SCM Financial Overseas Ltd v Raga Establishment Ltd (Rev 1)

SCM Financial Overseas Ltd v Raga Establishment Ltd (Rev 1)

The arbitrators' refusal to defer their award pending the outcome of the Ukrainian SPFU action did not constitute a serious irregularity under section 68 of the Arbitration Act 1996. Although a Ukrainian court judgment was potentially important evidence, the arbitrators had wide procedural discretion and were entitled to proceed without deferral, especially given the lack of information about the likely duration of the Ukrainian proceedings. Their decision was not unfair and did not breach section 33 duties. Therefore, there was no irregularity and the challenge was dismissed.

Parties
Claimant: SCM Financial Overseas Ltd; Defendant: Raga Establishment Ltd
Jurisdiction
England and Wales
Judgment Date
03 May 2018
Procedural Posture
Arbitration Challenge / Judgment on Section 68 Application
Outcome
Application dismissed
Legal Topics
Serious Irregularity, Section 68 Arbitration Act 1996, Section 33 Arbitration Act 1996, Procedural Fairness, Stay of Proceedings, Delay in Arbitration, Foreign Law Evidence, Conflicting Judgments
Arbitration Commercial Law Serious Irregularity Section 68 Arbitration Act 1996 Section 33 Arbitration Act 1996 Procedural Fairness Stay of Proceedings Delay in Arbitration +2 more

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Parties

SCM Financial Overseas Ltd

Claimant

Raga Establishment Ltd

Defendant

Procedural Posture

Arbitration Challenge / Judgment on Section 68 Application

Legal Issues

  1. 1 Whether the arbitrators' refusal to defer their award pending the outcome of Ukrainian court proceedings constituted a serious irregularity under section 68 of the Arbitration Act 1996
  2. 2 Whether such refusal breached the arbitrators' duty under section 33 to act fairly and adopt suitable procedures
  3. 3 Whether any such irregularity caused or would cause substantial injustice to SCM

Ratio Decidendi

The arbitrators' refusal to defer their award pending the outcome of the Ukrainian SPFU action did not constitute a serious irregularity under section 68 of the Arbitration Act 1996. Although a Ukrainian court judgment was potentially important evidence, the arbitrators had wide procedural discretion and were entitled to proceed without deferral, especially given the lack of information about the likely duration of the Ukrainian proceedings. Their decision was not unfair and did not breach section 33 duties. Therefore, there was no irregularity and the challenge was dismissed.

Court Disposition

Application dismissed