves an investigation of the reasons for the delay. No adequate explanation for the delay has been given. Although it has been suggested on the Claimants’ behalf that they had to exhaust any arbitral process of review, I do not consider that it was reasonable to consider that the making of an application to the Tribunal to admit an irregularity constituted an arbitral process of review. In any event, if the concern was that they needed to exhaust an arbitral process of review, this does not account for the fact that the Claimants failed to raise any issues about the Award until February 2025.

As to factor (iii), neither OWH nor the Tribunal caused or contributed to the delay.

In relation to factor (iv), it is not established that OWH will suffer irremediable prejudice by the delay over and above the ordinary prejudice of delay.

As to factor (vi), the strength of the application, the court will not usually conduct a substantial investigation into the merits of the challenge application. However, where it can be readily seen that the challenge is either strong or weak, then that is relevant. In the present case, for reasons which I will expand upon below, the challenge can readily be seen to be weak. This accordingly is a factor which tells against the grant of an extension. It is not a decisive factor, in that I would have reached the same conclusion as I have without regard to it.

As to factor (vii), in light of the above matters, and the fact that the fraud which the Claimants now wish to allege was, on their own case, apparent from Mr Andreev’s evidence in the arbitration, I do not consider that it can be said to be unfair to the Claimants if they were now denied the opportunity of having the s. 68 application determined.

Given that an extension of time is required, and is not granted, the s. 68 application will be summarily dismissed for that reason.

I should, however, also consider whether that application should be dismissed because of its intrinsic weakness.

The nature of the test for whether there has been a serious irregularity for the purposes of s. 68 of the 1996 Act was summarized by Foxton J in Czech Republic v Diag Human SE [2024] EWHC 503 (Comm) at [160], by reference to the principles enunciated by the Privy Council in RAV Bahamas Ltd v Therapy Beach Club [2021] AC 907 (references being to paragraphs in the judgment of Lords Hamblen and Burrows in the latter case), as follows:

‘i) The test of serious irregularity was intended to limit intervention to “extreme” cases where it could be said that “the tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected” ([30]).

Serious irregularity has been recognised as imposing a “high threshold” or as “the hurdle” ([31]).

The focus is on due process, not the correctness of the decision reached ([32]).

Even if a case is shown to fall within one or more of the kinds of irregularities listed in section 68 this will only amount to a serious irregularity if the court considers that it “has caused or will cause substantial injustice”, which means “more than some injustice” ([33]).

There will be substantial injustice where it is established that, had the irregularity not occurred, the outcome of the arbitration might well have been different, but it is not necessary to show that the outcome would “necessarily or even probably be different” ([34]).

Some irregularities may be so serious that substantial justice is “inherently likely” or “likely in the very nature of things” to result ([35]), including where “on a central matter a finding is made on a basis which does not reflect the case which the party complaining reasonably thought he was meeting, or a finding is ambiguous, or an important issue is not addressed.”

In general, there will, however, be no substantial injustice if it can be shown that the outcome of the arbitration would have been the same regardless of the irregularity ([37]).’

Where the irregularity alleged is of the kind referred to in s. 68(2)(g) of the 1996 Act, ‘the focus is not on the claim on which the 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 was obtained’: Federal Republic of Nigeria v Process & Industrial Development Ltd [2023] EWHC 2638 (Comm) at [474].

In my judgment the Claimants have not put forward a case with any real prospect of success that the Award was obtained by fraud or that the Award or the way it was procured was contrary to public policy.

As I have said, the Claimants made it clear that their case can be tested by reference to the supposed revelations in or necessary implications of Mr Andreev’s evidence, quoted above. That evidence, it is contended, indicates that there must have been deliberate withholding of documents by OWH and thus fraud in the conduct of the arbitration. In my view, the passage in question does not give rise to such an inference.

It does not specify that there are any relevant documents other than the document disclosed.

Insofar as the evidence is consistent with there being other documents, it does not indicate that they would be disclosable. In particular, given the reference to ‘legal instructions’ and ‘the legal’, the evidence tends to suggest that questions of privilege may have been involved.

There is nothing in the passage of evidence relied upon which shows that, if there was a failure to provide proper disclosure, that must have been the result of fraud rather than some non-fraudulent error.

Given that it is not suggested that OWH’s legal representatives were involved in any fraudulent behaviour at all, what would, presumably, have been required for there to be deliberate non-disclosure of relevant documents would have been a careful culling of the documents which OWH revealed to its solicitors to have existed. Neither the passage from Mr Andreev’s evidence, nor anything else shown by the Claimants to the court supported such a case. In particular there was no identification by the Claimants as to who had committed the alleged fraud.

Furthermore, the material produced by the Claimants does not establish a case which has a realistic prospect of success that, without any irregularity consisting of the non-disclosure of documents which should have been disclosed, the outcome of the arbitration might well have been different. The Claimants’ case is, in truth, speculative both as to the existence of any other disclosable documents, and as to what they might have said.

I would accordingly dismiss the Claimants’ s. 68 application for this additional reason.