The Judiciary of England and Wales, English Commercial Court Report 2024-2025 (published on 25 March 2026) shows Arbitration Applications are on the rise and accounted for around 30% of the claims issued in the Commercial Court.
The majority comprising s.68 (alleging procedural irregularities) and s.69 (appeals on points of law) challenges.
The statistics on the relevant challenges are interesting reading:
- S67 applications: out of 21 applications, 1 was successful, 5 were dismissed following a hearing, 2 were dismissed on paper, 1 was discontinued and 12 are pending a decision.
- S68 applications: out of 48 applications, 8 were dismissed at a hearing, 5 were dismissed on the paper, 4 were discontinued, 3 were transferred out, 2 were stayed and 26 are pending a decision.
- S69 applications: out of 73 applications, 18 had permission granted, 21 were refused permission, 0 successful appeals, 2 unsuccessful appeals, 1 transferred out, 4 were discontinued and 45 are still pending a permission decision.
Indus Powertech Inc v Echjay Industries Private Ltd [2026] EWHC 827 (Comm)
- Judge Sean O’Sullivan KC, sitting in the Commercial Court, handed down judgment on 10 April 2026 allowing a section 68 (2)(d) of the Arbitration Act 1996 (the “Act”) challenge made by the Tribunal under the ICC Rules.
- The relevant section of the Act provides:
“(2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant…
(d) failure of the tribunal to deal with all the issues that were put to it…”
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The award granted the Defendant (Echjay) lost profits of US$4.4 million arising from the Claimant’s breach of a non-compete clause in a supply agreement concluded between the parties.
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Indus asserted the Tribunal failed to address two essential issues of causation that arose in respect of Echjay’s claims, when awarding it damages for loss of profits in respect of the lost opportunity to manufacture certain component parts used for automobile manufacture.
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The two issues the Tribunal were alleged to have failed to address were:
(i) whether Echjay had any available manufacturing capacity during the relevant period and
(ii) whether any necessary validation process necessary to allow Echjay to manufacture the parts could have been completed within the two year period over which damages was awarded.
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The judge acknowledged the test for s.68 challenges was a high bar.
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In a very comprehensive judgment, he referred to relevant key case law addressing s.68 challenges and the four questions the Court needed to answer in s.68(2)(d) cases, namely:
(i) Whether the relevant point or argument was an issue;
(ii) Whether the issue was put to the Tribunal;
(iii) Whether the Tribunal failed to deal with it and
(iv) If so, whether the failure has or will cause substantial prejudice to the applicant.
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Regarding (iii) the judge made reference to paragraph 140 of Bryan J judgment in The Republic of Kazakhstan v World Wide Minerals Ltd [2025] EWHC 452 (Comm) when he asserted:
“140…Experienced tribunals do fail to deal with issues that are put to them. With the greatest of respect to the eminent arbitrators in this case, even Homer nods, and experience does not bring with it infallibility, and even the most knowledgeable and skilled arbitrators can fall into error or have lapses of judgment…”
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Further that it should be apparent to the parties in the award that indeed the issue had been determined.
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The judge was satisfied the question of capacity, namely whether Echjay had the capacity to manufacture the parts, was an issue before the Tribunal and it was put to it (para. 99); further that it had failed to deal with the issue (para.132) and the irregularity satisfied the substantial injustice test, as it had the potential to undermine Echjay’s claim (para. 133-135).
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Further, regarding the validation process or lead times and how quickly Echjay could start production, this was an issue and put to the Tribunal (para. 161). The judge found the Tribunal lost sight of the issue as they thought it was tied to the question of whether damages extended beyond two years (a post-termination restriction which was not enforceable under Indian law which applied to the Agreement concluded by the parties (para. 190)).
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The matter was remitted back to the Tribunal on the two issues it had failed to address, for their decision.
This case is a very recent reminder of the fallibility of even very experienced and knowledgeable arbitrators.
Stonegate Farmers Ltd v Chucks Farm Ltd [2026] EWHC 742 (Comm)
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The judgment of HHJ Russen KC (Sitting as a judge of the High Court) handed down on 27 February 2026 found there was a serious procedural irregularity in the award pursuant to s.68 of the Act, when the arbitrator found the existence of an implied term, on which he had not given a party an adequate opportunity to address him on and in circumstances where neither party had raised the term in their Statements of Case, skeleton arguments and/ or oral submissions.
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Chucks Farm (CF) contracted to supply eggs to Stonegate (the “Contract”). The Contract obliged CF to comply with the British Egg Industry Council's Code of Practice for Lion Eggs, under which a Lion Code registration number for CF was held by Stonegate as the registered subscriber.
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A dispute arose over whether the Contract had been extended beyond January 2024; CF disputed the extension and ceased supply.
