In Eagle Bulk PTE LTD (now Star Bulk (Singapore) PTE LTD) v Traxys North America LLC [2026] EWHC 518 (Comm), the Commercial Court (Butcher J) dismissed an application by the Claimant (Owners) under ss. 68(2)(a) and (d) of the Arbitration Act 1996 (the “1996 Act”) to challenge an arbitration award dated 7 July 2025 for serious irregularity causing substantial injustice. In doing so, the judge affirmed that an applicant relying on s. 68 has a high threshold to surmount, and bears a heavy burden to prove a serious irregularity.
The underlying claims arose out of a voyage charter for the MV Canary by which the Defendant (Charterers) chartered the vessel from the Claimant to carry a cargo of petcoke from ports on the east coast of India to New Orleans, USA. The petcoke was stored in cargo holds 2-5 of the vessel.
Upon arrival at New Orleans, hold 4 was discovered to be flooded, and water was also observed in holds 2, 3 and 5. Discharge of the cargo was consequently disrupted. The Owners contended that the petcoke had been loaded with excessive moisture content and that the Charterers ought therefore to pay, amongst other things, demurrage. The Charterers’ position was that leaking and defective valves in the vessel’s bilge system had caused water to ingress and so demurrage was not payable, and furthermore, that the Owners ought to compensate it for the shortage of petcoke cargo unloaded based on the difference in weight between the petcoke cargo recorded as loaded and that recorded by the truck weighbridge scales after discharge.
The Tribunal held in favour of the Charterers on both counts:
- The effective cause of the delays was the ingress of water, particularly into hold 4, via leaking and defective valves in the vessel’s bilge system.
- The Owners were liable for the shortage claim.
The Owners sought, pursuant to s. 68, to challenge both findings on the following two grounds:
- That the Tribunal had determined the issue of effective cause on the basis of an argument on the interpretation of a specific document which had not been made by either party and which contradicted the common ground between them. The Owners contended that, for the purposes of s. 68(2)(a), this constituted a failure by the Tribunal to comply with its s. 33 duty under the 1996 Act to “act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent”.
- That the Tribunal had failed, for the purposes of s. 68(2)(d), to determine several issues that were put to it in relation to the Charterers’ shortage claim, including the arguments that the Charterers could not establish that any reduction in the weight of the cargo on discharge was causative of any losses or would not have been incurred irrespective of any breach by the Owners.
On the first ground, Butcher J held that the Owners’ complaint fell “markedly, short of establishing a serious irregularity”, and that what the Owners effectively sought to do by its application was to appeal the Tribunal’s findings of fact, which was not a legitimate use of a s. 68(2)(a) application: §15. The judge further determined that the Tribunal was not bound by the cases of the parties as to what the specific document meant, and that it was “very frequently” the case that a tribunal may interpret a document in a way which does not exactly accord with the contentions of the parties: §18. It was not unfair for the Tribunal not to have notified the parties of the interpretation which it would be putting on that particular document. Accordingly, there was no serious irregularity nor, even had there been, any substantial injustice resulting.
On the second ground, Butcher J restated the proper approach under s. 68(2)(d), including the distinction to be drawn between, on the one hand, ‘issues’ where the whole of the applicant’s claim could have depended on how it was resolved and, on the other hand, ‘arguments’, ‘points’, ‘lines of reasoning’ or ‘steps’ in an argument. Citing the decision in Secretary of State for the Home Department v Raytheon Systems Ltd [2014] EWHC 4375 (TCC), the judge stated that so long as a tribunal has dealt with the issue in any way, s. 68(2)(d) is inapplicable and it does not matter that the tribunal has dealt with it well, badly or indifferently. In the present case, as the Tribunal had indeed dealt with the ‘issue’ of the cargo shortage, the Owners’ application under s. 68(2)(d) fell to be dismissed.
(In addition to the two grounds above, the Owners had also brought a further challenge under s. 68(2)(d) which it withdrew before the hearing; and an appeal on the law under s. 69 of the 1996 Act, which leave to appeal was refused by Foxton J (as he then was) on the papers in an order dated 13 November 2025.)
The result was that the Owners’ application to challenge the Tribunal’s award was dismissed in its entirety.
Andrew Pearson and Joshua S.K. Fung were instructed by Stephen Askins of Tatham & Co for Traxys (the successful Charterers) in both the arbitration and the application.
To view a copy of the judgment, dated 9 March 2026, please click here.
