Section 68 serious irregularity appeal - The "Canary"

My recent case note and commentary on the High Court decision in Eagle Bulk Pte Ltd v Traxys North America LLC (the "Canary") can be found in the Arbitration and Jurisdiction section of Online DMC (www.onlinedmc.co.uk).

The case concerned a challenge by Owners against the Tribunal's decision that the cause of delays in discharge of cargo was water ingress via leaking and defective butterfly valves in the Vessel's bilge system and that Owners were liable for the resulting cargo shortage. The challenge was on the basis of claimed serious irregularity pursuant to sections 68(2)(a) and (d) of the Arbitration Act 1996.

The Court dismissed Owners' challenge, holding that there was no serious irregularity and that Owners' challenge under s.68(2)(a) was, in effect, an attempt to challenge a finding of fact and, in the case of s.68(d), that the Tribunal had dealt with the issue which needed to be decided.

The decision is noteworthy for the Court's detailed analysis of the high threshold which a party must meet in order to bring themselves within the scope of s.68(2). It makes clear that s.68(2) is designed as a longstop, only available in extreme cases where a tribunal has gone so far wrong in the conduct of the arbitration that justice calls out for it to be corrected. It reinforces the fact that s.68 cannot be used as a means of circumventing a tribunal's findings of fact and that a tribunal has considerable latitude when assessing the evidence and putting its own interpretation on that evidence, notwithstanding the arguments actually put forward by the parties in the arbitration.

It also makes clear if a tribunal has dealt with an issue in any way (no matter how well or badly), s.68(2)(d) will not apply. In reaching its decision on whether there was a failure to deal with an issue for the purpose of s.68(2)(d), the Court also set out several helpful guidelines on which I comment in the Case Note.

However, it should be borne in mind that whilst the Court made clear the high threshold which must be met for a successful s.68 challenge, it is not impossible to meet that threshold. Indeed, only one month after the judgment in the "CANARY", the High Court upheld a challenge on the grounds of serious irregularity pursuant to s.68(2)(d) in Echjay Industries Private Limited [2026] EWHC 827 (Comm). A summary of that decision can be found in the Hill Dickinson article at https://lnkd.in/e47duWcc