UMS Holding Ltd & Ors v Great Station Properties SA & Anor

By an Award dated 9 May 2016 an arbitration tribunal (“the Tribunal”), consisting of Sir Gordon Langley, Sir David Steel and the Hon. L. Yves Fortier PC, CC, QC, ordered the Grigorishin Respondents to pay US$55.8m. to the Claimants in connection with (Footnote: ¹) a Joint Venture Agreement and also US$250m. as the price payable in respect of the exercise of a “put option” by the Claimants.

By this arbitration application the Grigorishin Respondents seek to have the award set aside pursuant to section 68 of the Arbitration Act 1996. They allege no less than 16 serious irregularities grouped under 5 headings.

The alleged serious irregularities are said to be either within section 68(2)(a), a breach of the Tribunal’s duty to act fairly pursuant to section 33 of the Act, or within section 68(2)(d), a failure by the Tribunal to deal with the issues that were put to it.

Notwithstanding that the Grigorishin Respondents are the Applicants in this section 68 application I shall refer to them as the Grigorishin Respondents. I shall refer to the Claimants in the arbitration as the Claimants.

The Claimants are two companies beneficially owned by Mr. Vladimir Lukyanenko, a citizen of Russia and Ukraine. The Grigorishin Respondents are three companies beneficially owned by Mr. Konstantin Grigorishin who was born in Ukraine where he lived for 16 years before moving to Russia.

Stremvol Holdings Limited is a Cypriot company owned as to 51% by one of the Grigorishin Respondents and as to 49% by the Claimants. It is the joint venture vehicle through which the Claimants and the Grigorishin Respondents hold interests in a number of companies including NPO, a company based in Ukraine and involved in the manufacture of gas compressors.

The commercial relationship between Mr. Lukyanenko and Mr. Grigorishin broke down in 2013.

There were in essence two disputes, one relating to the Joint Venture Agreement (“the JVA”) and the other relating to an Option Agreement. The Claimants alleged that the Grigorishin Respondents perpetrated an “Illicit Scheme” whereby they covertly diverted profits and opportunities away from NPO to two companies connected to the Grigorishin Respondents, namely, Technoimport and ES LLC. This was said to be in breach of the JVA, which breach was said to have caused damage to the Claimants in the sum of US$55.8m. The Claimants also alleged that they had been entitled to exercise a Put Option under the Option Agreement relating to their shares in Stremvol and so were entitled to a sum of US$250m. in return for the sale of those shares. The Grigorishin Respondents denied that there was any Illicit Scheme and, with regard to the Option Agreement, alleged that the business of Stremvol had been conducted oppressively by the Claimants such as unfairly to prejudice the shareholders of Stremvol with the result that under section 202 of the Cyprus Companies Law they were entitled to an order that the Claimants sell their shares in Stremvol at the market price, which I was told was no more than $4m.

Arbitration was commenced in 2013. After pleadings and evidence had been exchanged there was a hearing before the Tribunal from 14-25 September 2015 during which factual and expert evidence was adduced by the parties. Before the Tribunal there were (according to Mr. Sciannaca of Hogan Lovells, the solicitors acting for the Grigorishin Respondents) “many dozens of volumes, comprising tens of thousands of pages”. At the end of the hearing the Tribunal requested a List of Issues to be agreed. The parties prepared such a list and exchanged lengthy written closing submissions on 13 November 2015. Reply submissions were exchanged on 4 December 2015. On 14 December 2015 the parties informed the Tribunal that there was no need for a further oral hearing. The Tribunal informed the parties on 11 January 2016 that it did not require an oral hearing but that it did require further written submissions concerning a recent Supreme Court decision on the subject of implied terms. Those submissions were provided and on 9 May 2016 the Tribunal published its Award. The Claimants’ claims succeeded with the result that the Grigorishin Respondents were ordered to pay $55.8m. in respect of the JVA claim and $250m. in respect of the Option claim. The Award is a substantial document which sets out the Tribunal’s reasons for making the Award.

On 6 June 2016 the Grigorishin Respondents issued an arbitration claim form seeking an order setting aside the Award on the grounds of one or more serious irregularities within the meaning of section 68 of the Arbitration Act 1996.

The Grounds of Challenge are set out over 24 pages and 135 paragraphs and allege many serious irregularities grouped under 5 headings, grounds A-E. They are supported by 84 pages and 362 paragraphs of evidence from Mr. Sciannaca. Such was the breadth of the challenge that the hearing before this court lasted 4 days. Paragraph 13 of the Grounds of Challenge said this:

“The Grigorishin Respondents’ challenge to the Award is based in significant part upon the Tribunal stating findings, and conclusions based upon those findings, without making any attempt to reconcile them with the countervailing evidence and arguments put forward by the Grigorishin Respondents. Repeatedly (and not just in relation to isolated points) evidence favourable to the Grigorishin Respondents’ case, on a multitude of issues, was simply not mentioned anywhere in the Award. Moreover, with the exception of Mr. Grigorishin, none of the Grigorishin Respondents’ witnesses was specifically commented upon with regard to their credibility or quality of their evidence, and despite numerous central issues in the arbitration turning on competing expert evidence, the Award makes no mention at all of one of the Grigorishin Respondents’ expert witnesses, his two reports or the objective documentary evidence exhibited to those reports. ”

This description of a major part of the challenge is surprising. It is the conventional view that an arbitration tribunal does not have to refer to the competing evidence and arguments in its award. What it must do is decide the essential issues in the case and, pursuant to section 52(4) of the Arbitration Act 1996, give the reasons for the award. Recognising this, Mr. Brisby QC (who did not appear in the arbitration) put the case of the Grigorishin Respondents in this way. He said that this was an exceptional case. He said that such was the “wholesale failure” of the Tribunal to consider “large chunks of crucial evidence on central points of the case” that there had been a failure to act fairly as the Tribunal was required to do pursuant to section 33 of the Arbitration Act 1996.

In the light of the nature of this part of the Grigorishin Respondents’ challenge to the Award it is necessary to consider the limits to a section 68 challenge. They have been described in several cases since the coming into force of the Arbitration Act 1996 but, having regard to the submission made by Mr. Brisby, it is necessary to consider them again. The relevant parts of section 68 provide as follows:

“(1)

A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award. …………

(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-

(a)

failure by the tribunal to comply with section 33 (general duty of the tribunal);

…..

(d)

failure by the tribunal to deal with all the issues that were put to it;

……

(i)

any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award.”

In Lesotho Highlands Development Authority v Impregilo SpA and others [2006] 1 AC 221 the House of Lords considered a challenge to an award pursuant to section 68 of the Arbitration Act 1996. Lord Steyn referred to the “radical nature of the alteration of our arbitration law brought about by section 68 of the 1996 Act” (see paragraph 26 of the judgment). The Act had been preceded by “persistent criticism” about the excessive reach of the powers of intervention by the court under the Arbitration Act 1950. A “major purpose” of the 1996 Act was to “reduce drastically the extent of intervention of courts in the arbitral process.” To that end the Departmental Advisory Committee on Arbitration Law (“the DAC”) had described section 68 as a “longstop, only available in extreme cases where the tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected”. The court should only be able to correct a serious failure to comply with “due process” (see paragraph 27). When commenting upon section 68 Lord Steyn noted that the irregularity relied upon must be within the closed list of categories set out in paragraphs (a) to (i) (see paragraph 29). He stated that “nowhere in section 68 is there any hint that a failure by the tribunal to arrive at the correct decision could afford a ground for challenge”.

Lesotho did not consider challenges to an award based upon an allegation that the tribunal had failed to consider a piece of evidence or had given insufficient weight to a piece of evidence. But the reach and limits of section 68 in that context have been considered in a number of first instance decisions.

In World Trade Corporation v Czarnikow Sugar [2005] 1 Lloyd’s Reports 422 it was alleged that a party had put forward particular features of the evidence in witness statements and documents but that in arriving at their conclusions of fact the arbitrators had not considered the documents or other written evidence placed before them or had not attached sufficient weight to such documents or evidence. Colman J. considered the ambit of section 68(2)(d), “a failure by the tribunal to deal with all the issues that were put to it”. At paragraph 17 he said that that provision was “designed to cover those issues the determination of which is essential to a decision on the claims or specific defences raised in the course of the reference.” After setting out the criticism advanced in that case the judge said at paragraphs 31 and 45:

“31.

These criticisms are essentially to the effect that the arbitrators failed to take into account evidence that was to be found in the witness statements and documents put before them and accorded undue weight to other evidence before them. The question that the arbitrators had to decide was what was the market price of the sugar at the relevant time. The dispute on the facts was as to whether and if so to what extent Czarnikow had proved that the market price was below the contract price. That went to the issue whether Czarnikow had suffered any loss caused by WTC's repudiatory breach of contract. In order to resolve that issue the arbitrators had to decide whether in selling the two parcels of sugar at the prices obtained, Czarnikow had failed to mitigate its loss and had sold below the true market price. However, whether the arbitrators accorded to any particular evidence more weight or less weight or no weight at all was not an "issue" within the meaning of section 68(2)(d). It was merely the process of resolving the issue of what loss, if any, had been suffered by Czarnikow.”

……………..

45.

On analysis, these criticisms are all directed to asserting that the arbitrators misdirected themselves on the facts or drew from the primary facts unjustified inferences. Those facts are said to be material to an "issue", namely what were the terms of the oral agreement. However, each stage of the evidential analysis directed to the resolution of that issue was not an "issue" within Section 68(2)(d). It was merely a step in the evaluation of the evidence. That the arbitrators failed to take into account evidence or a document said to be relevant to that issue is not properly to be regarded as a failure to deal with an issue. It is, in truth, a criticism which goes no further than asserting that the arbitrators made mistakes in their findings of primary fact or drew from the primary facts unsustainable inferences.”

In Arduina v Celtic Resources Holdings PLC [2006] EWHC 3155 (Comm) Toulson J. considered a section 68 challenge in which it was said that there was a “total lack of evidential support” for certain conclusions. The Judge was unimpressed by these allegations but said this, at paragraph 46:

“The assertion that the arbitrator failed to take any or proper account (Footnote: ²) of the evidence could, in an exceptional case, give rise to a challenge under section 68, based on the general duty of an arbitrator under section 33 if, for example, an arbitrator genuinely overlooked evidence that really mattered, or got the wrong end of the stick in misunderstanding it. But there is all the difference in the world between such cases and an arbitrator evaluating evidence but reaching factual conclusions on it (as will happen in most arbitrations) which one party does not like. That cannot be the basis of a complaint under section 68.”

