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

Epsilon Ltd and Zeta Ltd agreed to arbitrate any dispute. After the arbitrator issues an award, Epsilon Ltd, the losing party, argues the arbitrator misunderstood the law and wants the court to reconsider the case. Under the general approach to arbitration, which ground would be most likely to justify a court setting aside the award?

Proof of arbitrator bias or serious procedural irregularity is the likely ground for setting aside an award. Courts do not review arbitral awards on the merits, so disagreement with findings of fact, law or the amount awarded is not sufficient.

  1. AThe arbitrator reached a conclusion on the facts that Epsilon Ltd disagrees with
  2. BThe arbitrator applied a legal rule that Epsilon Ltd considers wrong
  3. CThe arbitrator was shown to have been biased, or serious procedural irregularity occurredCorrect
  4. DThe award was lower than the amount Epsilon Ltd expected to pay

Explanation

Courts intervene in arbitration only for limited reasons such as bias, lack of jurisdiction or serious irregularity. Disagreement over facts, law or amount is not enough because awards are generally final and not appealed on the merits.

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