Serious Irregularity: s.68 Arbitration Act 1996 - MHA Advisory Ltd v Mr Shiran Wynter

1. What is Section 68 of the Arbitration Act 1996?

Section 68 of the Arbitration Act 1996 allows a party to challenge an arbitral award for serious irregularity that has caused or will cause substantial injustice. Examples include a tribunal failing to deal with all issues or breaching its general duty under s.33. However, courts treat s.68 as a last resort, only available after all other remedies, such as a clarification request under s.57, have been exhausted.

2. What was the dispute and how did it reach arbitration?

MHA Advisory LLP, a firm of chartered accountants, claimed that former associate partner Mr Shiran Wynter breached restrictive covenants in a Members Agreement by soliciting clients and recruiting staff for his competing business, HWAEM.

Under the Agreement, disputes were to be resolved by arbitration. A key issue was whether the two-year post-termination restriction was reasonable. The arbitrator held that it was not ruling in the defendant’s favour.

3. Why was the award challenged under s.68?

MHA applied to set aside the award under s.68(2)(a) (breach of general duty) and s.68(2)(d) (failure to deal with all issues), alleging that the arbitrator declined to adjudicate on the key issue of reasonableness due to conflicting evidence, that the reasoning was inadequate, consisting of only two brief paragraphs and that this amounted to a serious procedural failure causing substantial injustice.

However, importantly, the claimant did not seek clarification under s.57 claiming the issue could not be resolved through clarification.

4. What was the decision of the Commercial Court?

The Commercial Court dismissed the application, holding that the arbitrator did make a determination on the reasonableness of the restriction.

Phrases used by the arbitrator like “I am unable to decide…” indicated the arbitrator was unpersuaded by the evidence, not simply that he refused to decide.

While the reasoning was concise, the tribunal had clearly engaged with the submissions and decided the issue. As Mr Justice Robin Knowles held, “a tribunal does not fail to deal with an issue merely because it expresses its reasoning shortly or concludes that the party with the burden of proof has not discharged it.”

The Court stressed that brevity is not a procedural error, and arbitrators are not required to explain every point or argument in detail.

5. Why did the Court criticise the failure to use s.57?

The Court was clear that MHA should have applied for clarification under s.57 if it considered the award ambiguous or insufficiently reasoned. It is well established that s.68 is only available when other remedies have been exhausted. By not using s.57, MHA’s application was deemed procedurally improper. The Court described the use of s.68 in this context as “abusive”.

6. Would the result differ under the Arbitration Act 2025?

Although the Arbitration Act 2025 modernises the 1996 Act and adds an express duty to give reasons, it retains the high threshold for s.68 and the requirement to seek clarification before turning to the courts. The outcome in this case would be unchanged under the 2025 Act.

This case reaffirms that Courts will not intervene unless there is a clear procedural failure resulting in substantial injustice, and only after the party has used all available remedies, including clarification under s.57.