In Schwebel v Schwebel [2011] 2 AER (Comm) 1048 Aikenhead J. said at paragraph 23:

“I draw from these cases and from s.68 itself the following general conclusions. (a) Arbitrators and awards cannot be criticised simply because they do not address each and every item of contentious or even non-contentious evidence. Omission to address particular items of evidence is not necessarily in itself a serious irregularity, let alone one which will give rise to serious injustice. (b) Arbitrators who are required to give reasons in their awards do not have to list all the arguments or items of evidence as advanced which they accept and which they reject. They should identify usually the primary evidence which they do find compelling where the case depends upon factual findings because that will be part of the reasoning. (c) Great care and circumspection should be exercised by the court to identify cases which genuinely give rise to a serious irregularity and those which essentially reflect a losing party’s upset that its evidence was not accepted or that inferences were made against it or for the other party. There will be no serious irregularity simply because the claimant in the court proceedings considers that the tribunal failed to arrive at the right decision, factual or legal. (d) It is wrong for the court to allow a party to use s.68 to challenge the decision on a question of fact. (e) It will be a very rare and exceptional case for the court to interfere pursuant to s 68 on the grounds that the arbitrator reached the wrong findings of fact, should have reached different factual conclusions, given greater weight to some evidence or failed to explain why weight or importance was not given to some evidence. It will be an even rarer case for the court to find that even if there was some serious irregularity with regard to a failure to take into account evidence that there was substantial injustice, which is of course a precondition to the involvement of the court under s.68, along with the need for there to be a serious irregularity. ”

It is to be noted that neither Toulson J. nor Akenhead J. particularly described or explained the sort of exceptional case where a section 68 challenge might be possible on the grounds that the tribunal has overlooked, or not given weight to, evidence.

In Petrochemical Industries v Dow Chemical [2012] 2 Lloyd’s Reports 691 at paragraph 36 Andrew Smith J. said that his own view was that an award could not be challenged on the grounds that the tribunal had overlooked evidence but felt that he should follow the approach of Toulson J. and Akenhead J. But, like Toulson J. and Akenhead J. he rejected the criticism on the facts; see paragraph 37.

The matter was then considered by Flaux J. in Sonotrach v Statoil [2014] 2 Lloyd’s Reports 252. In that case a challenge was made on the basis that the tribunal had overlooked a crucial piece of evidence and had mischaracterised the evidence of two witnesses. Flaux J. said at paragraph 11 that “section 68 is about whether there has been due process, not whether the tribunal “got it right”. He said that a complaint that the tribunal reached the wrong result is not a matter susceptible of challenge under section 68. He referred to the previous decisions of Colman J., Toulson J., Akenhead J. and Andrew Smith J. to which I have referred. With regard to the approach of Andrew Smith J. who felt constrained to follow the approach of Toulson J. and Akenhead J. he said this at paragraph 18:

“I have to say that I am not sure I should feel similarly constrained. The passage in the judgment of Toulson J is clearly obiter since his conclusion (and thus the ratio of the decision) was that the applicant was engaged in an impermissible attack on the tribunal’s findings of fact, so that the application under section 68 failed. Toulson J does not specify what sort of exceptional case he had in mind. I can quite see that in a case, for example, of an agreed or admitted piece of evidence which was ignored or overlooked, it might be possible to say that the tribunal was in breach of its duty under section 33, so that section 68(2)(a) was engaged. However, beyond that, it seems to me that, as the present case demonstrates, the contention that the tribunal has overlooked or misunderstood particular evidence necessarily involves interference with the evaluation of the evidence by the tribunal. Whilst the applicant may contend, as in the present case, that the tribunal has overlooked a critical piece of evidence, the tribunal may not have regarded it as critical and thus may have decided that it was not worth referring to in an Award which necessarily cannot set out every piece of evidence in the case. I do not see how the court can determine whether the tribunal has overlooked evidence without an analysis of the tribunal’s evaluation of the evidence, which is not a permissible exercise under section 68: see the passage in the judgment of Colman J cited above and [49]-[50] in my own recent judgment in Primera Maritime (Hellas) Limited v Jiangsu Eastern Heavy Industry Co Ltd [2013] EWHC 3066 (Comm); [2014] 1 Lloyd’s Rep 255 at 264-5, both cases under section 68(2)(d), but where the prohibition against attacking the findings of fact of the tribunal must apply whichever head of section 68(2) is relied upon.”

In the event Flaux J. did not consider the tribunal had overlooked or mischaracterised evidence and so it was not necessary to decide whether the approach of Toulson J. was correct.

In Brockton Capital LLP v Atlantic-Pacific Capital Inc [2014] EWHC 1459 (Comm) Field J. said that the duty to act fairly is distinct from the autonomous power of the arbitrators to make findings of fact and it will only be in the most exceptional case, if ever, that a failure to refer to a particular part of the evidence will constitute a serious irregularity within section 68.

In New Age Alzarooni 2 Limited and another v Range Energy Natural Resources [2014] EWHC 4358 (Comm) Cooke J. considered the scope of challenge available pursuant to section 68. At paragraph 14 he said this:

“The DAC Report, to which many of the relevant authorities refer, stated that it was “only in those cases where it could be said that what had happened was so far removed from what could reasonably be expected of the arbitral process” that the court would be expected to take action. Section 68 was only to be available in extreme cases where the Tribunal had gone so far wrong in its conduct of the arbitration that justice called for it to be corrected. None of the grounds in Section 68 which are relied on by New Age 2 and Black Gold allow for a challenge to an arbitration award on the basis of the Tribunal’s view of the evidence, the weight it accorded to any evidence, its findings of fact or its conclusions of law. Moreover, the assertion that a decision is contrary to the weight of the evidence could not begin to meet the requirements of Section 68 (2)(a) since that would be no more than a challenge to the Arbitrators’ findings of fact. A failure to refer to any particular piece of evidence in the Award or Reasons is likewise no basis for attacking an award or contending that the evidence in question was not taken into account. Any contention that the Tribunal had overlooked or misunderstood any particular piece of evidence would necessarily involve a review and evaluation of all the evidence considered by the Tribunal which would be an unjustified and unauthorised interference with the function of the Arbitrators and the agreement of the parties to refer their dispute to them for determination.”

In paragraph 62 Cooke J. further said this:

“In the Particulars of Claim, New Age 2 and Black Gold contend that the Tribunal followed an unfair procedure at the arbitration by failing to take into account evidence which was highly relevant and uncontested. It is accepted that a failure to refer to a piece of evidence in an award is not a ground for challenge under section 68 but reliance is placed on a dictum of Flaux J at paragraph 18 of his judgment in Statoil v Sonatrach [2014] 2 EWHC 875 (Comm); [2014] 2 All ER (Comm) 857, where he said that it could be a breach of section 33 of the Act to ignore or overlook an agreed or admitted piece of evidence. He went on to say, however, that the contention that the tribunal has overlooked or misunderstood particular evidence necessarily involves interference with the evaluation of evidence by the tribunal, which is not permissible, as I have already stated earlier in this judgment. If the tribunal admitted that it had overlooked a matter then, depending on its significance, section 68(2)(i) might apply, but here there is no such admission and there is no basis for complaint on a proper reading of the award and appreciation of the situations to which section 68 applies – see paragraph 14 of this judgment.”

On the same day that Cooke J. delivered that judgment Akenhead J. gave judgment in Secretary of State for the Home Department v Raytheon Systems Limited [2014] EWHC 4375 (TCC). Akenhead J. (at paragraph 33) set out a summary of the law and practice relating to section 68. He noted (at sub-paragraph vi) that if the tribunal has dealt with an issue in any way that is the end of the inquiry. It does not matter whether the tribunal has dealt with the issue well, badly or indifferently. He further noted (at sub-paragraph ix) that there was no failure to deal with an issue where arbitrators have misdirected themselves on the facts or drew from the primary facts unjustified inferences.

In A v B [2017] EWHC 596 (Comm) Christopher Butcher QC (sitting as a deputy High Court judge) stated at paragraph 20 that the reasoning and approach of Flaux J. in Sonatrach was correct. He also referred to the decision of Cooke J. in New Age and said at paragraph 25:

“In the light of the terms of the Arbitration Act 1996, and of the above guidance, I consider that the challenge to the Partial Award in the present case on the basis that the Tribunal had not acted fairly in its treatment of the Buyers’ factual witness evidence is wholly impermissible.”

Having considered these authorities my understanding of the law regarding allegations that an arbitral tribunal has overlooked evidence is as follows. A contention that the tribunal has ignored or failed to have regard to evidence relied upon by one of the parties cannot be the subject matter of an allegation of a serious irregularity within section 68(2)(a) or (d), for several reasons. First, the tribunal’s duty is to decide the essential issues put to it for decision and to give its reasons for doing so. It does not have to deal in its reasons with each point made by a party in relation to those essential issues or refer to all the relevant evidence. Second, the assessment and evaluation of such evidence is a matter exclusively for the tribunal. The court has no role in that regard. Third, where a tribunal in its reasons has not referred to a piece of evidence which one party says is crucial the tribunal may have (i) considered it, but regarded it as not determinative, (ii) considered it, but assessed it as coming from an unreliable source, (iii) considered it, but misunderstood it or (iv) overlooked it. There may be other possibilities. Were the court to seek to determine why the tribunal had not referred to certain evidence it would have to consider the entirety of the evidence which was before the tribunal and which was relevant to the decision under challenge. Such evidence would include not only documentary evidence but also the transcripts of factual and expert evidence. Such an enquiry (in addition to being lengthy, as it certainly would be in the present case) would be an impermissible exercise for the court to undertake because it is the tribunal, not the court, that assesses the evidence adduced by the parties. Further, for the court to decide that the tribunal had overlooked certain evidence the court would have to conclude that the only inference to be drawn from the tribunal’s failure to mention such evidence was that the tribunal had overlooked it. But the tribunal may have had a different view of the importance, relevance or reliability of the evidence from that of the court and so the required inference cannot be drawn. Fourth, section 68 is concerned with due process. Section 68 is not concerned with whether the tribunal has made the "right" finding of fact, any more than it is concerned with whether the tribunal has made the "right" decision in law. The suggestion that it is a serious irregularity to fail to deal with certain evidence ignores that principle. By choosing to resolve disputes by arbitration the parties clothe the tribunal with jurisdiction to make a "wrong" finding of fact.

Mr. Brisby made several submissions in his reply which challenged this approach to section 68. Whilst he accepted that the mere fact that it appears that evidence has been overlooked cannot found a challenge under section 68 (because the tribunal is not bound to refer to every piece of evidence) he submitted that where the evidence is important and goes to an important issue in the case it may well found a challenge under section 68 and it certainly does so if there is a wholesale failure to refer to evidence supporting key planks of a party’s case across a range of key issues. That, he said, would be a breach of the tribunal's duty to act fairly.

The difficulty with this submission is that the court can only make an assessment of the “importance” of evidence by considering all of the evidence before the tribunal on a particular issue. That would be inappropriate because, as Flaux J. and Cooke J. have said, the assessment of the evidence is not a matter for the court. Moreover, if the court embarked on the exercise and concluded that the piece of evidence not referred to by the tribunal was “important” it could not conclude that the tribunal, by failing to refer to it, must have overlooked it because the tribunal may not have regarded it as important and in consequence did not refer to it. Even if the court were able to conclude that the tribunal had overlooked evidence all that that would show was the tribunal’s finding was arguably “wrong”. That is not a failure of due process. It may be a “mistake” by the tribunal but it is not a serious irregularity.

