English Commercial Court Dismisses Jurisdiction and Bias Challenges to LMAA Award: V & Anor v K

In V & Anor v K [2025] EWHC 1523 (Comm), the Commercial Court has dismissed jurisdictional and serious irregularity challenges under sections 67 and 68 of the Arbitration Act 1996 arising out of an LMAA arbitration. The judgment confirms the high threshold for setting aside arbitral awards, and offers guidance on arbitrators’ disclosure obligations, apparent bias and procedural fairness in LMAA arbitrations.

The background

The dispute arose out of a Memorandum of Agreement (the MOA) for the sale of a vessel by the Defendant (K) to the Claimants (V and their nominee N) for US$13.1 million. Following the imposition of sanctions on V in September 2022, K terminated the MOA and sought release of a US$1.965 million deposit held in escrow by K’s solicitors (the Deposit). V and N counterclaimed, arguing that as the MOA had been novated to N, who was not subject to sanctions, K’s termination constituted a repudiatory breach.

An LMAA Tribunal issued a Partial Final Award in August 2024 in favour of K, awarding it the Deposit and dismissing the Claimants’ counterclaims (the Award). V and N challenged the Award under sections 67 and 68 of the Arbitration Act, alleging lack of jurisdiction and serious procedural irregularity. 

Key issues before the Court

1. Did the Tribunal lack jurisdiction under section 67 of the Arbitration Act 1996 due to an alleged repudiatory breach of the arbitration agreement?
2. Should the Award be set aside under section 68 of the Arbitration Act 1996 for serious irregularity due to apparent bias?
3. Did the procedural missteps in service of the claim form warrant retrospective validation or relief from sanctions?

Court retained jurisdiction despite alleged repudiatory breach of appointment contract 

The Claimants argued that the Tribunal had lost jurisdiction after the Claimants purported to terminate the arbitrators’ appointments for bias. 

The Court rejected this, finding that the Tribunal had acted with ‘impeccable fairness’ and retained jurisdiction throughout, stating that the challenge under section 67 was ‘hopeless in any event’. The Court also noted that some of the procedural decisions cited by the Claimants as evidence of bias often acceded to the Claimants’ own requests, and which the Claimants then failed to comply with. 

Apparent bias was not found

The Claimants alleged that the failure of the Defendant’s party-appointed arbitrator, Mr H, to disclose 14 prior arbitral appointments by the Defendant’s solicitors over a period of five years, gave rise to a real possibility of bias. 

The Court held that no duty of disclosure arose in these circumstances under LMAA practice. It is established custom in LMAA arbitrations for law firms to appoint arbitrators repeatedly in unrelated arbitrations, such that disclosure of those appointments is not required (absent special features rendering disclosure necessary).  

It was held that even if a duty to disclose had existed, the fair-minded and informed observer would not conclude that there was a real possibility of bias in this instance. The Tribunal’s procedural decisions were unanimous and fair, and Mr H’s appointments by the Defendant’s solicitors represented only 16% of his total appointments and 8% of his arbitral income over the relevant period. 

No relief from sanctions 

A key issue in the case was limitation: the Claimants failed to properly serve their arbitration claim form within the 28-day deadline set by section 70(3) of the Arbitration Act 1996. Although they issued the claim in time, they did not serve it correctly and sought retrospective validation under CPR 6.15 and 3.9. 

The Court refused to validate service under CPR 6.15 or grant relief under CPR 3.9 emphasising that the Claimants’ procedural failures were serious. They gave rise to the expiry of the limitation period and ‘arose as a result of carelessness on the part of the Claimants.’ The application for relief itself was not even made promptly.

Practical considerations

• High threshold for section 67 and 68 challenges: The Court reaffirmed that challenges to arbitral awards will only succeed in exceptional circumstances, and that ‘tactical’ or ‘opportunistic’ claims of bias will fail.
• No duty to disclose repeat appointments in LMAA arbitrations: The judgment recognises that in the context of LMAA practice, repeat appointments by the same law firm for unrelated arbitrations is customary, and as such will not automatically require disclosure.
• Importance of complying with procedural rules: The Court took a strict approach to service and relief from sanctions, particularly where limitation periods were concerned and the failures were persistent. It is a reminder that the Court values procedure and will not provide relief for procedural failures lightly.  

Conclusion

The decision in V & Anor v K points towards a difference in approach taken in industry-specific arbitrations, such as the LMAA, towards repeat appointments and disclosure. Unlike in the ICC, where repeat appointments may more readily give rise to issues of apparent bias (for example in Aiteo Eastern E & P Company Limited v Shell Western Supply and Trading Limited and others [2024] EWHC 1993 (Comm)), the Court affirmed that such appointments are an “accepted feature” of LMAA and GAFTA practice and will not, without more, require disclosure.

This divergence highlights that the threshold for apparent bias in arbitration is context-dependent, and that industry standards, as well as the relevant arbitral rules, will be taken into consideration. Further judicial guidance will be essential to clarify how these thresholds should be applied across different sectors.

The authors would like to thank Tara Cavan for their assistance with preparing this article.