FRAUDULENT DOCUMENTS – EPISODE 5

Written by Graham Perry

Graham Perry M.A. Cantab FCIArb Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer

9 May 2022

ARBITRATION #218

The Board have considered the issue of damages in the light of credible evidence from Board appointed handwriting expert that Buyers had included in their bundle of documents on Damages, three documents that had been adulterated. Buyers submitted that the Board should disregard the three documents and reach their final conclusion on damages of the remaining 124 pages of documents. The Board does not agree.
 
It is the view of the Board that parties to an arbitration owe a duty of good faith to the arbitral body, to the arbitrators and to all parties to an arbitration. That duty is broken if a party relies on documents that are found to be adulterated. The Board concludes that by relying on adulterated documents, Buyers sought to mislead the Board and Sellers as to the true position of the market regarding market price and thereby breached their duty of good faith in this arbitration and that being the case the Board FINDS that Buyers are not entitled to damages in this appeal.
 
AWARD
 
The Board AWARDS that Buyers SUCCEEDS on liability
 
The Board further AWARDS that Buyers FAIL on damages
 
The Board AWARDS that the costs of the arbitration  – being the Associations’ administrative costs and the fees and expenses of the Board – shall be paid by Buyers.”
 
Buyers will seek advice from their lawyers about the likelihood of a successful application under S 68 of the 1996 Act on grounds of a serious irregularity by the Board that will cause substantial injustice to Buyers. It is acknowledged that but for the reliance on adulterated documents, Buyers would have been awarded substantial damages and this being the case there is no dispute that if the Board are wrong in their findings then Buyers have suffered a substantial injustice. But did the Board act irregularly?
 
Feel free to have your say – especially on costs or on the obligation to act in good faith – no names will be quoted.

TOMORROW – 10 MAY 2022 – A NEW MEDIATION DISPUTE

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