But can there be an exceptional case as suggested, but not decided, by Toulson J. and Akenhead J. where a tribunal’s failure to refer to evidence amounts to a breach of the tribunal’s duty pursuant to section 33 of the Arbitration Act to act fairly? I do not consider that there can be such an exceptional case where the allegation of exceptionality involves the court in assessing the evidence before the tribunal in order to decide whether it has been overlooked. In this regard I respectfully differ from Toulson J. and Akenhead J. both of whom suggested that there might be exceptional cases where a failure to refer evidence might found a challenge under section 68. I respectfully agree with Flaux J. and Cooke J. who were of the view that there can be no exceptions (as was Andrew Smith J. had he not thought it appropriate to follow what Toulson J. and Akenhead J. had said). However, it is difficult and perhaps impossible to identify or describe an exceptional case before one encounters it. Mr. Brisby says that this case is exceptional because of the “wholesale disregard” of the Grigorishin Respondents’ evidence on many topics. He said that that evidenced a breach of the section 33 duty of fairness. I shall therefore return to this issue after I have considered each of the alleged failures to refer to evidence (see below, beginning at paragraph 128).

Where the tribunal has admitted that it has overlooked a piece of evidence then, depending upon the circumstances, as Cooke J. said in New Age, there might be a serious irregularity within section 68(2)(i). Mr. Brisby submitted that it cannot sensibly be said that an admission of an irregularity is a sine qua non because some people never admit a mistake. But if there is no admitted overlooking of evidence then the court is faced with the task of assessing the evidence which is not a matter for it.

There are two further disputes between the parties as to the law relating to s.68 challenges.

The first concerns the court's approach to reading and understanding arbitration awards. It has long been established that

“the courts strive to uphold arbitration awards. They do not approach them with a meticulous legal eye endeavouring to pick holes, inconsistencies and faults in awards and with the objective of upsetting or frustrating the process of arbitration. Far from it. The approach is to read an arbitration award in a reasonable and commercial way, expecting, as is usually the case, that there will be no substantial fault that can be found with it.” (see Zermalt Holdings v Nu-Life Upholstery Repairs (1985) 2 Estates Gazette p.14 per Bingham J.)

Mr. Brisby submitted that higher standards are appropriate when the tribunal chosen by the parties consists of former Commercial Court judges and a distinguished lawyer, where considerable resources have been spent on the arbitration (in this case some £12.8m.) and where leading firms of solicitors and leading and junior counsel have been employed. When one is judging what is “an acceptable consequence” of the parties’ choice of tribunal in such a case (the phrase is taken from paragraph 28 of the DAC report) the parties are entitled, said Mr. Brisby, to expect a standard of award higher than that which is to be expected in a rent review arbitration of a corner shop conducted by a chartered surveyor (which was the type of arbitration in Zermalt).

I accept that when reading and understanding an award it is appropriate to have in mind the type of tribunal which wrote the award. However, the approach of the courts, reflecting the intention of Parliament as expressed in section 1 of the Arbitration Act 1996, which sets out the principles which underpin the Act, is to support the resolution of disputes by arbitration and not to intervene in arbitration except as provided in the Act. That is why the courts strive, as Bingham J. put it (even before the enactment of the 1996 Act) to uphold arbitration awards. Section 1 of the Arbitration Act applies to all arbitration awards and so, in my judgment, the approach described by Bingham J. must apply to all arbitration awards, whoever the arbitrators might be. I therefore consider that all arbitration awards should be read in a reasonable and commercial way, expecting that no substantial fault will be found with them. Consistently with this conclusion the approach of Bingham J. in Zermalt has been applied to awards of “three professional lawyer arbitrators” (see ABB AG v Hochtief Airport GMBH [2006] EWHC 388 (Comm) at paragraphs 1 and 64), to an award of a retired law lord and two experienced international arbitrators (see Fidelity Management v Myriad International Holdings [2005] EWHC 1193 (Comm) at paragraphs 2 and 4) and to an award of a retired law lord, a retired US Judge and a leading international arbitrator (see Petrochemical Industries v Dow Chemical [2012] 2 Lloyd’s Reports at paragraphs 2 and 27).

The second additional matter of law is raised by the allegation of the Grigorishin Respondents that certain conclusions were “manifestly illogical and cannot rationally be sustained”. These challenges derive from the language used by Sales J. in Metropolitan Property Realizations Limited v Atmore Investments Limited [2008] EWHC 2925 (Ch). In that case, which concerned a rent review arbitration, the arbitrator’s approach to assessing the revised rent assumed that a notional tenant would take a relevant notional lease at a rate which included a profit element for itself but his calculation did not in fact include any element of profit for the notional tenant. Sales J. concluded that the award was obviously flawed as a matter of the commercial logic which the arbitrator had himself decided should be applied. The award could not be regarded as a “rationally sustainable resolution of, or dealing with, the basic issue which he had to determine” (see paragraph 20). This was a serious irregularity within section 68(2)(d) – a failure to deal with an issue.

It seems to me that this decision has to be treated with some care. It is clear that the mere fact that the arbitral tribunal has reached the wrong conclusion cannot constitute a serious irregularity within section 68. That was clear when Sales J. made his decision. HHJ Humphrey Lloyd said so in Weldon Plant v Commission for New Towns [2001] 1 AER (Comm) 264, which was cited with approval by Colman J. in World Trade Corporation v Czarnikow Sugar [2005] 1 Lloyd’s Reports 42. It was also made clear by the House of Lords in Lesotho. Sales J. referred to World Trade Corporation but did not refer to Lesotho. I infer that it was not cited to him. It is also clear that so long as an arbitrator deals with an issue it does not matter that he has done so “well, badly, or indifferently” (see The Secretary of State for the Home Department v Raytheon Systems Limited [2014] EWHC 4375 (TCC) at paragraph 33(vi) per Akenhead J.). I therefore have difficulty in accepting that the mere fact that the tribunal’s reasoning is manifestly illogical or cannot rationally be sustained can amount to a serious irregularity. Indeed Mr. Brisby made clear in his reply that he did not contend that illogicality is a free-standing ground for striking down an award. Rather, it may indicate that there has been a failure to address an issue. It seems to me that that is way in which the decision of Sales J. in Metropolitan Property Realizations Limited v Atmore Investments Limited should be understood. That case was based upon section 68(2)(d). The “glaring illogicality” identified by Sales J. indicated that the arbitrator in that case had not dealt with an issue which it was essential for him to determine. To regard illogicality or irrationality by itself as a form of serious irregularity would lead to the courts examining the reasoning of an arbitral tribunal to see whether it was logical and rational. That is not envisaged by section 68.

Having considered the legal issues which were debated before me I shall now consider the several challenges to the Award.

This ground arises from paragraph 202 of the Award in which the Tribunal said as follows:

“The further point taken by the Grigorishin Respondents is that the Claimants have no title to sue for the monies transferred under the illicit scheme because it is reflective of NPO’s (or Stremvol’s) loss. But the profits were not distributed by way of dividend but by direct payment under the direction of Mr. Grigrishin to IGIL and GSP. The Claimant’s claim is against the Grigorishin Respondents in respect of sums takem out of NPO by one shareholder but not distributed to the Claimants (the other shareholders) in breach of the JVA. It is NPO who has no cause of action. We would regard the sums improperly distributed to the Grigorishin interests as recoverable on the basis of unjust enrichment. ”

The Grigorishin Respondents, by means of Mr. Sciannaca’s witness statement (at paragraphs 112-146) and Mr. Brisby’s skeleton argument, have challenged this paragraph by reference both to the treatment of the reflective loss argument and to the mention of unjust enrichment. In essence it is said that the Tribunal, in breach of its section 33 duty to act fairly, failed to give the Grigorishin Respondents an opportunity to address it on each of those issues. In his oral submissions Mr. Brisby took the unjust enrichment challenge first. He said that the Tribunal held that the basis of the Claimants’ recovery was unjust enrichment. Such a claim had never been advanced in the arbitration and so the Grigorishin Respondents had had no opportunity to deal with it. By deciding the case on the basis of unjust enrichment without giving the Grigorishin Respondents an opportunity to address it on that subject the Tribunal failed to comply with its duty under section 33 of the Arbitration Act to act fairly.

This complaint raises a question of construction of the Award. The question is whether, looking at the award as a whole in a fair and reasonable way, the Tribunal decided the case on the basis of a claim in unjust enrichment which had never been advanced before it or, as the Claimants submitted, on the basis of a claim for damages for breach of the JVA which had been advanced before it.

The following paragraphs of the Award must be noted. Paragraph 15 said:

“The subject-matter of the disputes concerns alleged breaches of the JVA ………….The Claimants allege that the Grigorishin Respondents, by their Illicit Scheme, have breached certain provisions of the JVA ………..”

Paragraph 108 stated:

“In addition to their entitlement to the Put Option Price, the Claimants seek damages from the Grigorishin Respondents for a series of alleged breaches of the JVA.”

Paragraph 111 listed the issues for decision. No.16 was described as:

“Are the Claimants entitled to any damages for any alleged breaches of the JVA, and if so, in what amount. In particular, to what sums (if any) are the Claimants entitled for any wrongful diversion of profits away from the joint venture ?”

Paragraph 138 set out the relief sought by the Claimants. They sought, in particular, a declaration that “in orchestrating and profiting from/participating in the Illicit Scheme, the Grigorishin Respondents acted in breach of the express and/or implied terms of the JVA.” In addition damages in the sum of US$55.8 million were sought “for loss arising from the Grigorishin Respondents’ breaches of the JVA.”

The Tribunal dealt with the question whether the Grigorishin Respondents diverted profits by means of the Illicit Scheme between paragraphs 165 and 190 and the extent of the Illicit Scheme between paragraphs 191 and 201.

The question whether the Claimants were disabled from recovering their loss by reason of the principle of reflective loss was considered in paragraph 202. Mr. Brisby submits that in paragraph 202 the Tribunal identified restitution for unjust enrichment as the basis of the Claimant’s claim.

At paragraph 242 of the Award the Tribunal set out its conclusions in these terms:

“For all the reasons set out above the Tribunal concludes that the Claimants are entitled to recover:

….

(b)

payment of US$55,800,000 by way of recovery of non-contractual payments of profits under the JVA and/or damages.”

At paragraph 260 the Tribunal recorded its decisions in these terms:

“For all of the foregoing reasons, and rejecting all claims and submissions to the contrary, the Tribunal unanimously Hereby Finds, Declares and Awards as follows:

……………

3.

In orchestrating and profiting from/participating in the Illicit Scheme, the Grigorishin Respondents acted in breach of the express and/or implied terms of the Joint Venture Agreement.

4.

The Grigorishin Respondents are ordered to pay jointly and severally to the Claimants damages of US$55,800,000 arising from the Grigorishin Respondents’ breaches of the Joint Venture Agreement.”

It is apparent that paragraph 202 is the only place in the Award where reference is made to unjust enrichment. All other material passages refer to a claim in damages for breach of the JVA.

Mr. Brisby submitted that paragraph 202 was where the Tribunal made its finding and that finding was that the sums improperly distributed were recoverable on the basis of unjust enrichment. He said that that finding must govern, in particular, paragraphs 242 and 260 which refer to the “reasons set out above” or to the “foregoing reasons”. He said that the Tribunal when referring in paragraph 202 to the Claimants’ claim being in respect of sums not distributed in breach of contract was merely describing the claim as presented to it. It cannot have been intending to make a finding of breach because the terms breached were not identified. He submitted that the Tribunal, having concluded that $55.8m. had been diverted from the Claimants, realised that such sum could not be the correct measure of the Claimant’s loss. The correct measure was the diminution in value of the Claimants’ shareholding in Stremvol as a result of the siphoning off of NPO’s profits as to which there was no evidence. The Tribunal therefore realised that it could not award $55.8m. as damages but instead awarded it in restitution on the basis of unjust enrichment.

