The Commercial Court has dismissed a claim that two arbitral awards should be set aside on the basis that they contained serious irregularities. The judgment of Mr Justice Cooke sets out the very limited circumstances in which the Court should interfere with arbitral awards. The defendant (Siemens) persuaded the Court that a claimant who seeks to misuse the provisions in the Arbitration Act 1996 to re-argue its case before the Court will be guilty of unreasonable conduct and should be ordered to pay indemnity costs.
The claimant (Biotec) brought a wide-ranging and speculative claim against Siemens under the LCIA Rules of Arbitration, alleging unlawful means conspiracy, breach of contract and breach of confidence. Siemens successfully argued that there was no evidence to support the claims and they were dismissed in September 2014 following a two-week trial. Siemens sought an order for costs on the indemnity basis and the Arbitrator agreed, awarding Siemens 90% of its costs.
Biotec sought to set aside these arbitral awards under section 68 of the Arbitration Act 1996 on the basis that they contained various “serious irregularities”. Siemens argued that Biotec's claims were in fact nothing more than an attempt to re-argue its case and overturn the arbitrator’s findings, which is not permitted under section 68. Mr Justice Cooke accepted Siemens' submissions and held that “Section 68 cannot be used to mount a challenge to the Arbitrator’s findings of fact or conclusions of law” and dismissed the claims. Siemens sought an order that its costs of the section 68 challenges be assessed on the indemnity basis as Biotec's conduct had been “unreasonable to a high degree”. Mr Justice Cooke agreed with Siemens and ordered Biotec to pay Siemens' costs on the indemnity basis.
Neil Kitchener QC and Alexander Brown appeared for Siemens. They were instructed by Hill Hofstetter LLP.
You can view the full judgment here.
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