In a landmark ruling, the English Commercial Court has set aside an investor-state arbitral award under Section 68 of the Arbitration Act 1996, citing serious procedural irregularities that compromised the integrity of the arbitration process.
Background
The dispute involved a group of investors—Emma Louise Collins, Aman Lakhaney, Khadija Bilal Siddique, Colome Investments Limited, and ALKBS LLC—against Wind Energy Holding Company Ltd. The investors initiated arbitration proceedings, alleging that Wind Energy Holding had breached investment agreements. However, the arbitral tribunal ruled in favor of Wind Energy Holding, dismissing the investors’ claims.
The Section 68 Challenge
Dissatisfied with the award, the investors filed a challenge under Section 68 of the Arbitration Act 1996, arguing that the tribunal failed to consider key issues raised during the arbitration, thereby depriving them of a fair opportunity to present their case. Section 68 allows a party to challenge an arbitral award based on a “serious irregularity affecting the tribunal, the proceedings, or the award,” provided that the irregularity has caused or is likely to cause substantial injustice to the applicant.
The investors contended that the tribunal ignored crucial evidence and failed to address significant arguments regarding Wind Energy Holding’s alleged contractual violations.
Court’s Findings
After reviewing the case, the Commercial Court ruled in favor of the investors, determining that the tribunal’s failure to consider key issues constituted a serious irregularity under Section 68. The court emphasized that this omission could have affected the outcome of the arbitration, thereby causing substantial injustice to the investors.
As a result, the court set aside the arbitral award and remitted the case back to the tribunal for reconsideration. The tribunal was specifically instructed to address the overlooked issues in the new proceedings.
Implications of the Decision
This ruling underscores the English courts’ commitment to procedural fairness in arbitration. While Section 68 challenges are rare—given the high threshold required to establish “serious irregularity”—this case demonstrates that courts will intervene when a tribunal’s procedural failings compromise the integrity of the arbitral process.
Legal analysts note that this decision serves as a critical reminder to arbitral tribunals to ensure that they thoroughly address all issues presented by the parties. Failure to do so not only risks challenges under Section 68 but also undermines the finality and credibility of arbitration awards.