By contrast Mr. Jowell QC, who appeared for the Claimants in the arbitration and on this application, submitted that it was apparent from the Award as a whole that the Tribunal awarded $55.8m. as damages for breach of the JVA. The last sentence of paragraph 202 of the Award (as he explained in his oral submissions) was saying no more than that the sums improperly distributed to the Grigorishin interests, by which the Tribunal must have meant Technoimport and ES LLC, the two companies to which profits were diverted, would also be recoverable from them on the basis of unjust enrichment.

Given the repeated references to a claim for damages for breach of the JVA throughout the Award in paragraphs 15, 108, 111, 138, 242 and 260 I consider that the basis of the Tribunal’s Award can only have been intended to be a claim for damages for breach of the JVA. In particular paragraph 242 contains the Tribunal’s “Conclusions” and expressly states that the Claimants are entitled to $55.8m by way of recovery of non-contractual payments of profits under the JVA and/or damages. Mr. Brisby submitted that the reference in paragraph 242 to “and/or damages” indicated that the first part of the paragraph referred to something which was not damages and must be the restitutionary claim referred to in paragraph 202. I do not consider that to be a fair reading of paragraph 242 or of the Award as a whole. The first part of the paragraph referred to “recovery of non-contractual payments of profits”. I read that as a reference to the diversion of profits being non-contractual, that is, in breach of the JVA. Mr. Brisby further noted that the Tribunal did not say in paragraph 242 “damages for breach” but just “damages” which could be a reference to equitable compensation. In the light of the other references in the Award to damages for breach of the JVA I do not consider that this was the Tribunal’s intended meaning. Similarly paragraph 260 records the Tribunal’s “Decisions” and expressly states that the Grigorishin Respondents acted in breach of the JVA and were liable to pay US$55.8m as damages arising from the beaches of the express or implied terms of the JVA. The reference to “implied” terms may have been a slip because the suggested implied terms had been rejected earlier in the award (at paragraph 122) but I do consider that this detracts from the sense of the Decision, which was damages for breach of the terms of the JVA. In the light of the many references in the Award to damages for breach of the JVA I do not consider that the paragraphs headed Conclusions and Decisions can fairly be understood by reference to the solitary mention of unjust enrichment in paragraph 202 of the Award.

It is true that the particular terms breached were not identified. But the List of Issues did not identify any issue as to whether, if there was an Illicit Scheme, it was a breach of contract by the Grigorishin Respondents. A number of terms of the JVA were set out in paragraph 121 but no part of the Award deals with an analysis of the JVA (save for the rejection of the Claimant’s implied terms in paragraph 122) or of the terms that would be breached by the Illicit Scheme. No complaint of that has been made. That, together with the List of Issues, suggests that there was no dispute before the Tribunal that if the Illicit Scheme were proved there would be a breach of the JVA by the Grigorishin Respondents. Thus in paragraph 164 it was said that with regard to the Illicit Scheme the Grigorishin Respondents denied any such activity but contended in the alternative that if there was any such diversion the Claimants have no cause of action in respect of what is said to be mere reflective loss. There is no record of any contention that if there was an Illicit Scheme it was not a breach of the JVA. That appears to me, on a fair reading of the Award, to be the reason why the Tribunal did not identify the terms of the JVA which were breached. Accordingly it would not be correct to infer from the absence of any identification of the terms breached that the basis of the Tribunal’s Award was not damages for breach of the JVA.

In circumstances where the Tribunal clearly understood that the basis of the Claimants’ claim was damages for breach of the JVA it would make no sense for the Tribunal to make an award in restitution. Reading the Award as a whole in a reasonable and commercial way, expecting to find no fault with the Award, it would be, in my judgment, inappropriate to read paragraph 202 of the Award as a statement that the Claimants’ claim succeeded, not in damages for breach of the JVA as had been claimed, but in restitution for unjust enrichment which had not been claimed.

With regard to Mr. Brisby’s submission that $55.8m. could not be the correct measure of damages for breach of the JVA, the correct measure being the depreciation in the value of the Claimant’s shareholding in Stremvol, it is to be noted that in paragraph 193 of the Award the damages were assessed by reference to “the Claimants’ share of the profit lost by Technoimport’s participation from 2011 to 2013”. In circumstances where, as stated in paragraph 202, “profits were not distributed by way of dividend but by direct payment under the direction of Mr. G[rigorishin] to the [the Claimants]” that would appear to be a justifiable measure of loss and it is not obvious that the only correct measure of the Claimant’s loss was the diminution in value of the Claimants’ shareholding in Stremvol. It follows that there is no good reason to think that, as it was put by Mr. Brisby, “the penny dropped” and the Tribunal realised that they had no evidence of the true measure of loss and so made a restitutionary award instead.

The question remains, why did the Tribunal refer to unjust enrichment in the final sentence of paragraph 202 ? The suggestion made by the Claimants is that having explained why the reflective loss point was not a good point (because NPO had no cause of action) the Tribunal made a passing reference to an additional point, namely that the sums could be recovered on the basis of unjust enrichment from Technoimport and ES LLC (who were not parties to the arbitration). Mr. Jowell did not, I think, identify who had the benefit of that cause of action. He must have meant the Claimants (because the Claimants’ response to the reflective loss point was that NPO had no cause of action.) It is, I accept, unclear precisely what the Tribunal had in mind (as is apparent from the development of Mr. Jowell’s explanation of the reference to unjust enrichment in paragraph 202 from his written explanation in paragraph 42(5) of his Initial Skeleton Argument to his oral explanation – see Day 3 p.27 line 22 to p.28 line 17). But what is clear is that the basis of the Award in fact made (see paragraphs 242 and 260) was damages for breach of the JVA. The Tribunal may have thought that there was an additional claim for unjust enrichment against Technoimport and ES LLC but that was not the basis of its Award against the Grigorishin Respondents. Since it was not the basis of its Award the Tribunal was under no obligation pursuant to section 33 of the Arbitration Act 1996 to ask the parties whether they wished to say anything about restitution.

Mr. Brisby’s second main complaint about paragraph 202 was that the Tribunal’s stated reason for concluding that the reflective loss principle was not a bar to the claim in damages had only been taken in the Claimants’ reply submissions. He submitted that it had not been taken before that and that in those circumstances it was the duty of the Tribunal, pursuant to section 33 of the Arbitration Act 1996, to give the Grigorishin Respondents an opportunity to comment upon it.

The question of reflective loss was dealt with in the Claimants’ Reply at paragraph 157.

“In relation to losses alleged to be reflective of the losses of NPO, the Claimants’ claims are based on breaches of the Grigorishin Respondents’ express and implied obligations under the JVA (to which NPO is not a party). NPO has no cause of action in respect of those breaches of contract. Simply put, there is no reflective loss; the Claimants’ claims are, instead, claims for breach of contract.”

Mr. Brisby submitted that this only stated that NPO did not have a claim in damages for breach of the JVA . It did not state that NPO had no cause of action at all. Mr. Jowell said it was a plea that NPO had no cause of action at all. I am not certain but I think Mr. Brisby has the better of the argument on this point.

The question of reflective loss was also dealt with in the Claimants’ Reply Submissions. There it was said that there was no suggestion by either party that the extraction of profits was unlawful under Ukrainian law. It was then said:

“There is therefore no question of any wrong done to NPO caused by the Grigorishin Respondents or any loss to NPO as a result of any breach of duty owed to NPO by the Grigorishin Respondents.”

That stated that no wrong was done to NPO, which is the same as saying NPO had no cause of action. The matter was made even more clear by this submission:

“There is no question of double recovery. NPO is not alleged by either side to have any cause of action in relation to the Grigorishin Respondents conduct. ”

It is to be noted that paragraph 202 of the Award appears to be an acceptance of the Claimants’ submission in reply. Mr. Brisby submitted that if the Tribunal were proposing to deal with the reflective loss argument on the basis of the argument advanced in the Reply Submissions it was incumbent upon the Tribunal, pursuant to its duty under section 33, to give the Grigorishin Respondents the opportunity to deal with it. I am unable to accept this submission. Even if one assumes that the point was only taken in the Reply Submissions (in circumstances where it had not been pleaded in the Reply) the Grigorishin Respondents had every opportunity to deal with it. Upon reading the Reply Submissions dated 4 December 2015 they could, had they so wished, have told the Tribunal that the point had not been pleaded and that they had not dealt with the question of whether or not NPO had a cause of action. Or they could have told the Tribunal, as they told me, that it was obvious that NPO had a cause of action. Instead they told the Tribunal on 14 December 2015 that there was no need for a hearing unless the Tribunal thought that further oral submissions would be of assistance. In those circumstances the Tribunal was entitled to assume that the Grigorishin Respondents had no wish to say anything further in response to the Reply Submissions. This was especially so in circumstances in which Sir Gordon Langley had said to the parties on 23 September 2013: “….if either of you change your mind and say: yes, I need one, I have seen what the other man said and it is so awful I need to come along and say so.” The Tribunal thus had no reason to think that the Grigorishin Respondents, ably advised by counsel and solicitors, had not said all that they wished to say in response to the reply submissions of the Claimants. In those circumstances there was no duty upon the Tribunal to ask whether they wished to say anything more about the Claimants’ submissions concerning the reflective loss principle. My approach to this matter is supported by the approach of the Court of Appeal in the similar but not identical circumstances arising in The Magdalena Oldendorff [2008] 1 Lloyd’s Reports 7 at paragraphs 36-42 per Waller LJ and at paragraph 48 per Lawrence Collins LJ.

I therefore reject the case made under Ground A1 that there was a serious irregularity in that the Tribunal failed to afford the Grigorishin Respondents an opportunity to comment on either the restitution point or the reflective loss point.

This criticism was not developed; and rightly so. The Claimants’ response to the reflective loss argument which was accepted by the Tribunal was based upon NPO not having a cause of action. If so (and the finding that it did not cannot be challenged) then the reflective loss argument could not succeed; see Johnson v Gore Wood [2002] 2 AC 1 at p.62 C-D per Lord Millett. In any event, for the reasons I have given, illogicality and irrationality cannot amount to a serious irregularity.

This criticism is based upon the suggestion that there was clear evidence that NPO had suffered loss, which evidence had been overlooked by the Tribunal. But the reflective loss argument failed because NPO had no cause of action to recover such loss. There is therefore no reason to suppose that the evidence of loss was overlooked. It was apparent from Mr. Brisby’s submissions that he wished to advance the point that NPO did in fact have a cause of action. But whether the Tribunal’s finding that NPO had no cause of action is a finding of fact or a mixed finding of fact and law section 68 cannot be used to challenge such a finding.

I shall deal with Ground B2 before considering Ground B1. They are closely related and it makes sense to consider B2 first. Mr. Sciannaca deals with them between paragraphs 147 and 178 of his witness statement.

This criticism is based upon the suggestion that the Tribunal confused and conflated Mr. Grigorishin with the Grigorishin Respondents. Whereas it was the Claimants’ case that Technoimport and ES LLC were owned or controlled by the Grigorishin Respondents it was said that the Tribunal found that Technoimport was owned or controlled by Mr. Grigorishin. Thus it was said that the Grigorishin Respondents had not had any opportunity to make submissions on such a finding.

