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

Gamma Co and Delta Co agreed to arbitrate. After the award, Gamma Co claims the arbitrator wrongly interpreted the contract and wants to appeal the decision on the merits to the national court. Under the general principles of arbitration, what is the most likely outcome?

The appeal will probably fail. Arbitral awards are generally final and binding, and courts only step in on limited grounds such as serious procedural irregularity or lack of jurisdiction, not simply because a party disagrees with the arbitrator's reasoning.

  1. AThe court will accept the appeal as of right, because every award can be appealed on the facts
  2. BThe appeal will fail, because awards are generally final and courts can only intervene on limited grounds such as serious procedural irregularityCorrect
  3. CThe appeal will succeed, provided Gamma Co pays the court fees

Explanation

Finality is a key feature of arbitration. Courts will not usually reconsider the merits of an award and intervene only in limited circumstances, such as serious irregularity or lack of jurisdiction. A mere disagreement with the arbitrator's interpretation is not enough.

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