Arbitration is supposed to be a swift and cost-effective method of settling commercial disputes. However, it proved anything but in one striking case after an arbitrator took more than a year to make up his mind following a three-day hearing.
A shipbuilding company was in dispute with a client in respect of damage caused to the engines of a multi-purpose research vessel. The company denied that it was responsible for the loss. However, the arbitrator found conclusively in favour of its client and the company was ordered to pay more than €2 million.
In challenging the arbitrator’s award, the company pointed out that it had taken him a total of 376 days to reach his conclusions. The apologetic arbitrator had repeatedly put off issuing his decision and the company argued that the inordinate delay amounted to a serious irregularity in the arbitration process.
The High Court described the lapse of so long a period between hearing and award as extremely regrettable. However, in rejecting the company’s arguments, it found that the delay alone was insufficient to establish a serious irregularity within the meaning of the Arbitration Act 1996. The arbitrator had in the fullness of time issued a reasoned 30-page decision, had dealt with all the issues satisfactorily and his award was unimpeachable. There was thus no basis on which the company could argue that it had suffered serious injustice as a result of the delay.