The Grigorishin Respondents said at the outset of their written submission before the Tribunal that Mr. Grigorishin “stood behind” the Grigorishin Respondents. The Tribunal recorded at paragraph 7 of the Award that the Grigorishin Respondents were beneficially owned or controlled by Mr. Grigorishin.

The case of the Claimants in the arbitration was that the Grigorishin Respondents had breached their obligations under the JVA by procuring profits to be diverted to two companies within their ownership or control, Technoimport and ES LLC. Mr. Brisby observed, correctly it seems, that unless the Grigorishin Respondents controlled those two companies the alleged breach of the JVA could not be established.

The case of the Claimants, as recorded by the Tribunal, was that Technoimport and ES LLC were under the control of the Grigorishin Respondents (and ultimately Mr. Grigorishin himself); see paragraph 108 of the Award. Mr. Grigorishin gave evidence before the Tribunal that Technoimport was not controlled by him. That evidence was rejected; see paragraph 170 of the Award. The Tribunal concluded that Technoimport was under the control of Mr. Grigorishin; see paragraph 174 of the Award.

The finding of breach by the Tribunal would suggest that the Tribunal had accepted the Claimants’ case that Technoimport and ES LLC were controlled by the Grigorishin Respondents. The reference in paragraph 178 of the Award to “the fact that both Technoimport and ES LLC were in fact Grigorishin companies” is consistent with an acceptance of the Claimants’ case. Although the Tribunal did not make an express finding that Technoimport was owned or controlled by the Grigorishin Respondents it did so in relation to ES LLC. When making its finding in relation to ES LLC it referred to "another intermediary company which, despite its rather obscure ownership structure is clearly owned or at least controlled by the Grigorishin Respondents” (see paragraph 176 of the Award). …...". There was debate between counsel as to what the word “another” governed. But it is clear to me that the Tribunal was not distinguishing the one company from the other. If the reader of the Award were in doubt such doubt would be dispelled by paragraph 197 which referred to documents being under the control of “the Grigorishin Respondents by virtue of their control of Technoimport”.

Mr. Brisby referred to several paragraphs in the Award (in particular paragraphs 170, 171, 178 and 186) which showed, he submitted, that the Tribunal considered that Technoimport was controlled by Mr. Grigorishin, not by the Grigorishin Respondents. Mr. Brisby said that this did not show that Technoimport was owned or controlled by the Grigorishin Respondents because Technoimport, although controlled by Mr. Grigorishin, might well have been "above or by the side of" the Grigorishin Respondents in the corporate structure so that, although controlled by Mr. Grigorishin, it was not controlled by the Grigorishin Respondents.

Mr. Brisby's submission raises another question of construction of the Award. What was the Tribunal's finding in relation to Technoimport ? I consider, reading the Award in a reasonable and commercial way, expecting to find no substantial fault with it, that the Tribunal's finding was that Technoimport was controlled by the Grigorishin Respondents. I reach that conclusion for these reasons. First, given (i) that the Claimants' case was that Technoimport was controlled by the Grigorishin Respondents with the result that the Illicit Scheme was a breach of the JVA and (ii) that the Tribunal found that the Grigorishin Respondents had breached the JVA, it is to be expected that the Tribunal had found that Technoimport was controlled by the Grigorishin Respondents. Second, the Tribunal recorded that one of the issues it had to resolve was whether Technoimport was owned or controlled by the Grigorishin Respondents (see paragraph 111, Issue 9). Third, the Tribunal expressly held that ES LLC was controlled by the Grigorishin Respondents and the language in which it expressed that finding ("another …...") shows that it drew no distinction between Technoimport and ES LLC. To the same effect is paragraph 197 which expressly referred to Technoimport being within the control of the Grigorishin Respondents.

In truth, the complaint of the Grigorishin Respondents is that the reasoning of the Tribunal (Mr. Grigorishin owned or controlled Technoimport, which company was therefore owned or controlled by the Grigorishin Respondents) was defective. But before the Tribunal it was not the case of the Grigorishin Respondents that Mr. Grigorishin in fact controlled Technoimport but in such a manner that the Grigorishin Respondents did not control it. Their case was, based upon the evidence of Mr. Grigorishin, that he, and therefore the Grigorishin Respondents, did not own or control Technoimport at all. The Tribunal unsurprisingly approached the question whether the Grigorishin Respondents controlled Technoimport by seeing whether Mr. Grigorishin, who owned or controlled the Grigorishin Respondents, owned or controlled Technoimport. For the Grigorishin Respondents to say that that was a wrong approach because, although owned or controlled by Mr. Grigorishin, Technoimport may in fact have been "above or beside" the Grigorishin Respondents in the corporate hierarchy, ignores the circumstance that such a case was not advanced before the Tribunal. In any event defective reasoning (assuming that it was defective) does not amount to a serious irregularity within section 68.

I therefore reject the suggestion that the Tribunal made a finding as to which the Grigorishin Respondents had had no opportunity to make submissions.

This criticism is based upon the same suggestion made under Ground B2 that the Tribunal confused and conflated Mr. Grigorishin with the Grigorishin Respondents. It was said that when the Tribunal applied evidential presumptions against the Grigorishin Respondents (when making findings as to damages, saying that financial documentation had not been disclosed by the Grigorishin Respondents), the making of such presumptions was illogical and could not be rationally sustained because such documents, on the Tribunal’s findings, were in the control of Mr. Grigorishin, not the Grigorishin Respondents. In the light of my dismissal of the compliant under Ground B2, this complaint must also fail.

Mr. Brisby made a further point under this head, namely, that documents in the possession of a subsidiary are not necessarily in the control of a parent company (see Lonrho v Shell Petroleum [1980] 1 WLR 637) and that a factual enquiry was required before the Tribunal could determine whether documents in the possession of Technoimport were in the control of the Grigorishin Respondents (see Ardila Invwestments v Zamin Ferrous Limited [2015] EWHC 3761 (Comm)). He said the Tribunal did not carry out that factual enquiry.

This would appear to be a criticism of the Tribunal’s process of reasoning although Mr. Brisby put it as a failure to deal with an issue (notwithstanding that the Grigorishin Respondents do not appear to have identified as an issue in the arbitration the question whether documents in the possession of Technoimport were in the control of the Grigorishin Respondents). The question whether documents in the possession of Technoimport were in the control of the Grigorishin Respondents was not one of the principal or essential issues which the Tribunal was requested to determine. The extent of the Illicit Scheme was such an issue; see paragraph 111 Issue 16. In deciding that issue the Tribunal applied the principle in Armory v Delamirie (1722) 1 Stra. 505; see paragraphs 197-200. The application of that principle is challenged. I would therefore characterise this criticism as being a criticism of the Tribunals’ process of reasoning when resolving one of the essential issues in the case. In applying the principle in Armory v Delamirie the Tribunal referred to a “wholesale failure to afford full disclosure” (see paragraph 200). I would therefore hesitate before concluding that the Tribunal had failed to carry out the factual enquiry which the authorities show is necessary. But even if the Tribunal had failed to do so their error, in applying the principle in Armory v Delamirie, would be either an error or law or an error of fact. In either case there would be no serious irregularity within section 68.

This complaint is advanced between paragraphs 179 and 212 of Mr. Sciannaca’s witness statement. It breaks down into two complaints, C1 and C2.

This complaint concerns the Tribunal’s assessment of the Claimants’ damages for breach of the JVA. In essence it is said that the assessment assumed that NPO would have been able to sell its products into Russia from 2011-2013 without the use of intermediaries. It is said that that assumption was flawed as shown by factual and expert evidence adduced by the Grigorishin Respondents. The Tribunal did not attempt to reconcile that evidence with its assumption and the expert evidence in particular was not mentioned.

The Tribunal dealt with the question of damages between paragraphs 191 and 201. It is true that that analysis reflects an assumption that NPO could sell into Russia without the use of intermediaries. That is because the Tribunal had dealt with the question earlier between paragraphs 178 and 188. In paragraphs 179-187 the Tribunal referred to and considered factual evidence from the Claimants and from the Grigorishin Respondents and in paragraph 188 the Tribunal referred to the expert evidence. Thus this complaint comes down, in reality, to a disagreement with the Tribunal’s finding on the evidence adduced before it. Mr. Sciannaca referred to the factual evidence of Mr. Kalaushenko and Mr. Tsymbal as being evidence which the Tribunal overlooked (see paragraphs 188 and 189 of his statement) but the Tribunal referred to both witnesses at paragraphs 183,184 and 187 of the Award.

Particular criticism was made of the Tribunal’s approach to the expert evidence. In paragraph 188 the Tribunal said:

“This was a topic on which there was expert evidence as to the manner in which non-Russian manufacturers sought to deal with Russian import policies. The Tribunal was impressed by the qualifications of Prof. Andreeva and by her oral evidence which was coherent and convincing. But on this topic there is little if any disagreement. The position was that there was no common practice to involve intermediaries between Russian end-users and non-Russian suppliers. Quality was the ultimate determinant.”

It is clear from that passage that the Tribunal’s finding as to the use of intermediaries was based upon its review of the expert evidence. There is no express reference to the Grigorishin Respondents’ expert witness, Mr. Troynich, who was cross-examined during the oral hearing. But the statement that “on this topic there is little if any disagreement” is, in my judgment, having regard to the context, an implicit reference to Mr. Troynich’s expert evidence. The experts had been cross-examined. The statement that “there is little if any disagreement” must reflect, in my judgment, the position after cross-examination. It would not make sense to ignore the cross-examination. The Tribunal was thus of the view, expressed concisely, that on this point Mr. Troynich did not really differ from Prof. Andreeva. I was taken to passages in his two reports which, arguably, showed disagreement, but I was also taken to a passage in his cross-examination, which, arguably, showed that in reality there was little if any disagreement with Prof. Andreeva. The Tribunal was of course entitled to reach its own view of the expert evidence and it clearly did so. The Grigorishin Respondents may disagree with that view but that is no basis for a challenge pursuant to section 68.

I must therefore dismiss this challenge.

This complaint concerns the Tribunal’s finding of damages with regard to the involvement of ES LLC in the Illicit Scheme. The evidence of Mr. Yatsenko was that the loss was between $0.9m. and $2.6m. depending upon whether ES LLC’s fee was 10% or 25%. The Tribunal assessed the loss at $2.6m. (which assumed a fee of 25%) notwithstanding that Mr. Kalaushenko’s evidence was that the fee varied between 10% and 25%.

It is not correct to say that the Tribunal gave no reason for its finding. In paragraph 201 it said:

“In the result, making assumptions favourable to the Claimants, we conclude that some $55.8 million was improperly diverted from the Lukyanenko interests.”

The reference to “making assumptions” is a reference to the principle in Armory v Delamirie which was referred to in the preceding paragraph 200. It is also clear from paragraph 193 that the $55.8m is made up of $53.2m. in respect of Technoimport and $2.6m in respect of ES LLC. The natural reading of the Award is that the sum of $2.6m. was awarded after making an assumption, favourable to the Claimants, that the fee was 25%. Accordingly damages in that sum were considered to have been proved. This is not a finding which can be said to give rise to or evidence a serious irregularity within section 68.

