Table of Contents
In Short
- Section 68 of the Arbitration Act 1996 allows a challenge to an arbitral award based on serious irregularity and substantial injustice.
- The provision applies to the arbitration process, not the correctness of the award.
- There are strict time limits and procedural steps before bringing a Section 68 challenge.
Tips for Businesses
If you are considering challenging an arbitral award, review Section 68 requirements carefully. Seek legal advice to ensure procedural compliance and understand whether the grounds of serious irregularity apply to your case.
If you experience a commercial dispute when conducting your business, you must decide on a method to resolve this. Avoiding litigation in the commercial court and determining your business disagreement by choosing an alternative dispute resolution (ADR) method is wise. One ADR method you may decide on is arbitration. This is where an expert third party listens to the arguments between you and the other party and makes a temporarily binding decision. If you choose arbitration for your commercial dispute, you should know the English Arbitration Act 1996 rules. One is Section 68, which relates to challenging the arbitral award. This article will, therefore, explain the legal guidelines for Section 68 of the Arbitration Act.
What is the Purpose of Section 68 of the Arbitration Act?
Section 68 of the English Arbitration Act 1996 allows a party to arbitration to challenge the arbitration award on the grounds of:
- a serious irregularity occurring; and
- that this will or has caused the party challenging the award a ‘substantial injustice’.
Both of the above must be present to succeed. This is the dual requirement of Section 68 of the Act.
The serious irregularity must affect either the:
- tribunal;
- proceedings; or
- award.
It must also fall under one of the areas for serious irregularity as outlined in the Act.
Section 68 of the Arbitration Act applies to all arbitration proceedings. This means that if parties to arbitration cannot agree, the provision will not apply.
What are the Legal Rules Concerning Section 68 of the Arbitration Act?
The Arbitration Act details many rules relating to Section 68, and we look at some of these below. If you wish to challenge an arbitral award, you should get advice from a disputes solicitor.
Meaning of Award
An essential legal rule to be aware of in Section 68 of the Act is the award’s meaning. The Act does not define this, but previous arbitral challenges have defined it. Therefore, it means more than a decision referred to as an ‘arbitral award’ and can include decisions not referred to as this.
The court determines that a decision can be challenged through Section 68 by looking at the substance of the decision. If the tribunal does not decide on a substantive claim, the court is unlikely to consider the decision one that can be challenged. For example, if you try to challenge a tribunal’s decision not to order security costs and strike out a claim, this has been known not to be allowed under Section 68 of the Act.
Time Limit
There is a strict time limit if you wish to challenge your arbitral award on a serious irregularity. In addition, you must make your challenge as soon as you become aware that a severe irregularity has occurred. If not, you can lose the legal right to challenge the arbitral award on this basis.
Your legal representative can advise you on the details of the time limit.
This fact sheet outlines how your business can manage a dispute.
Procedural Restrictions
The procedural rules are a further legal guideline when challenging an arbitral award under Section 68 of the Act. These state that before you challenge the award through this provision, you must have exhausted other avenues to challenge the award. This includes, for example:
- any arbitral process of review;
- any arbitral process of appeal; and
- a tribunal’s powers to change the award or issue an additional one.
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Key Takeaways
Engaging in the arbitral process may go differently than you wish, and you may try to challenge it. Section 68 of the Arbitration Act 1996 allows you to challenge an arbitral award based on a serious irregularity that falls into one of the categories listed in the Act. However, this must occur when the decision will cause substantial injustice to you. Many legal rules affect the application of Section 68, and this article has examined some of them. For example, parties to arbitral proceedings cannot opt out of Section 68, and failings in the process relate to the arbitrator’s conduct rather than the decision made. There are also important rules concerning the meaning of an award, as well as time limits and procedural restrictions.
If you need help understanding the legal guidelines of Section 68 of the Arbitration Act, our experienced disputes and litigation solicitors can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. So call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Section 68 of the Arbitration Act 1996 provides a way to challenge an arbitral award based on serious irregularity.
The dual requirements of Section 68 of the Act relate to the need for this to be a serious irregularity and for it to cause substantial injustice to the claimant.
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