Celtic Bioenergy v Knowles – Arbitrator’s award ordered to be reconsidered because of Defendant’s fraudulent misrepresentation

Last week, the Technology and Construction Court (TCC) allowed the Claimant’s application, under section 68(2)(g) of the Arbitration Act, for an arbitrator’s award to be reconsidered because of serious irregularity, as it was obtained by fraud on the part of the Defendant.

The Defendant had failed to disclose the existence of correspondence chasing a third party for sums allegedly due from the Claimant, and therefore misled the arbitrator into making a favourable declaration.  Following the award, the Claimant discovered the existence of the correspondence, which contradicted the arbitrator’s findings.  The Court concluded that the failure to draw this key information to the arbitrator’s attention was deliberate and fraudulent, and therefore ordered the challenged parts of the award to be reconsidered by the arbitrator in the light of the full facts.

This case shows that Courts are becoming more willing to intervene where parties act dishonestly, and acts as a reminder to test opposing parties’ evidence as far as reasonably possible.

If you would like to discuss this further, please contact Michael Downes on 0113 227 0291 or by email to michael.downes@gordonsllp.com.