One of the benefits of a well run arbitration is that it will usually produce a quicker result for the parties than formal litigation through national courts. Ensuring that your Tribunal is comprised of one or more experienced arbitrators is one key element in ensuring that the process is managed efficiently.
One of the key points to remember when selecting your arbitrator is whether they are likely to have sufficient time to devote to the case. Many of the most high profile arbitrators are in demand and consequently may have numerous appointments at any one time. The risk of course is that this leads to arbitrators not having sufficient time to properly devote to the case or to the arbitration becoming protracted through lack of availability.
What then is the position when the delay is not caused by one of the parties but by the arbitrator or Tribunal?
This issue was dealt with in the above case in which a Judgment of the Commercial Court was handed down on 24 June.
The case concerned damage allegedly caused to a multi-purpose research vessel purchased by TMI from SDG. The damage occurred prior to the vessel being delivered to TMI but only became apparent some years later necessitating significant repair work. TMI held SDG responsible and claimed damages consisting of Euro 1,195,444.10 in respect of inspections and remedial work and Euro 856,000 in respect of loss of hire. The contract incorporated the LMAA arbitration rules and the parties appointed a single arbitrator to decide their dispute.
Following a three day arbitration in September 2013 nothing was heard from the arbitrator for 5 months. Further repeated delays then followed before an Award was finally published in September 2014.
It was common ground between the parties that this delay was extensive and inordinate. The LMAA rules recommend that Awards are normally made available within not more than 6 weeks from the close of proceedings.
In the Award the arbitrator found conclusively for TMI. SDG appealed to the Court under s.68 of the Arbitration Act 1996 (“serious irregularity”).
The Judge found that whilst inordinate delay in publishing an Award was capable of amounting to serious irregularity because it was a breach of the arbitrator’s general duty under s.33 (one strand of which was avoiding unnecessary delay) that breach or irregularity had to have caused or will cause substantial injustice (as required by s.68 (2)).
In order to satisfy that test of serious injustice SDG would need to show that but for the inordinate delay the arbitrator might well have reached a different conclusion more favourable to SDG. The Judge consequently felt that it would be impossible for SDG to satisfy that test without also demonstrating that there was a failure to deal with all of the relevant issues under s.68 (2) (d). On the facts the Judge did not think this was satisfied.
The Judge concluded that if the Award is otherwise unimpeachable and has dealt with all the issues, it makes no difference whether it was produced a month or twelve months after the hearing, since however long the Award has taken to produce, SDG could not show that it had caused substantial injustice. The appeal was dismissed.