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ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms

An arbitrator in a commercial dispute between Esmo Ltd and Farrow Ltd issued an award in favour of Esmo. Farrow believes the arbitrator misunderstood the evidence on the facts and wants to appeal on that basis. Which is the correct general position?

Farrow generally cannot challenge the award merely because the arbitrator misjudged the facts. Arbitration is designed to give a final, binding outcome, and courts intervene only in limited situations such as serious procedural irregularity or lack of jurisdiction, not simple disagreement with factual findings.

  1. AA challenge on the mere ground that the arbitrator got the facts wrong is generally not available, as court intervention in awards is limitedCorrect
  2. BFarrow has an automatic right of appeal to the courts on any question of fact
  3. CFarrow may ignore the award because it is not legally binding without Esmo's later consent

Explanation

Arbitration offers finality, and courts intervene only in limited circumstances such as serious irregularity, lack of jurisdiction or, in some systems, a point of law. Disagreement with findings of fact is not enough. Awards are binding and enforceable, so option C is wrong.

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