In a rare move, the English High Court has set aside an arbitration award after finding that the tribunal lacked jurisdiction, offering a significant reminder of the limits of arbitral authority under the Arbitration Act 1996.
The case, A1 and others v P, involved a challenge brought under section 67 of the Act, which allows parties to contest an arbitral tribunal’s jurisdiction. The claimants argued that a London Court of International Arbitration (LCIA) tribunal had no authority to decide the dispute, despite having already issued an award. The court ultimately agreed, marking one of the few successful jurisdictional challenges under the provision.
Central to the dispute was whether a solicitor had the implied authority to bind clients to contractual arrangements with third parties, including agreements that could give rise to arbitration. The tribunal had previously concluded that such authority existed, allowing it to assume jurisdiction. But the High Court took a different view, scrutinizing the scope of agency more closely and rejecting the assumption that legal representatives automatically possess broad authority to commit clients to binding agreements of this nature.
The ruling also addressed section 73(1) of the Arbitration Act, which can prevent parties from raising jurisdictional objections if they fail to do so promptly. The court examined whether the claimants had lost their right to object by participating in the arbitration but found that, in this case, their challenge could proceed.
Legal experts say the decision underscores the importance of carefully assessing jurisdictional issues at the earliest stages of a dispute. While arbitration is often seen as final and binding, the judgment highlights that courts remain willing—albeit rarely—to intervene where a tribunal oversteps its authority.
The case is expected to influence how parties and their legal advisers approach arbitration agreements, particularly in ensuring that authority to enter such agreements is clearly established from the outset.