Ground D seeks to challenge the Tribunal’s finding that there was an Illicit Scheme. It is dealt with at length by Mr. Sciannaca in his witness statement between paragraphs 213 and 306. The foundation of the challenge is the assertion, as the above description of the challenge shows, that the Tribunal overlooked, misunderstood or failed to give proper consideration to key evidence relied upon by the Grigorishin Respondents. This assertion cannot be established without the court reviewing all of the evidence adduced before the Tribunal relevant to the issue and forming a view as to whether the Tribunal overlooked the evidence or, instead, considered it unhelpful or unreliable. For the reasons I have already given that is not a legitimate exercise for the court on a section 68 challenge. I shall however comment upon the several allegations.

The case of the Grigorishin Respondents, as summarised in the Grounds of Challenge, was that the Claimants were provided with and approved over several years numerous documents reflecting and setting out information regarding NPO’s dealings with Technoimport. The key point advanced was that the documents (board minutes, budget and management accounts) were strong evidence against the suggestion that NPO’s sales to Technoimport were part of a scheme to defraud the Claimants by covert means. As advanced by Mr. Brisby the Tribunal’s failure to refer to the board minutes which recorded the Board’s approval of the business done by Technoimport was the most serious. He described it as extraordinary. This approval not only undermined the existence of the suggested covert Illicit Scheme but also undermined the suggestion that the terms of the JVA had been breached (for if there had been consent, there could have been no breach).

The Tribunal dealt with this part of the case at paragraph 175 in the following concise terms:

“However we accept Messrs Lukyanenko Snr and Jnr’s evidence that they were not paying any detailed attention to these accounts. It strikes us as clear that the scale of Technoimport’s involvement in the supply chain, the degree of mark up, the alleged need to pay commission to Gazprom executives, the level of indebtedness that had been created all came as a surprise to the [Claimants]. The whole arrangement was opaque and certainly not transparent. In short whilst it may be said that the [Claimants] could have been more alert and inquisitive the situation was a long way short of their representing approval of the nature of Technoimport’s involvement.”

Mr. Brisby relied upon the Tribunal’s failure to mention the board minutes in this part of the Award. But Mr. Jowell pointed out that there was a footnote to the reference to Mr. Lukyanenko Snr’s evidence in paragraph 175. That footnote referred to the cross-examination of Mr. Lukyanenko which was based upon the board minutes. Thus, although the Tribunal had not mentioned the board minutes in the text of the Award the footnote showed that the Tribunal must have had in mind those minutes. Mr. Brisby said that this did not assist because Mr. Lukyanenko had resigned as director in December 2010 and none of the relevant contracts to which the board had consented were made before then. This was somewhat different from his skeleton argument at paragraph 64(1) which relied upon the board minutes from 2007 to 2013 (as did Mr. Sciannaca in his witness statement at paragraphs 224-227). The footnoted reference was in respect of a cross-examination based upon board minutes in 2010 which were amongst those relied upon by the Grigorishin Respondents in support of their case that the Claimants had approved a number of substantial contracts with Technoimport. It seems to me that the footnoted reference undermines the allegation that the Tribunal did not have the board minutes in mind.

Mr. Sciannaca in his witness statement complained that the Tribunal had “entirely missed the point” (see paragraph 258), that the Tribunal had “failed even to mention” many documents and questions (see paragraphs 259 and 261) and referred to the Tribunal’s failure to mention “this great weight of objective documentary evidence” (see paragraph 262). He said that this could only mean that the Tribunal had overlooked, fundamentally misunderstood or did not properly consider the evidence. But for the court to seek to decide whether the Tribunal had acted in the manner suggested or, instead, had preferred the evidence of Messrs Lukyanenko to the evidence relied upon by the Grigorishin Respondents would require the court to review the entirety of the relevant evidence. This is not appropriate on a section 68 challenge for the reasons I have given.

The Tribunal held that in 2012 there had been a distribution of profits to a company owned by Mr. Grigorishin, Kozakia, without any corresponding distribution to the Claimants. In making this finding the Tribunal rejected Mr. Grigorishin’s explanation of the payment to Kozakia. The Grigorishin Respondents complain that the Tribunal made its finding without there being competing evidence as to the purpose of the payment and failed to mention, let alone reconcile, other evidence consistent with and corroborating Mr. Grigorishin’s evidence, in particular, an NPO document dated 24 November 2011 and the testimony of Mr. Tsymbal, Mr. Kuyda and Mr. Golovko (quotations from which appear between paragraphs 265 and 276 of Mr. Sciannaca’s witness statement).

This challenge thus appears to be a criticism of the facts found by the Tribunal and upon its assessment of Mr. Grigorishin’s evidence in the light of the other evidence adduced by the Grigorishin Respondents. The conventional view of section 68 is that such challenges are doomed to fail.

The Tribunal’s findings are in paragraphs 164-168. In summary the Tribunal found that the Grigorishin Respondents were in control of profit distribution and that profits had been distributed to Mr. Grigorishin and Mr. Lukyanenko Jnr from 2008 until 2011. Although 2012 was a good year profits were not distributed to Mr. Lukyanenko Jnr but were distributed to Mr. Grigorishin through Kozakia. Mr. Grigorishin denied that but his evidence was not accepted. The Tribunal inferred that the Grigorishin Respondents chose to hold back the payment of profit to Mr. Lukyanenko Jnr. because a dispute had arisen “and normal service would not resume until agreement (particularly on the Option Price) was achieved”.

It is true that the Tribunal did not refer to the evidence which is said to have supported Mr. Grigorishin. It may be that the Tribunal did not refer to it because it was considered to be “imprecise and unconvincing” (see paragraph 103 of the Award). But the Tribunal was not obliged to refer to all of the relevant evidence. It reached a clear and reasoned conclusion about the non-distribution of profit in 2012. There is nothing to suggest a serious irregularity in this regard.

The Tribunal considered this question at paragraphs 183-188. It held that Technoimport and ES LLC were “inserted into the chain to extract profit from NPO” (see paragraph 186) after explaining why it was difficult to accept the case of the Grigorishin Respondents (see paragraphs 183-185). The Grigorishin Respondents again complain that the Tribunal did not mention, let alone reconcile its conclusion with, documentary evidence, the evidence of Mr. Kalaushenko and the expert evidence of Mr. Troynich (referred to between paragraphs 286 and 295 of Mr. Sciannaca’s witness statement). This challenge (summarised by Mr. Brisby in his skeleton argument as arising from the Tribunal’s failure to deal with “a substantial body of evidence”) again requires the court to review all of the relevant evidence on a particular finding. For the reasons I have given this is an exercise upon which the court cannot and should not embark pursuant to a challenge under section 68.

Mr. Brisby identified three “strands” to his complaint.

The first strand related to the evidence that the role of Technoimport was to allow commission payments to be paid on NPO’s sales to Gazprom. Mr. Brisby submitted that the Tribunal could not fairly reject the Grigorishin Respondents’ case on this point without dealing with the key evidence in their favour and explaining how it could be reconciled with the Tribunal’s conclusion or why it could be disregarded.

The second strand related to the evidence that ES LLC provided valuable services to NPO and its Russian customers that were best provided from within Russia rather than Ukraine. Mr. Brisby’s submitted that the Trinunal’s finding was based upon a “misstatement” of parts of the evidence.

The third strand also related to the role of ES LLC. Mr. Brisby submitted that on this point the Tribunal overlooked or chose to ignore the expert evidence of Mr. Troynich.

The three strands concern matters which were addressed by the Tribunal. Thus the Tribunal stated in paragraph 183 why it had the “gravest difficulty” in accepting that the purpose of including Technoimport in the sale chain was to pay bribes to Gazprom (the subject matter of the first strand.) Further difficulties are identified in paragraph 184. In paragraphs 187-8 the Tribunal explained why it regarded the position in regard to ES LLC to be of like kind (the subject matter of the second and third strands).

The three strands indicate that the challenge is itself a challenge to the manner in which section 68 has been consistently regarded by judges of the Commercial Court and of the TCC.

I conclude that, as with earlier challenges, this challenge does not reveal a serious irregularity.

There was evidence that in June 2012 an application had been made to the Ukrainian and Russian anti-monopoly authorities for ES LLC to be acquired by ESF, one of the Grigorishin Respondents (see paragraphs 297-300 of Mr. Sciannaca’s witness statement). It was said that this would have been unnecessary if ES LLC was already owned or controlled by the Grigorishin Respondents. The tribunal did not refer to this evidence. Mr. Brisby submitted that the Tribunal had ignored it or failed to take it into account.

For the reasons I have given this is not a legitimate complaint under section 68. The Tribunal dealt expressly with the question whether ES LLC was owned or controlled by the Grigorishin Respondents and gave its reasons for concluding that it was. It was not required to refer to every piece of evidence on the topic and the court cannot assess whether the Tribunal ignored it, as opposed to being unimpressed by it, without assessing the evidence on the subject itself.

Whereas Grounds A-D concerned the JVA, Ground E concerns the Option Agreement. Mr. Sciannaca covers Ground E between paragraphs 307 and 362 of his witness statement.

Grounds E1-E4 are several allegations concerning the treatment by the Tribunal of evidence adduced by the Grigorishin Respondents on the question whether the Claimants had acted oppressively within the meaning of section 202 of the Cypriot Companies Act. If they had done so then the Grigorishin Respondents would only have had to pay the market value of the shares in Stremvol, as opposed to $250m.

I have already rejected the complaints as to the Tribunal’s treatment of the evidence under Ground D. Ground E1 must therefore be dismissed for the same reasons.

The Grigorishin Respondents’ case was that the resignation of the Claimants’ representatives from the Board of Stremvol in February 2013 rendered it inquorate and had a drastic effect on NPO’s business and reputation. The Grounds of Challenge referred to the evidence of Mr. Markov and Mr. Tsymbal that damage had been caused and to the evidence of the valuation experts that Stremvol’s shares had lost almost all value. Mr. Brisby’s submission was that the Tribunal must be taken to have ignored or at least overlooked this evidence.

The Tribunal dealt with this part of the case in paragraphs 234-241. In paragraphs 236 and 237 the Tribunal accepted the Claimants’ case that the resignations occurred because there was no business plan and that there had been a failure to respond adequately to requests for information about Technoimport’s role. It is implicit in that finding that the Tribunal rejected the case of the Grigorishin Respondents’ that the resignations occurred because the Claimants intended (a) to prevent the Board from carrying on business making it easier for KKM to compete for contracts for which NPO would otherwise have tendered and (b) to exert pressure on Mr. Grigorishin to agree to a constitution of the Board which was more favourable for Mr. Luyanenko Jnr. (see paragraph 235). The Tribunal’s reasons are set out in paragraphs 237-241. In paragraph 241 reference is made to the question of damage. The Tribunal held that there was no intention to cause damage.

Thus in considering the question of oppression the Tribunal considered that the question of intention to cause damage was important. The Tribunal was of the view that there was no intention to cause damage. That might well be the reason why the Tribunal made no reference to the evidence that the resignations in fact caused damage to NPO. Whether that approach to the question of oppression is right is a matter of law or perhaps a mixed question of law and fact but in either event it is not a matter that can be raised under section 68. There is no good reason to suppose that the Tribunal ignored or overlooked the evidence of the damage which was said to have been caused.

