The Commercial Court has refused a challenge to an arbitral award brought on the basis of the tribunal’s award of the costs of third party funding to the successful party, finding that it did not constitute a serious irregularity under s68 of the 1996 Arbitration Act: Tenke Fungurume Mining SA v Katanga Contracting Services SAS  EWHC 3301 (Comm).
The court reached a similar view a few years ago in Essar Oilfields Services Ltd v Norscot Rig Management PVT Ltd  EWHC 2361 (Comm) (considered here). These decisions highlight the English courts’ reluctance to second-guess the discretionary exercise of tribunal powers (including to award costs), with the court emphasising that it “should be extremely slow to interfere with these discretionary procedural decisions”.
The decisions also highlight an important distinction between the costs that have been successfully awarded to date in English-seated arbitrations and those in English court proceedings where litigation funding costs are not recoverable under the relevant CPR provisions. That may of course be seen as an advantage or disadvantage depending on a party’s perspective.
Interestingly, however, the latest decision leaves open the question of whether it may be possible to challenge such a decision for an error of law under s.69 of the Act, where the parties have not excluded such challenges by agreement. For more information, please see this post on our Arbitration Notes blog.