Failure to Comply With Order Means Loss of Right to Present Oral Evidence

October 17, 2018

Failure to Comply With Order Means Loss of Right to Present Oral Evidence

When attempting to negotiate any dispute it is important to assemble fully your arguments, so that you can state your case with the greatest vigour, and to comply with any directions issued by the tribunal.

This is also true when a dispute is being arbitrated, as a recent case shows.

When an accountant fell out with his two partners, they went to arbitration by tribunal to resolve the issues arising on the dissolution, with the result that the arbitrator awarded the two remaining partners more than £950,000 plus costs. The ex-partner had not been fully cooperative with the arbitration process and had failed to comply with an order to provide a 'security' (cash deposit) for his claim, and the arbitrator issued a 'pre-emptory order' to that effect.

This was challenged by the disgruntled former partner, who claimed that the decision was the result of a serious irregularity because the arbitrator had not permitted an oral hearing to take place. In a prior arbitration, the ex-partner had requested removal of the arbitrator on the grounds of potential bias and alleged procedural irregularities. In the circumstances, the arbitrator decided to proceed with the arbitration on the basis of the materials that had been properly put before the tribunal by the two parties and allowed them time to provide any further information sought by the arbitrator.

When this decision was challenged, it fell to the Commercial Court to rule on whether the process was valid. In this case, the Court decided that it was. The failure of the claimant former partner to comply with the pre-emptory order after having agreed that the dispute would be fully arbitrated meant he had sacrificed his right to an oral hearing.