Mr. Brisby made a further point in his oral submissions. He referred to the Tribunal’s statement that “the resignations did not take effect until mid-March allowing a range of resolutions ….to be passed”. He said that this was a misunderstanding of the position. The articles of the company only allowed resignation after a period of notice so that there was no room for the implied suggestion that the Claimants acted responsibly by delaying the effective date of the resignations. In any event the damage would come later. Thus the Tribunal’s point was a “non sequitur”. I have considered this further submission. But it appears to me that it is no more than a challenge to the reasoning of the Tribunal leading to their finding of fact that there was no intention to cause damage. Section 68 does not permit findings of fact to be challenged on the grounds that the reasoning deployed is inadequate to support the conclusion reached.

The Tribunal considered the reasonableness of the response to the requests for information at paragraph 238 and 239, having earlier summarised the correspondence at paragraphs 131-133. The Tribunal noted in paragraph 238 that the reply from NPO included the “startling announcement that Technoimport was indebted to NPO in the sum of $120 million in circumstances where NPO had no knowledge of Technoimport’s trading margin or the identity of the end user.” It is obvious that the Tribunal thought that that was surprising and required explanation. In paragraph 133 the Tribunal had noted that Mr. Mikulenko had indeed requested further information but in return received a request for reasons for Mr. Mikulenko’s request. In paragraph 239 the tribunal quoted Mr. Markov’s explanation in his evidence and described it as “unconvincing”.

The Grounds of Challenge refer to the letters sent in response to the requests. It is said that the correspondence showed that the responses were in a “full and entirely reasonable manner” and that the Tribunal did not explain why the responses were inadequate or carry out a detailed analysis of the relevant correspondence. Mr. Sciannaca quotes extensively from the evidence between paragraphs 328 and 338 of his witness statement. Mr. Brisby submitted that although the Tribunal had referred to the correspondence it did not address the question why or in what respect it regarded the responses as inadequate. He also referred to the evidence that Mr. Mikulenko (who made the requests) was apparently satisfied with the requests, which evidence the Tribunal must have overlooked or ignored.

As I have already said, an arbitral tribunal does not have to refer to all the evidence on a particular issue. Its obligation is to deal with an issue and to explain why it has reached the decision it has. The Tribunal did that, albeit concisely.

Mr. Brisby submitted that the Tribunal accepted the evidence of Mr. Mikulenko as to the reason for the resignations but “failed to make any assessment of his credibility or to deal at all with the evidence showing his change of tack, despite its obvious relevance. It must be taken to have ignored or overlooked the evidence in question.”

Mr. Jowell described this as “a hopeless point”. I am inclined to agree. The Tribunal heard Mr. Mikulenko’s evidence and read the Grigorishin Respondents’ closing submissions which urged the Tribunal to treat his evidence with considerable caution, principally because he changed his evidence when cross-examined. The change of evidence is described by Mr. Sciannaca between paragraphs 341 and 346 of his witness statement. The assessment of a witness’ credibility is a matter exclusively for the Tribunal. In so far as the Tribunal’s findings as to the reasons for the resignations were based upon an acceptance of Mr. Mikulenko’s evidence it would appear from the references to his evidence in paragraphs 239 and 240 that the Tribunal regarded him as a credible witness. The Tribunal had earlier said (see paragraph 103) that it “felt more comfortable with the witness evidence adduced by the Claimants in the sense that it struck us as more direct and coherent, responding where necessary to any difficulties in the documentation.” It would therefore appear that the Tribunal had made an assessment of Mr. Mikulenko’s credibility. It is no doubt disappointing for a party who considers a witness to lack credibility to find that the Tribunal had formed a different view (without referring to what was regarded by the disappointed party as a “change of tack”) but that cannot be challenged by means of section 68.

This is a complaint of a very different nature from those addressed in grounds E1-E4. It is a complaint that the Tribunal failed to deal with an issue, namely, that the conduct of the Claimants was oppressive in that, following the resignations, the Claimants refused to reconstitute the board other than on a basis less favourable to the Grigorishin Respondents.

I have already referred to the Tribunal’s findings on the question of the resignations. In the narrative section of its Award (paragraph 135) the Tribunal recounted that the Claimants had made some proposals for the reconstitution of the Board on the basis that each “camp” should nominate an equal number of representatives with an additional member nominated by Stremvol. The Tribunal expressly recognised in paragraph 235 that the case of the Grigorishin Respondents was that the resignations were motivated by two aims, the second of which was to exert pressure on Mr. Grigorishin to agree a constitution of the Board which was more favourable for Mr. Lukyanenko Jnr. As I have already said it is implicit in the Tribunal’s acceptance of the Claimants’ case as to what prompted the resignations (see paragraphs 236 and 237) that the case of the Grigorishin Respondents was rejected.

Mr. Brisby submitted that there was a failure by the Tribunal to make any finding about what he described as the second strand to his clients’ case i.e. that the Claimants’ refusal to reconstitute the Board except on a basis more favourable to them was itself oppressive. He says that the Tribunal recognised that this was part of the Grigorishin Respondents’ case because that is clear from paragraph 235 of the Award.

Paragraph 235 of the Award, as to which Mr. Brisby makes no complaint, describes the Grigorishin Respondents’ case as being that the resignations were procured with two aims in mind: (a) to prevent the Board from carrying on business in the short term and (b) to exert pressure on Mr. Grigorishin in the longer term to agree to a constitution of the Board which was more favourable to Mr. Lukyanenko. It seems clear that this summary of the position was taken from paragraph 126 of the Grigorishin Respondents’ Closing Submissions which were served after the oral hearing when the evidence was adduced. Although I was taken to the Defence and Counterclaim and also to the Written Opening Submissions on behalf of the Grigorishin Respondents it seems appropriate to concentrate on the Closing Submissions because they set out the case after the evidence had been heard.

Paragraph 126 of the Closing Submissions was part of a section dealing with the resignation issue. It began at paragraph 119 and ended at paragraph 127. Mr. Brisby in his oral submissions placed emphasis on the opening paragraph 119 which stated that the Grigorishin Respondents contend “that each of (a) the resignation of at least three of the Claimants’ Supervisory Board members which was procured by Mr. Lukyanenko Jnr to render NPOs’s Supervisory Board inquorate; and (b) the refusal to reconstitute the Supervisory Board other than on a basis less favourable to Mr. Grigorishin constitute oppressive conduct within s.202.” It is to be noted that paragraph 119 arguably identifies two separate heads of alleged oppressive conduct whilst paragraph 126 (on which paragraph 235 of the Award was based) suggests one head of oppressive conduct, namely, that the resignations were procured with the aim of damaging NPO in the short term and putting pressure on Mr. Grigorishin in the longer term to agree to a constitution of the Board which was more favourable to Mr. Lukyanenko. Paragraph 127 of the Closing Submissions invited the Tribunal to find that “the resignation of the Claimants’ Supervisory Board members was oppressive conduct”. That also suggests one head of oppressive conduct. Under paragraph 127 were four detailed submissions in support of that single head of oppressive conduct. The second submission, (b), was that it should be inferred that Mr. Lukyanenko foresaw that that the Board would remain inquorate for some time which would make it difficult to compete for large tenders. That was said to constitute “another (albeit related) element of conduct oppressive to the Grigorishin Respondents/Mr. Grigorishin”. Finally, the Agreed List of Issues served with the Closing Submissions identified one issue (issue no.7) under the heading of resignations in these terms: “Did the resignation of the Claimants’ representatives on the NPO Supervisory Board amount to conduct of the affairs of Stremvol (which the Grigorishin Respondents contend includes the affairs of its subsidiary NPO) in a manner oppressive to some part of the members and justifying relief under section 202?”.

It was perhaps because of these slightly varying formulations of the case that the Tribunal, when describing the Grigorishin Respondents’ case, used the phrase “as we understand it”, a phrase often used by judges or arbitrators when the precise formulation of a case is not as clear as it might be. I do not consider that the Tribunal can be criticised for its formulation of the case; it is taken from paragraph 126 of the Closing Submissions. It suggests a single head of oppression as does paragraph 127. As I have said Mr. Brisby has not criticised the Tribunal in this regard. It may be that the opening paragraph 119 suggests two strands to the case but the more detailed paragraphs dealing with what the Tribunal was urged to infer did not. That being so the Tribunal was entitled to address what it regarded, having considered the Closing Submissions, to be the suggested case of oppression by examining the aim of the resignations or what it was that prompted the resignations. In that regard the Tribunal accepted the evidence of the Claimants that the resignations were prompted by the absence of a business plan and a failure to respond adequately to requests for information about Technoimport’s role. It is implicit in that finding that the case of the Grigorishin Respondents that the resignations were procured with the aim of damaging NPO in the short term and exerting pressure on Mr. Grigorishin in the longer term to accept a less favourable constitution of the Board was rejected.

I am therefore unable to accept that the Tribunal failed to deal with an essential issue.

Having considered the individual complaints of serious irregularities I can now return to Mr. Brisby’s submission that this is an exceptional case. Mr. Brisby submitted that a number of good complaints can be accumulated so as to demonstrate an exceptional case of failing to dealing with key evidence such as to amount to a breach of a tribunal’s duty to deal with the losing party’s case fairly. Mr. Jowell submitted that there were no good complaints to be accumulated and that in any event there is no support for the approach suggested by Mr. Brisby. It would encourage what Toulson J. deprecated in Arduina Holdings v Celtic Resources as “grapeshot” (see paragraph 51).

I accept that when a number of irregularities within section 68 have been established it may be possible for them, when considered together, to amount to a substantial injustice in the sense of an “extreme case where the tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected” whereas, when considered in isolation, each irregularity might not amount to a substantial injustice. But the starting point must be irregularities within the closed meaning of section 68. I have considered the many matters alleged to constitute irregularities in this case. I have found none to be established. What has been shown is that on important issues, in particular, the existence of the covert Illicit Scheme (see grounds D2, D3 and D4) and the suggested oppression by the Claimants (see ground E3), the Tribunal did not refer to some of evidence relied upon, and said to be crucial, by the Grigorishin Respondents. However, for the reasons I have endeavoured to explain, such failures to refer to evidence cannot amount to a serious irregularity within section 68 in circumstances where the Tribunal has resolved the key issues in the case and has given its reasons for doing so. It is difficult, perhaps impossible, to aggregate a number of non-irregularities within section 68 and conclude that that there was in fact a serious irregularity within section 68(2)(a), namely, a failure to comply with the Tribunal’s duty to act fairly.

Mr. Brisby’s submission was that such was “the wholesale failure” of the Tribunal to refer to “large chunks of crucial evidence on central parts of the case” that there had been a breach of the Tribunal’s duty pursuant to section 33 of the Arbitration Act to act fairly. In support of that submission he said that any judge deciding a case in court would not only resolve the essential issues but would also deal expressly with the key evidence relied upon by the parties. I agree that that is common practice. The standard to be met by judges has recently been stated by Lord Dyson MR in the following terms:

“Our system of civil justice has developed a tradition of delivering judgments that describe the evidence and explain the findings in much greater detail than is to be found in the judgments of most civil law jurisdictions. This requires that a judgment demonstrates that the essential issues that have been raised by the parties have been addressed by the court and how they have been resolved. In a case (such as this) which largely turns on oral evidence and where the credibility of the evidence of a main witness is challenged on a number of grounds, it is necessary for the court to address at least the principal grounds. A failure to do so is likely to undermine the fairness of the trial. The party who has raised the grounds of challenge can have no confidence that the court has considered them at all; and he will have no idea why, despite his grounds of challenge, the evidence has been accepted. That is unfair and is not an acceptable way of deciding cases.” (see Harb v HRH Prince Abdul Aziz Bin Fahd Bin Abdul Aziz [2016] EWCA Civ 556 at paragraph 39).

