AVELLUM’s client defeats a challenge to a USD20 million LCIA Award with the UK High Court

In a Judgment dated 20 January 2023, the UK High Court dismissed each of the four grounds of challenge to the award made under s. 68 of the Arbitration Act 1996. The full version of the decision is available via the link.

The judgment resolves the ambiguity created by P v D [2019] EWHC 1277 on applicability of the rules on cross-examination set out in Browne v Dunn [1894] 6 R 67 in international arbitration seated in London. The relevant rule stipulates that where a party intends to lead evidence that will contradict or challenge the evidence of an opponent’s witness, it must put that evidence to the witness in cross-examination.

With reference to, among others, a famous quote from Edwards Lifesciences LLC v Boston Scientific Scimed Inc [2018] EWCA Civ 673 that “the days of “I put it to you” cross-examination … have long [been] gone,” the Court held that even in proceedings in court, the rule in Browne v Dunn is not “an inflexible one, or one which does not admit of exceptions.”  

The Court explained that this is the issue of fairness not only to witnesses, but also to the parties. Whilst fairness usually requires to challenge the witness, where he or she gives evidence and the court is asked to disbelieve it, there may be cases in which there will be no unfairness. For example, where (a) the procedures adopted in the litigation indicate that a party and the relevant witness(es) have had ample opportunity to comment on the other side’s case; or (b) it is obvious from other evidence of the relevant witness(es) as to what his or her response will be. Furthermore, the extent to which there needs to be cross-examination may depend on the procedures which have been adopted by the court (for example in setting time limits for cross-examination).

Applying this rule to the arbitration proceedings, the Court noted that the tribunal is likely to have a wide discretion as to how to conduct proceedings.

This allows the tribunal, subject to compliance with its duty to act fairly and impartially between the parties, to “adopt a procedure which does not involve oral cross-examination of witnesses, whether on a particular point or at all,” including where a witness is not telling the truth. However, in some cases – presumably, similar to P v D [2019] EWHC 1277, where a witness was not cross-examined on a core issue on which the tribunal based its decision – fairness will necessitate cross-examination.

Traditionally for s. 68 challenges, the Court reiterated that the test of a serious irregularity giving rise to substantial injustice involves a high threshold and it is deliberately so “to reduce drastically the extent of intervention by the courts in the arbitral process.”

Kostiantyn Likarchuk, a senior partner, commented: “We are pleased with the outcome of this challenge, which underscores London’s lead as a worldwide arbitration center. UK Courts are (rightly) reluctant to intervene with the arbitral process. We are of the view that the Judgment would be of interest not only to our clients, but to a wider arbitration community in London and overseas when considering to pick London as a seat of arbitration.”

AVELLUM team in this challenge was led by senior partner Kostiantyn Likarchuk and senior associate Mariana Antonovych with significant support from counsel Oleksii Maslov and associates Kristina Mysenko, Viktoriia Tolochko and Nelli Kichigina.