Successful challenge to arbitral award for serious irregularity: practical takeaways for arbitrators and parties

The Commercial Court has done something rare: in Indus Powertech Inc. v Echjay Industries Private Limited [2026] EWHC 827, it set aside part of an international arbitral award for serious irregularity under section 68 of the Arbitration Act 1996. The Court held that an ICC tribunal had failed to deal with two issues that had been put to it, in a way that caused substantial injustice, and it remitted those issues back to the tribunal for reconsideration. 

CMS’ own previous analysis has shown that the success rate for such challenges is only 4%, so the decision is a helpful, practical illustration of some of the narrow but important circumstances in which the courts will intervene in a tribunal’s decision. It also contrasts with statistics from The Commercial Court Report 2024–2025, published in March 2026, which show that between 2024-2025 no appeals pursuant to section 68 of the Arbitration Act 1996 had been successful. 

In our analysis of the Court’s decision, we identify the key practical takeaways for parties and arbitrators looking to ensure that their awards do not fall foul of section 68 in the same way. 

Background

Indus, a US-based engineering component supplier, and Echjay, an Indian forgings manufacturer, were parties to a master supply agreement under which Echjay was the exclusive supplier of forgings from India to Indus’s customers in North America. The agreement was governed by Indian law with ICC arbitration seated in London. 

Disputes arose and Echjay terminated the agreement. In the ensuing arbitration, Echjay claimed close to US $18 million in damages, alleging that Indus had breached a non-compete clause by sourcing forgings from a rival Indian supplier. The tribunal found Indus in breach, but limited the damages period to two years and awarded Echjay US$4.1 million in lost profits across six product lines – two shafts, two gear pinions and two gear rings. The award ran to 308 pages. 

The challenge

Indus challenged the award under section 68(2)(d) of the Arbitration Act 1996, which allows the court to intervene where a tribunal has failed to deal with all the issues put to it, and that failure has caused substantial injustice. Indus argued the tribunal had failed to address two causation issues:

1. Manufacturing capacity for shafts 1 and 2: whether Echjay had any spare manufacturing capacity to produce these shafts, given the evidence that its machines were already almost fully utilised (the tribunal had considered the issue but only in relation to shaft 3). 
2. Lead time for gear rings and pinions: whether the design and production validation process needed before Echjay could manufacture four gear components could have been completed within the tribunal’s two-year damages window, given a dispute between the experts as to whether the lead time was seven months or two years. 

The legal framework

The court reviewed the key authorities for section 68(2)(d) challenges, highlighting the following principles in particular:

• High threshold: Section 68 is designed for “extreme” cases, as the court should strive to uphold arbitral awards. 
• Issue vs argument: The provision applies only to “issues”, which are substantive questions the tribunal needed to decide, not to arguments, points of evidence or lines of reasoning. Drawing the line can be difficult, but a matter will be an “issue” where the whole or a substantial part of a claim depends on how it is resolved, such that fairness demands it be dealt with. Sean O’Sullivan KC (sitting as a Deputy High Court Judge) noted that “a properly drawn up, appropriately (but not excessively) granular, list of issues” was a helpful way of drawing that line, as a more practical approach than referring to abstract concepts of “fairness”. The issue must also have been “put” to the tribunal, looking at the proceedings as a whole, including the pleadings and the written and oral submissions.  
• Fair reading: The award should be read in a fair, commercial and commonsense way, not hypercritically. The court can consider the pleadings and submissions to understand the award. 
• No silent decisions: It must be apparent to the parties that an issue has been determined; a tribunal cannot deal with crucial issues in pectore (secretly). The court should not speculate or assume the tribunal must have decided a point simply because the ultimate relief implies a particular answer. If it is not clear from the words of the award that the issue has been decided, one must look for “indicia” that the tribunal were deciding the issue (i.e. signs they were evaluating the evidence or analysing the submissions on that issue). 
• Substantial injustice: If an essential issue has not been dealt with, substantial injustice is inherently likely. The applicant need only show its position was reasonably arguable and that the tribunal might well have reached a different conclusion. 

Decision on the shafts: capacity issue

The court found that the question of Echjay’s manufacturing capacity for shafts 1 and 2 was plainly an “issue” that had been put to the tribunal. Even though it could be characterised as a sub-issue under the headline of quantum, this did not prevent it from engaging section 68(2)(d). The court observed that it would have included this question on any properly drawn list of issues, and saw no basis for distinguishing between the capacity to manufacture shafts 1 and 2 on the one hand and shaft 3 on the other. 

Turning to whether the tribunal had dealt with this issue, the court held that it had not. The tribunal had rejected Echjay’s case for a six-day working week and proceeded on a five-day baseline, but then only addressed capacity constraints in respect of shaft 3. The court noted that the tribunal’s reference to Echjay’s “acknowledgment” that only shaft 3 was affected by capacity constraints was suggestive of a concession by Echjay rather than a finding by the tribunal on a contested issue. There was no discussion of the expert evidence on capacity for shafts 1 and 2, and no mention of the “run@rate” studies relied on by Indus. The court also noted that the otherwise systematic way in which the tribunal worked through other aspects of quantum in the award suggested that there was a gap in the tribunal’s decision making. Sullivan KC concluded that the tribunal had likely become confused about the shape of the issues as a result of how the oral closing submissions were presented.