It is to be noted that the Judge’s duty, like that of the arbitration tribunal, is to decide the “essential” issues that have been raised by the parties. The Tribunal did so in the present case. The extent to which a Judge is obliged to deal with particular challenges to the evidence upon which he or she relies when making an award or with evidence regarded as key by the losing party will depend upon the nature of the case, the nature of the evidence in question and the importance of the challenges to that evidence. There is no hard and fast rule but in an appropriate case, as the decision in Harb shows, a Judge may be required to explain how the court dealt with at least the principal challenges to the evidence upon which he or she relies. The question thrown up by Mr. Brisby’s submission is whether an arbitral tribunal may be under the same obligation. Of course the tribunal may choose to address the principal objections to the evidence on which it relies in its reasons and also the evidence regarded by the losing party as key but the question is whether it is bound to do so.

The obligation upon an arbitral tribunal to give “the reasons for the award” is set out in section 52(4) of the Act, part of a group of sections dealing with the award. Section 52, unlike section 33, is a non-mandatory provision; see section 4 and Schedule 1 to the Act. This suggests that the duty to give reasons stems from section 52, not from section 33, the duty to act fairly, which is part of a group of sections dealing with the arbitral proceedings. The general duty provided by section 33 applies “in the exercise of all other powers conferred on [the tribunal]”. But section 52(4) imposes a duty, not a power. One could, however, argue that the two sections must be read together and that where the duty to give reasons has not been excluded by agreement (for section 52, unlike section 33, is a non-mandatory provision) the duty to act fairly includes the duty to give reasons. This construction is consistent with, and perhaps supported by, a comment in the DAC report at paragraph 247 that “it is a basic rule of justice that those charged with making a binding decision affecting the rights and obligations of others should (unless those others agree) explain the reasons for making that decision.” For the purposes of this judgment I shall assume that this construction is correct.

It has long been established that the court’s power to intervene in an arbitration pursuant to section 68 is not concerned with whether the decision of the tribunal is right or wrong. For that reason Akenhead J. said in Secretary of State v Raytheon that it does not matter whether a tribunal dealt with an issue “well, badly or indifferently.” What matters is whether it has dealt with the issue. It follows from this well-established position that so long as the tribunal has dealt with the issue and given “the reasons for the award” that is sufficient. The parties have agreed to be bound by the decision of its chosen tribunal. There is no scope for objecting to what the reasons do or do not contain (save that when the reasons are not sufficient to enable an application under section 67, 68 or 69 to be properly considered additional reasons may be ordered pursuant to section 70).

When an arbitral tribunal chooses to deal concisely with the essential issues and to express its reasons by reference to the evidence regarded by the tribunal as key, without dealing with the objections to that evidence or with the evidence that each party submitted was key the tribunal has, in my judgment, discharged its duty of dealing with the essential issues and of giving the reasons for its award. When an arbitral tribunal chooses to do that it is not unjust or unfair; the duty to act fairly imposed by section 33 does not require the tribunal to refer in its award to all of the evidence regarded by the losing party as key or to deal with all of the submissions made in relation to the evidence but simply, in the language of section 52(4), to set out “the reasons for the award”. All that can be said is that such an approach to writing the reasons for an award is different from the current practice of the courts when writing judgments. It is true that where the evidence alleged to be key by the losing party is not referred to by the tribunal that party may sometimes be left in doubt as to what the tribunal thought of that evidence, but in circumstances where the parties have agreed that their chosen tribunal is the sole judge of fact they cannot expect the court to review the evidence in order to form a view as to whether, as is likely to be the case, the tribunal has regarded the evidence as unhelpful (for one or more reasons) or, as is unlikely to be the case, the tribunal has ignored or overlooked the evidence. As was noted by the DAC in its report (paragraph 280) “the test is not what would have happened had had the matter been litigated. To apply such a test would be to ignore the fact that the parties have agreed to arbitrate, not litigate.” Were the court able to scrutinise the content or quality of a tribunal’s reasons the court would have something akin to a general supervisory jurisdiction over arbitrations which it does not have. Such scrutiny would frustrate one of the principal purposes of the Arbitration Act 1996 which was, as explained in Lesotho, to limit the court’s intervention in arbitration. As Tomlinson J. said in ABB AG v Hochtief Airport, at paragraph 80, a tribunal’s reasons may be “unsatisfactory” but that is not a serious irregularity within section 68. “It is not for this court to tell an international commercial tribunal how to set out its award or the reasons therefor.”

Whereas the Court of Appeal may, in certain albeit limited circumstances, review findings of fact by a judge the court has no comparable power of review in respect of an arbitral tribunal. This is an important distinction between litigation and arbitration and helps to explain why the Court of Appeal can comment on the content or quality of a judge’s reasoning, whereas the court cannot comment upon the content or quality of an arbitral tribunal’s reasoning.

In the present case the complaint made by the Grigorishin Respondents is not in reality about the reasons. The complaint is about an inference which it is said can be drawn from the reasons. The complaint is that the absence of reference in the reasons to evidence regarded as key by the Grigorishin Respondents enables the court to infer that that the Tribunal, in breach of its duty to act fairly, overlooked that evidence.

The Tribunal reached a clear conclusion as to the existence of the Illicit Scheme. Whilst some of the evidence relied upon by the Grigorishin Respondents was not referred to by the Tribunal (see above under Grounds D2, D3 and D4) the Tribunal gave detailed reasons for its conclusion. The Tribunal expressed its reasons in Section F of the award over 26 paragraphs (see paragraphs 164-190 of the Award). The Grigorishin Respondents disagree with this conclusion but the Tribunal plainly applied its collective mind to the essential issue, was there an Illicit Scheme, and concluded that there was. Similarly the Tribunal applied its collective mind to the question whether the Claimants had acted oppressively by procuring the resignation of their nominated directors and concluded that they did not. Although evidence relied upon by the Grigorishin Respondents was not referred to (see above under Ground E3) the Tribunal gave it reasons for its conclusion between paragraphs 234 and 241 (and see also paragraphs 163 and 190). Thus with regard to the issues in respect of which the Tribunal did not refer to evidence relied upon by the Grigorishin Respondents the Tribunal without doubt decided those issues and gave its reasons for doing so.

The question which Mr. Brisby invited the court to consider is whether the amount of evidence said by the Grigorishin Respondents to be crucial but not referred to by the Tribunal was such as to make the present case an exceptional case such that the court could properly infer that the Tribunal had failed in its duty to deal with the case fairly. Instead of considering evidence relied upon by the Grigorishin Respondents it had overlooked that evidence.

The Judges of the Commercial Court see many arbitration awards when considering challenges pursuant to sections 67 and 68 (in court) and to section 69 (both on paper, when considering applications for permission to appeal, and in court, when permission has been granted). In circumstances where it is well established that arbitrators, in order to discharge their duty to deal with a case fairly, do not have to refer to every piece of relevant evidence it is often the case that a tribunal does not refer to all of the relevant evidence to which it was referred, though sometimes tribunals do. The Award is therefore not exceptional in that regard. In the present case it is said that crucial evidence was not referred to. That was also said in Sonotrach and in New Age and so, again, the Award is not exceptional in that regard. It is not possible to compare the extent of the evidence to which no reference was made in the present case with the extent of the evidence to which no reference was made in Sonotrach and New Age. But assuming that it is greater (even much greater) I am not persuaded that, in circumstances where the Tribunal has given a reasoned conclusion on the essential issues, the present case can be described as exceptional. Moreover, this was a complex case in which the parties relied upon a considerable body of evidence. The many files which were before the Tribunal were displayed behind me in court. It is not surprising or exceptional that in such a case the losing party can identify several “chunks” of evidence relied upon by it to which the Tribunal made no reference in its award. The Tribunal was not obliged to refer to all of the evidence alleged by the Grigorishin Respondents to be crucial, though it could have done so had it wished to do so.

My understanding of Mr. Brisby’s submission is that he invited the court to infer from the extent of the “crucial” evidence not referred to that the evidence must have been overlooked by the Tribunal (rather than considered and rejected by the Tribunal as immaterial, unreliable or not determinative in the light of other evidence). It is improbable that a distinguished and experienced tribunal such as that in the present case overlooked substantial tranches of the evidence relied upon by the Grigorishin Respondents. But in any event, for the reasons I have given, such an inference cannot safely be drawn. The Tribunal may simply have had a different view of the evidence considered by the Grigorishin Respondents (or indeed by the court) to be crucial. Further, where a tribunal has overlooked evidence that might show that its finding was “wrong”. It would not, by itself, show that that there had been a failure of due process or a serious irregularity within section 68.

Mr. Brisby in his written submissions referred to a passage in the Grounds of Challenge and to the evidence of Mr. Sciannaca which stated that it was the “strong suspicion” of the Grigorishin Respondents that the Tribunal, having determined at an early stage of the hearing or in their deliberations to hold against them, when preparing their Award ignored or otherwise chose not to deal with any potentially difficult points of evidence or submission. It is to be noted that the point is put by way of “suspicion”. At another point in his written submissions Mr. Brisby referred to the “appearance” that the Tribunal, having determined to make findings in favour of the Claimants, avoided dealing with potentially difficult points of evidence or submission that undermined those findings. It was not submitted that the Tribunal, by reason of a view formed at an early stage, in fact acted in the surprising manner suggested, which is akin to being biased in favour of the Claimants. (There is a passage at the very end of the written submissions where reference is made to the Tribunal “having already made up its mind” but that passage was dealing with the remedy and cannot fairly be regarded as elevating a suspicion into an actual case.) This is an example of a party “being willing to wound, and yet afraid to strike” (from the oft-cited lines of Alexander Pope). It is, at the least, deeply improbable (I would say, impossible to suggest) that the Tribunal acted in the manner suggested. Unless there are grounds to make such an allegation the matter should not be referred to by way of “suspicion”. There are no such grounds in the present case, as is evident from the fact that the point is only made by way of “suspicion”.

For these reasons I have concluded that the court is unable to conclude that there has been a failure by the Tribunal to act fairly pursuant to section 33 of the Act.

The Tribunal’s findings on the essential issues, together with its reasoning, are set out, as concisely as the complex nature of the dispute allowed, between paragraphs 112 and 242 of the Award and are summarised at paragraph 260. The findings are, in the main, against the Grigorishin Respondents. That is obviously disappointing to them but, in the absence of a serious irregularity within section 68 of the Arbitration Act 1996, the Grigorishin Respondent have agreed to bound by the Tribunal’s findings. As has often been said an application pursuant to section 68 should not be used to disguise what are in truth challenges to the Tribunal’s findings of fact.

For these reasons the section 68 challenge must be dismissed.