Arbitration Act 1996: Section 67 and section 68 challenges in the English Commercial Court
Sections 67 and 68 of the Arbitration Act 1996 (“AA 1996”) have long been the main escape valves for aggrieved parties in English-seated arbitrations. Section 67 permits challenges to awards based on substantive jurisdiction. Section 68 permits challenges based on serious irregularity affecting the tribunal, the proceedings or the award. These applications are notoriously difficult and have a very low success rate in the English Commercial Court. This is widely considered to reinforce the finality and efficiency of English-seated arbitrations and awards. By the Arbitration Act 2025 (“AA 2025”), section 67 has been amended as far as the scope of admissible evidence and the remedial powers of the court are concerned. These are significant amendments which are consistent with the strict approach of the English courts. There are also amendments affecting Section 68, but these are less far-reaching. Parties must be careful to avoid the impression that they are simply re-running merits arguments on which they lost in the arbitration. Dressing up merits arguments under the guise of jurisdiction or procedure will not do. Any credible section 67 or section 68 must be carefully tailored and focused. In the majority of cases, there will, on proper analysis, be no viable challenge.
History of the provisions
Sections 67 and 68 are concerned with issues of jurisdiction and serious procedural irregularity. They are mandatory provisions of the AA 1996. They sit alongside section 69 which permits appeals on points of law in limited circumstances. Importantly, section 69 is a non-mandatory provision and therefore can be dispensed with by agreement. This is frequently the case in English-seated arbitrations, including as a result of institutional rules. Consequently, sections 67 and 68 are the usual avenues of challenge for aggrieved parties. The strict requirements of these provisions and the manner in which they have been interpreted and applied by the English Commercial Court have meant the statistical success rate of section 67 and 68 applications is very low. The latest statistics released in the Commercial Court Report for 2023-24 demonstrate that 24 section 67 applications and 37 section 68 applications were made in the legal year 2023-24. Of those which have been determined, only one section 67 application has been granted and no section 68 application has succeeded from this batch. While there are notable examples like the judgment of Robin Knowles J in Nigeria v Process & Industrial Developments Limited [2023] EWHC 2638 (Comm) concerning an award procured by bribery and corruption, by and large, successful section 68 applications arise in the rarest of the rare cases. The success rate on both section 67 and 68 applications has hovered around the 5% mark for a number of years, reflecting the very strict approach taken by Commercial Court judges. The Commercial Court Report also indicated an increase in section 67 and 68 applications, as well as other arbitration-related matters in the Commercial Court (including section 44 applications for interim relief and section 69 appeals). Relatedly, there were 52 section 69 appeals in this period. Only one of the appeals determined by the time of the Commercial Court Report was successful.
Amendments in Arbitration Act 2025
As noted above, the AA 2025 has amended both sections 67 and 68 AA 1996. The amendments to section 67 are more likely to have a noticeable impact on section 67 applications than the amendments to section 68.
The new section 67 (which is to enter into force on a date to be appointed) includes in sub-section (3C) (introduced by section 11 AA 2025) provision for rules of the Court to provide as follows, “subject to the court ruling otherwise in the interests of justice”:
“(a) a ground for the objection that was not raised before the arbitral tribunal must not be raised before the court unless the applicant shows that, at the time the applicant took part in the proceedings, the applicant did not know and could not with reasonable diligence have discovered the ground;
(b) evidence that was not put before the tribunal must not be considered by the court unless the applicant shows that, at the time the applicant took part in the proceedings, the applicant could not with reasonable diligence have put the evidence before the tribunal;
(c) evidence that was heard by the tribunal must not be re-heard by the court.”
In simple terms, the effect of the new section 67(3C) and amended Civil Procedure Rules which are expected to implement this provision is to reverse the decision of the UK Supreme Court in Dallah Real Estate & Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2010] UKSC 46, in which it was held that section 67 challenges had to proceed by way of a full re-hearing. The amended section 67 narrows the arguments and evidence which the Commercial Court may consider on such an application, subject to what may loosely be described as Ladd v Marshall principles concerned with what could have been discovered with reasonable diligence as far as evidence is concerned.
Other amendments to section 67 introduced by section 10 AA 2025 concern the phrasing of section 67(1)(b) and the remedial powers of the court on a section 67 application. Section 67(3) and (3A) now provides:
“(3) On an application under this section, the court may by order—
(a) confirm the award,
(b) vary the award,
(c) remit the award to the tribunal, in whole or in part, for reconsideration,
(d) set aside the award, in whole or in part, or
(e) declare the award to be of no effect, in whole or in part.
(3A) The court must not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.”
This is substantially more prescriptive than section 67(3) in its original form and limits the court’s ability to set aside awards under section 67.
In light of these amendments, the temporal scope of the amended section 67 is plainly relevant. For example, in the recent case of MSH Ltd v HCS Ltd [2025] EWHC 815 (Comm), Foxton J acknowledged that the position in relation to that application remained as before, i.e. the application proceeded by way of re-hearing, though the parties had agreed to proceed on the basis of the evidence available before the tribunal on the facts. The same applies to the court’s remedial powers. Whether a section 67 application is made under the old rules or the new rules will certainly affect the approach, and may make a difference to the outcome.
Section 68 itself has not been amended by the AA 2025, but there are amendments to related provisions of the AA 1996 affecting this provision (and section 67). In particular, by section 12 of the AA 2025, the time limits for challenges under inter alia sections 67 and 68 set out in section 70 AA 1996 have been amended to run from “the applicable date” rather than “the date of the award”. The new concept of “applicable date” reflects parallel processes which may apply after an award is issued. The definition is as follows:
“(a) in a case where there has been any arbitral process of appeal or review, the date when the applicant or appellant was notified of the result of that process;
(b) in a case where the tribunal has, under section 57, made a material correction to an award or has made a material additional award, the date of the correction or additional award;
(c) in a case where a material application for a correction to an award or for an additional award has been made to the tribunal under section 57 and the tribunal has decided not to grant the application, the date when the applicant or appellant was notified of that decision;
(d) in any other case, the date of the award.”
This is a welcome modernisation of the regime in relation to sections 67-69 AA 1996.
Concluding remarks
While there is a reported uptick in both section 67 and section 68 applications, the success rate remains very low. The amendments to section 67 in particular will only serve to maintain the status quo (once they are in force). Parties to English-seated arbitrations must enter the arena with that firmly in mind: a second bite at the cherry is rarely entertained in the Commercial Court and jurisdiction challenges can no longer be run on a re-hearing basis unless the court decides to do so by way of exception. Finality and efficiency remain at the forefront of English-seated arbitrations and the Commercial Court continues to approach its supervisory function in that light.
