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The Award Without a Unanimous Signature

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The Award Without a Unanimous Signature

An LCIA tribunal seated in London issues a final award in a sale-of-goods dispute. The award orders the seller to pay $12.4m plus compound interest at 8% and costs of £1.2m on an indemnity basis. The arbitration clause says: 'The unsuccessful party shall bear the reasonable costs of the successful party.' The tribunal's reasons run to 60 pages. One arbitrator, appointed by the seller, did not sign the award and issued a two-page dissent. The seller applies to the English High Court 20 days after the award, seeking to set aside under sections 67 and 68 of the Arbitration Act 1996, arguing that the tribunal exceeded its powers by awarding compound interest and indemnity costs and that the award is invalid because not all arbitrators signed. The buyer wants to enforce in New York and Dubai. The seller has assets in both jurisdictions.

1. Assess the merits of the sections 67 and 68 challenges, including the failure of one arbitrator to sign the award.

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Section 67 challenges the tribunal's substantive jurisdiction, not every legal error. The tribunal had jurisdiction over the parties and the sale-of-goods dispute. Compound interest and indemnity costs are remedies within the tribunal's procedural and remedial powers under the Arbitration Act 1996 unless the parties excluded them. The costs clause says 'reasonable costs', and the tribunal awarded indemnity costs; that is an argument about interpretation and discretion, not about whether the tribunal had jurisdiction. Such a complaint is more naturally an appeal on a point of law under section 69, for which permission is required and which is often excluded. It is unlikely to succeed as a section 67 challenge.

Section 68 requires a serious irregularity causing substantial injustice. The high threshold is not met merely because the tribunal preferred one party's case on interest or costs. The signature point is also weak. The Act requires an award to be signed by all the arbitrators or all those assenting to it. The seller's appointee did not sign and dissented; the other two signed and assented. A dissenting arbitrator's refusal to sign does not invalidate the award if the assenting arbitrators sign and the award records the dissent. The challenge is likely to fail on all grounds.

2. Compare the effect of the English challenge with enforcement in New York and Dubai. What should the buyer do?

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The English court is the court of the seat. A successful section 67 or 68 application could set aside or remit the award, but the threshold is high and the seller's grounds are weak. The buyer should oppose the challenge, seek security for the award, and ask the court to expedite. The buyer should also begin recognition and enforcement in New York and Dubai. Both are New York Convention jurisdictions. Enforcement courts have limited review: they do not rehear the merits. They may refuse enforcement on grounds such as lack of a valid arbitration agreement, lack of notice, inability to present one's case, excess of scope, irregular composition, or public policy, but those grounds are construed narrowly.

The pending English challenge may lead the enforcement court to adjourn enforcement and order security. The buyer should therefore identify assets, seek freezing or disclosure orders where available, and resist unnecessary adjournments. The buyer should not assume that a set-aside in London automatically defeats enforcement elsewhere, but it should recognise that Article V(1)(e) gives the enforcement court a discretion to refuse enforcement if the award has been set aside at the seat. The buyer's best strategy is to defend the London challenge vigorously while pressing for enforcement and security in the asset jurisdictions.

3. If the award is set aside in London on a procedural ground, can the buyer still enforce in New York? Explain the discretion under Article V.

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Article V(1)(e) of the New York Convention allows an enforcement court to refuse recognition or enforcement if the award has been set aside or suspended by a competent authority of the country in which, or under the law of which, the award was made. The word 'may' matters: the court has a discretion. Some courts have enforced awards set aside at the seat in exceptional circumstances, for example where the set-aside was based on a purely local procedural rule or where the foreign court's decision offended basic notions of justice. But comity usually leads the enforcement court to defer to the seat.

The buyer should therefore focus on the nature of the set-aside. If the English court set the award aside because of a minor procedural irregularity that caused no substantial injustice, the buyer can argue that enforcement should still be granted. If the set-aside reflects a fundamental defect in the tribunal's composition or the parties' right to be heard, enforcement is much less likely. The buyer should obtain a certified copy of the English judgment, the arbitration record and evidence of the procedural history. It should also consider whether the seller has waived objections or whether the set-aside is subject to appeal. The buyer should not rely on Article V(1)(e) alone; it should present the New York court with a full picture of the London proceedings.