Thyssen Canada v. Mariana Maritime
In this case, the judge held that a party who had continued to take part in arbitration proceedings without making an objection that there had been an irregularity under s.68 (2)(g) of the Arbitration Act 1996 (award being obtained by fraud or being procured in a manner contrary to public policy – in this case, fabricated evidence) lost its right to raise that objection under s.73(1) of the Act*. Participating in proceedings, the judge held, includes the period between the hearing and publication of the award – even if no action is required of the parties in that interval
DMC Category Rating: Confirmed
This case note is based on an Article in the April 2005 Edition of the ‘Bulletin’, published by the Marine and Insurance teams at the international firm of lawyers, DLA Piper Rudnick Gray Cary. DLA Piper is an International Contributor to this website
An arbitration award was made on 16 January 2004 and collected by both parties jointly on 26 March 2004. On 29 June 2004, a second award was made on costs. The arbitrators found against the cargo owners, holding that the vessel was seaworthy and the owners were not liable for the cargo damage.
In July 2004, the cargo owners challenged the award under section 68 of the Arbitration Act 1996, claiming there had been a serious irregularity. They said that, shortly after the hearing finished on 6 November 2003, they obtained information that the actual cause of the fire was hot work (cutting and welding) on board the vessel, but that the supporting evidence only became available after the publication of the award.
Serious irregularity under section 68 includes "the award being obtained by fraud or the way in which it was procured being contrary to public policy". Where public policy is cited, it will normally be necessary to satisfy the court that some form of reprehensible or unconscionable conduct has taken place (Profilati v Paine Webber  1 LLR 715).
Any challenge, however, must be brought within 28 days of the date of the award (section 70(3)). In addition, under section 73, if a party "takes part, or continues to take part, in the proceedings" without making an objection that there has been an irregularity, it may not raise it later, unless, at the time, it did not know and could not with reasonable diligence have discovered the grounds for the objection. Taking part in the proceedings includes the period between the end of the hearing and the publication of the award (Profilati).
In the judge's view, there was no doubt that the claimants had continued to participate in the proceedings during the period between the hearing and the publication of the award and by taking up the award on 26 March 2004.
A last-ditch application to extend the 28-day time limit under s.70(3) also failed because the claimants had not acted reasonably in delaying. Consequently, they had lost their right to challenge the award.
*S.73(1) of the Arbitration Act 1996 reads:
"If a party to arbitral proceedings takes part, or
continues to take part, in the proceedings without making, either forthwith or
within such time as is allowed by the arbitration agreement or the tribunal or
by any provision of this Part, any objection –
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