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Contract Arbitrators’ Factual Findings Accorded Judicial Respect

Container PortThe decisions of contract arbitrators are accorded due respect by the courts and only in exceptional cases will judges go behind their findings of fact. That point could not have been more clearly made than in one High Court case concerning an allegedly defective shipment of fertiliser.

The buyers of 4,500 metric tonnes of fertiliser had paid more than Euros 600,000 to the sellers before the product was shipped to a port in Romania. The buyers claimed that, on arrival, the cargo was in poor condition and asked the sellers to take it back and reimburse them. After the latter declined, the dispute was referred to a panel of three arbitrators in London.

In a preliminary award, the arbitrators found, amongst other things, that the buyers had lost the right to reject the cargo and were confined to claiming damages from the sellers in respect of alleged breach of specification. The buyers challenged that decision under Section 68 of the Arbitration Act 1996 on the basis that it was infected by serious irregularity.

In dismissing the claim, however, the Court found that the buyers’ argument that the arbitrators had not acted fairly in the treatment of their witness evidence was wholly impermissible. That evidence had not been overlooked and it was for the arbitrators, not the Court, to evaluate it. There was nothing exceptional about the case and an examination of the material before the arbitrators illustrated how inappropriate the challenge was. Other criticisms of the award also fell on fallow ground.