Substantial injustice was therefore self-evident: the capacity issue had the potential to eliminate the entire damages claim for shafts 1 and 2.

Decision on the gears: lead time issue

The court likewise found the question of lead time for the gear rings and pinions to be an “issue” that had been put to the tribunal. The experts fundamentally disagreed on this point: Echjay’s expert said seven months; Indus’s expert said two years. If Indus was right, Echjay would have earned little or no profit within the two-year damages window.

Despite this dispute, the tribunal said nothing in its analysis about lead time. It simply adopted the calculations in an annexure to Echjay’s expert report that assumed a seven-month lead time. The court rejected Echjay’s argument that this amounted to an implicit acceptance of a seven-month lead time, noting that on every other contested element of that same calculation – profit margin, discount rate, pricing – the tribunal had explained its reasoning. The absence of any similar explanation for lead time was “striking, and suggests that something has gone wrong”. 

The court allowed the challenge and remitted both issues back to the tribunal for determination, together with any consequential issues such as interest and costs.

Comment

The fallible arbitrator

This decision illustrates how serious irregularities can arise, and section 68(2)(d) can bite, even in arbitrations conducted by experienced tribunals. As the Court observed, quoting Bryan J in The Republic of Kazakhstan v World Wide Minerals Ltd [2025] EWHC 452 (Comm), “even Homer nods”. Moreover, just because an award is otherwise detailed, runs to hundreds of pages and largely evidences the tribunal’s methodical, systematic reasoning, it will not be immune from challenge if the tribunal nevertheless overlooks an issue (even a sub-issue) that could have eliminated part of the claim.

Indeed, in this case, it may have been the sheer volume of material that ultimately caused the tribunal’s failure to deal with the issues. The court expressed “sympathy and […] respect for [the tribunal’s] efforts to pick the bones out of the parties’ various alternative arguments”, set out in “a substantial evidentiary and submission record”, including many of the pleadings and other written submissions running to in excess of 100 pages. Whilst the reason why the tribunal overlooked the two issues is irrelevant for the purposes of section 68(2)(d), it perhaps still serves as a cautionary tale for parties. Arbitrators are human and fallible; digesting a voluminous evidentiary record and ever-expanding “submissions, responses, rebuttals and alternative cases” creates room for confusion and error. The way in which closing submissions are presented is also likely crucial to a tribunal appreciating the scope of what it needs to decide. 

Arbitrators must be alive to this risk as well. Awards must be structured carefully, ensuring that all issues are not only accurately identified and summarised, but also “dealt with”.  Proactive case management from the outset of the proceedings is also essential to avoid the proliferation of submissions in a way that puts at risk the tribunal’s ability to identify and analyse the issues in their award. Clear parameters for the submissions (e.g. word and page limits) are important, as are lists of issues, produced at an early stage and updated as the case progresses. The present tribunal did direct the parties to produce a Schedule of Issues, but this ultimately ran to 432 pages of text largely cut and pasted from other documents, and (as Sullivan KC observed) was unlikely to have been useful to the tribunal.

Most importantly, however, is a willingness to intervene when the parties want continual bites at the proverbial pleadings cherry. The Arbitration Act 1996 requires a tribunal to give each party a “reasonable opportunity of putting his case”, not “every” opportunity. Although there is no suggestion that this was the issue in the present case, where the parties are permitted constantly to develop their cases with additional submissions and alternative arguments, a tribunal ironically puts due process at risk, rather than upholding it.

In this case, as the dispute was an ICC Arbitration the award would have been subject to a separate review and approval process by the ICC International Court of Arbitration and its Secretariat, prior to being issued. Although the tribunal is still responsible for the award, this added layer of independent scrutiny is intended to reduce defects and mitigate the risks of refusal to enforce or annulment, amongst other matters. However, even that additional process did not prevent the court finding that “something has gone wrong” with this particular award.

The pro-arbitration English courts

Whilst these are important lessons, Indus v Echjay does not hold further significance in terms of the English courts’ approach to arbitration challenges.  

As discussed in our Arbitration Atlas series earlier this year, the English courts maintain a very pro-arbitration stance and are reticent to intervene in the decisions of arbitral tribunals. In fact, Sullivan KC in the present case acknowledged, in passing, his reluctance to do so:

“try as I might I cannot read paragraph 672 of the Award as amounting to the Tribunal making a finding.” 

The success rate for section 68 applications is only 4%, making this case an exception that proves the rule; there is a very high threshold for applicants seeking to have all or part of an award set aside for serious irregularity, but if that threshold is met, the Court will not hesitate to step in.  This illustrates the robust supervisory role that the English courts play in international arbitration proceedings.

For further information, please email the authors or your usual CMS contact.

This article was co-authored by Alice Robson, a Trainee Solicitor at CMS.