UK: English Commercial Court Releases Updated S68 And S69 Statistics: Challenges Down, And The Hurdle For Success Remains High

In early February 2020, the Judiciary of England and Wales published the Commercial Court Users' Group Meeting Report – November 2019 ("2019 Report"). The 2019 Report provides information and statistics relating to challenges to arbitral awards on the grounds of serious procedural irregularity under s68 and appeals on a point of law under s69 Arbitration Act 1996 ("the Act") for the 2018-2019 court year (October 2018 – July 2019).

The last set of similar statistics were released by the Commercial Court in May 2018 with the publication of the Commercial Court Users' Group Meeting Report – March 2018 ("2018 Report"), which is discussed in more detail in our previous blog post here.

The latest statistics provide an interesting insight into the English courts' non-interventionist approach to challenges to arbitral awards.

The tables below set out the statistics for s68 and s69 applications in the 2019 Report for the court years 2018 – 2019 and 2017-2018:

The court year 2018 – 2019 saw significantly fewer challenges to awards on the grounds of serious procedural irregularity under s68 and also fewer appeals on points of law under s69 than the previous court year. The 2019 Report described the steep decrease in applications under s68 as "dramatic" (from 71 to 19). The 2018 – 2019 court year also saw a significant (though less sharp) decline in the number of appeals on a point of law under s69, with fewer than half the number reported for the 2017-2018 court year (a decrease from 87 to 39 appeals). The 2019 Report "expressed hope that parties were hearing the message that the hurdle for these applications is high".

Section 68 challenges

The 2019 Report was keen to stress that the number of successful applications under s68 for this period were "very few". Whilst the 2019 Report did not provide the precise number (or details) of the small number of successful challenges under s68, the successful applications referred to for the 2018-2019 court year include P v D [2019] EWHC 1277 (Comm) (see our previous blog post on this case here), where the serious procedural irregularity concerned failure to cross examine a witness on a key issue; and Fleetwood Wanderers Ltd v AFC Fylde Ltd [2018] EWHC 3318 (Comm) where an arbitrator pursuing his own inquiries amounted to a serious irregularity (see our blog post on this case here).

There has historically been a low success rate for s68 challenges, as shown by the previous statistics released in the 2018 Report, which are set out below:

Section 69 appeals

The 2019 Report demonstrates the continued difficulty of bringing an appeal on the basis that there has been an error of law, commenting that in relation to s69 challenges that have succeeded, "two did last year, and none this year". There have been a handful of successful s69 challenges in the last calendar year, including Nubiskrug Gmbh v Valla Yachts Ltd [2019] EWHC 1219 (Comm) where the tribunal wrongly found that the applicant (a party to a sale contract) had an obligation to make certain payments to the buyer, and Silverburn Shipping IOM Ltd v Ara Shipping Company LLC [2019] EWHC 376 (Comm) regarding the construction of an obligation in a contract which a tribunal had wrongly held not to be a condition.

The low success rate referred to in the 2019 Report is again in line with the 2018 Report which shows the historically low success rate for s69 appeals. The statistics from the 2018 Report are set out below:

Comment

These recently released statistics show a notable drop in challenges to arbitral awards under both s68 and s69. In the 2019 Report, the Commercial Court has attributed the decline in the number of challenges to potential applicants being deterred by the high hurdle for success.  It remains to be seen whether statistics for future years will confirm any long term trend in this respect. However, any reduction in the number of weak s68 and s69 challenges brought can only be welcome to arbitration users, given the time and costs involved in unsuccessful appeals.

The courts have repeatedly stated that an award will only be overturned in the most extreme cases, demonstrating the English courts' pro-arbitration position. The 2019 Report confirms the very high threshold for challenging an arbitral award under either s68 or s69 of the Act and is an important reminder that such challenges should not be undertaken lightly.

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