The English commercial court set out the limited basis on which an arbitration award can be set aside when it is alleged that evidence of fraud that would have affected the decision only came to light after the award. The merits of an arbitration award are rarely reviewed. Public policy exceptions such as fraud can be invoked but only in a clear case and with extreme caution.
When considering whether an award has been obtained by fraud, nothing short of reprehensible or unconscionable conduct suffices to give the court a discretion to deny recognition or enforcement of the award.
There are two important conditions.
- First, the evidence to establish the fraud must not have been available to the party at the time of the hearing had they used reasonable diligence to discover the evidence.
- Secondly, where perjury is alleged, which is the very issue before the arbitrators, namely whether the witnesses were lying, the evidence must be so strong that it would probably have been decisive at a hearing.
In this particular matter the challenge to enforcement failed because neither condition was met. The award of USD145 million could not be challenged.
The case is Carpatsky Petroleum Corporation v PJSC UKRNAFTA [2018] EWHC 2516 (Comm).