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Before the sole arbitrator, CF as Claimant alleged that Stonegate as Respondent had breached the Contract by failing to release the Lion Code, but CF did not identify any express term—or formulate an implied term—in support of that obligation in the Contract.
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At the substantive hearing, Stonegate's counsel submitted that CF had failed to identify any contractual obligation that had been breached.
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Nonetheless, the sole arbitrator found the existence of an implied term requiring release of the Lion Code upon the contract's expiry (to give the Agreement business efficacy) and awarded CF damages for losses incurred in not being able to enter more expensive contracts with the benefit of Lion Code, which Stonegate had unlawfully retained.
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Stonegate made an application under section 57 of the Act for the arbitrator to explain and clarify the implied term found in his Award.
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CF responded to the application with a response headed ‘IMPLIED TERM’ and which included reference to the discretion of the Arbitrator under section 34 in relation to procedural and evidential matters and whether and to what extent the tribunal should take the initiative in ascertaining the fact and law (section 34 (2)(g) of the Act).
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The arbitrator gave Stonegate only one clear working day to address the law of implied terms—a deadline its counsel could not meet due to other commitments—and issued his section 57 decision without Stonegate's submissions (para 33).
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The arbitrator explained that the matter could not be allowed to “drift just because counsel is unavailable” and provided his decision. He rejected the section 57 application on the basis that there was no error requiring correction or clarification.
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Stonegate challenged the award under section 68 of the Act, alleging serious procedural irregularity on the basis that the arbitrator had breached his general duty under section 33(1)(a) by deciding the case on a point—the implied term—that neither party had pleaded or argued before the award was issued.
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CF opposed the s. 68 challenge, contending that the implied term had been sufficiently "in play" in the arbitration, so that there was no breach of the section 33(1)(a) duty; alternatively, if there was a breach, it did not give rise to a substantial injustice.
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HHJ Russen KC, sitting in the Circuit Commercial Court, found a breach of the general duty under section 33 of the Act will not, without more, sustain a successful challenge under section 68. Stonegate also had to show that the breach has caused, or will cause, them substantial injustice.
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Any resulting “substantial injustice” must be based on Stonegate’s case being reasonably arguable. There is no requirement to show that the arbitrator would have been persuaded to the contrary by the submissions Stonegate would have made, had it not been deprived of a reasonable opportunity to make them.
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He stated (para. 60):
“In my judgment, the points which emerge from the cases referred to by Mr Greenwood are sufficiently encapsulated by what Lawrence Collins LJ said in The Magdalena Oldendorff , at 47, namely:
“ …Today the question is whether the tribunal has given the parties a fair opportunity of addressing them on all issues material to their intended decision, or whether there has been a denial of a fair hearing….section 68 is not to be used simply because one of the parties is dissatisfied with the result.”
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He found the Implied Term, or any implied term of the Agreement, was not "in play" in arguments between the parties before the Arbitrator decided to articulate it.
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CF had never in their statements of case formulated an implied term, to be read into the Agreement with effect from 21 September 2020, that would support a claim for damages against Stonegate in the event of them failing to establish the Agreement continued beyond January 2024.
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There is a distinction between a new point triggering the need (under section 33(1)(a)) for each party to be given a “reasonable opportunity” to address it and a point which was “in play” in the arbitration (which will usually provide the parties with sufficient opportunity of that nature).
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As a matter of natural justice, if an arbitrator thinks the parties have “missed the real point,” the arbitrator is obliged to put the point to them, so that they have an opportunity to deal with it.
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If a term is to be implied on the basis of business efficacy, it must be reasonable and equitable, capable of being expressed with clarity and precision, required in order to give commercial or practical coherence to the contract, so obvious that it goes without the need for the parties to express it, and not inconsistent with any express term (Candey Ltd v Boseh [2022] EWCA Civ 1103).
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HHJ Russen KC’s review of the factual record showed that the implied term was not “in play” in submissions or oral argument prior to the award and “came out of the blue” in that award.
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Unlike the arbitrator, the judge did not consider that the implied term was so obvious that there could be no reasonable argument about it. He said that, before making the award, the “arbitrator should have raised the point with the parties … so that they had the chance to comment on the reflection of his legal analysis behind the Implied Term”.
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The judge concluded that Stonegate were denied a reasonable opportunity of putting their case against the implied term to the arbitrator, that this was a breach of section 33 – the core duty to act fairly and impartially between the parties - and that this was a breach that resulted in substantial injustice being faced by Stonegate.
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The award was remitted to the arbitrator for reconsideration pursuant to section 68(3) of the Act.
The judgment provides important guidance for litigating parties and arbitrators in relation to section 68 applications and an arbitrator’s duty of fairness under section 33 of the Act.