The Secretary of State for the Home Department v Raytheon Systems Ltd
2014
TECHNOLOGY AND CONSTRUCTION COURT
UK
CORAM
- MR JUSTICE AKENHEAD
Areas of Law
- Alternative Dispute Resolution
- Contract Law
2014
TECHNOLOGY AND CONSTRUCTION COURT
UK
CORAM
AI Generated Summary
Y terminated a high-value technology contract with Z, leading to arbitration where Y was found to have breached the contract, resulting in significant damages awarded to Z. Y challenged the award in the High Court, citing serious irregularities. The High Court partly upheld Y's challenge, identifying the tribunal's failure to address issues about Y's responsibility for delays and the unjust enrichment evaluation for Transferred Assets. The judgment highlighted the need for tribunals to address all critical issues and the substantial injustice arising from the tribunal's omissions.
JUDGMENT
Mr Justice Akenhead:
Given confidentiality considerations and the fact that the application under review is made under the Arbitration Act 1996 and relates to a confidential arbitration, I initially ordered that the identities of the parties were not to be disclosed (subject to any application otherwise), they being referred to as Y and Z. I sought therefore to be as circumspect as is appropriate in the drafting of this judgment. Since the handing down of this judgment on 19 December 2014, the parties later agreed that this judgment can be handed down publicly. I will still below refer to the Claimant as “Y” and the Defendant as “Z”. HS means the Home Secretary
Z was employed by Y under a contract (“the Agreement”) made some years ago to design, develop and deliver very substantial technology systems. The likely value of the Agreement was a high nine figure sum, if not more. The Contract was purportedly terminated in July 2010 by Y. Issues arose relating to the responsibility for such termination and Y instituted arbitration proceedings with the arbitrators being English and American (nominated by Y and Z respectively) and the chairman being Canadian. The arbitrators produced their lengthy Partial Final Award on 4 August 2014, albeit corrected by memorandums dated 18 August and 29 September 2014. In broad terms that Award decided that Y had unlawfully terminated the Agreement, dismissing Y’s money claims, that Y had repudiated the Agreement and that Z had accepted that repudiation. The arbitrators awarded damages to Z which included £126,013,801 for what was known as claim A4 - Transfer of Assets. Other sums awarded totalled £59,581,658 plus some interest.
Y seeks to have the Partial Award set aside and declared to be of no effect. Y relies on Section 68(2)(d) of the Arbitration Act 1996 on the grounds of "serious irregularity" affecting the tribunal or the award on the basis of “ failure by the tribunal to deal with all the issues that were put to it”, those issues relating to what Y articulates as important parts of its case on liability and on quantum in relation to Claim A4. These relate to two associated issues on liability and three on quantum. In broad terms, the tribunal’s failure in relation to liability is said to have been to disregard key parts of Y’s case in relation to contractual default by proceeding only to address whether there was breach by Y of a condition precedent in the termination clause and in relation to quantum to ig