The House had to consider whether the arbitrator had acted in excess of his powers under s38, saying the arbitrator had misconstrued the contract. The arbitrator had made his award in different currencies.
Held: The question remained whether the arbitrator had exceeded its powers, not whether they had been wrongly exercised. An error of law on its own did not constitute an excess of power. The House allowed the appeal, set aside the order for remission of the award, and dismissed the employer’s application.
Lord Steyn stated: ‘But the issue was whether the tribunal ‘exceeded its powers’ within the meaning of section 68(2) (b). This required the courts below to address the question whether the tribunal purported to exercise a power which it did not have or whether it erroneously exercised a power that it did have. If it is merely a case of erroneous exercise of power vesting in the tribunal no excess of power under section 68(2) (b) is involved. .
section 68(2) (b) does not permit a challenge on the ground that the tribunal arrived at a wrong conclusion as a matter of law or fact. It is not apt to cover a mere error of law . .
In order to decide whether section 68(2)(b) is engaged it will be necessary to focus intensely on the particular power under an arbitration agreement, the terms of reference, or the 1996 Act which is involved, judged in all the circumstances of the case. In making this general observation it must always be borne in mind that the erroneous exercise of an available power cannot by itself amount to an excess of power. A mere error of law will not amount to an excess of power under section 68(2) (b).’
Lord Steyn, Lord Hoffmann, Lord Phillips of Worth Matravers, Lord Scott of Foscote, Lord Rodger of Earlsferry
[2005] UKHL 43, Times 06-Jul-2005, [2005] 27 EG 220, [2005] 3 WLR 129, [2006] AC 221, [2005] 3 All ER 789, 101 Con LR 1, [2005] 2 All ER (Comm) 265, [2005] BLR 351, [2005] 2 Lloyd’s Rep 310, [2005] 2 CLC 1
Bailii, House of Lords
Arbitration Act 1996 48(4) 68
England and Wales
Citing:
First Instance – Lesotho Highlands Development Authority v Impreglio SpA and Others QBD 15-Nov-2002
The parties had submitted their dispute to arbitration. The arbitrator had made his award payable in certain currencies. The payer contended that this was in excess of his jurisdiction.
Held: The reference to the arbitrator continued the . .
Appeal from – Lesotho Highlands Development Authority v Impregilo Spa and others CA 31-Jul-2003
The parties went to arbitration to resolve disputes in a construction contract. The award appeared to have been made for payment in currencies different from those set out in the contract. The question was asked as to whether the award of interest . .
Approved – Seabridge Shipping AB v AC Orssleff’s EFtF’s A/S QBD 1999
The court discussed the policies underlying the 1996 Act: ‘One of the major purposes of the Arbitration Act 1996 was to set out most of the important principles of the law of arbitration of England and Wales in a logical order and expressed in a . .
Cited – In re United Railways of the Havana v Regla Warehouses Ltd CA 1960
There had been a financing transaction by way of a lease by a Pennsylvania corporation, as trustee for foreign bondholders, to an English company carrying on business in Cuba, of assets in Cuba. By a Cuban decree the assets were transferred to the . .
Cited – Patel v Patel CA 24-Mar-1999
A party applying to set a default judgment aside with associated leave to defend did not thereby take any substantial step in proceedings which would debar him from insisting that the matter be stayed pending a referral to arbitration. . .
Cited – Jugoslavenska Oceanske Plovidba v Castle Investment Co Inc CA 1974
London arbitrators had made an award for unpaid hire in US dollars, being the currency of the hire contract. An issue arose whether an English court could give leave under the Act to enforce the award in the same manner as a judgment to the same . .
Cited – Harbour Assurance Co (UK) Ltd v Kansa General International Insurance Co Ltd CA 7-Apr-1993
An action was brought by re-insurers for a declaration that reinsurance policies were void for illegality, and that the plaintiffs were not liable under them. The illegality alleged was that the defendants were not registered or approved to carry on . .
Cited – Miliangos v George Frank (Textiles) Ltd HL 1975
The issue was whether an English court was able to award damages in Sterling only.
Held: The House distinguished clearly between the substance of the debtor’s obligations and the effect of English procedural law when a debt in a foreign . .
Cited – Services Europe Atlantique Sud (SEAS) v Stockholms Rederiaktiebolag Svea HL 1979
. .
Cited – Anisminic Ltd v Foreign Compensation Commission HL 17-Dec-1968
There are no degrees of nullity
The plaintiffs had owned mining property in Egypt. Their interests were damaged and or sequestrated and they sought compensation from the Respondent Commission. The plaintiffs brought an action for the declaration rejecting their claims was a . .
Cited – K/S A/S Bill Biakh v Hyundai Corporation 1988
. .
Cited – Bank Mellat v GAA Development and Construction Co 1988
. .
Cited – Services Europe Atlantique Sud (SEAS) v Stockholms Rederiaktiebolag Svea HL 1979
. .
Cited by:
Cited – ED and F Man Sugar Ltd v Belmont Shipping Ltd ComC 18-Nov-2011
Allegation of serious irregularity in arbitration.
Held: The request was refused: ‘the present case can hardly be said to be an extreme case which justice calls out to be corrected.’.
‘Arbitrators are not barred from asking a party . .
Cited – Kaneria v The English and Wales Cricket Board Ltd ComC 6-May-2014
kaneira)ecbComc0514
The claimant, a professional cricketer disciplined for alleged match fixing, sought to challenge the results of an arbitration of his dispute with the respondent. He alleged a serious irregularity in that the Arbitral Panel had exceeded its powers . .
Lists of cited by and citing cases may be incomplete.
Arbitration
Leading Case
Updated: 01 November 2021; Ref: scu.228062