High Court dismisses fraud challenge to arbitration award in shipping dispute

The High Court has delivered a significant ruling in A&N Seaways and Projects PVT Limited v Allianz Bulk Carriers DMCC, dismissing a challenge to an arbitration award and reinforcing the rigorous evidential standards required for fraud allegations in commercial disputes.

Case background

The dispute originated from an arbitration award made by David Martin-Clark on 9 July 2024, requiring A&N Seaways and Projects PVT Limited (the Charterers) to pay a stipulated sum following a charterparty agreement involving the vessel MV Bharadwaj. The Charterers contested the award on 6 August 2024, arguing that their director, Sashank Puria, lacked authority to enter into the charterparty agreement, rendering it invalid.

The arbitration proceedings commenced on 6 November 2023. Despite alleging fraud to the Tribunal, the Charterers failed to submit a defence, with their challenge centring on claims that the charterparty had been fraudulently procured in breach of the Arbitration Act 1996.

Court applications

Two principal applications were presented to the High Court. The Charterers sought permission through an Amendment Application to include fraud allegations against Allianz Bulk Carriers DMCC (the Owners). Concurrently, the Owners submitted a Strike-Out Application, contending that the claim lacked sufficient particulars and that the Charterers' participation in the arbitral proceedings precluded them from challenging the award under Section 72 of the Arbitration Act 1996.

During the hearing on 27 June 2025, Andrew Bowen KC represented the Charterers in advocating for the amendment. However, Judge Baumgartner ultimately refused the application, citing procedural deficiencies in the Charterers' claims.

Judicial analysis

The High Court scrutinised whether the Charterers had genuinely abstained from participating in the arbitration and assessed the validity of their fraud allegations. The court established that the Charterers had filed an "interim response" to the Owners' claims and sought extensions to submit a proper defence—actions constituting participation in the proceedings.

Judge Baumgartner highlighted the Charterers' considerable delay in presenting their amendment, extending over five months, and questioned the claims' plausibility. The judgement noted that the allegations were inadequately supported by evidence, with the Charterers failing to demonstrate a legitimate basis for the alleged fraud.

The court emphasised that merely challenging Mr Puria's authority could not sustain serious allegations of deceit against the Owners. The evidence presented relied primarily on Mr Puria's actions and the absence of a formal board resolution. Judge Baumgartner observed that procedural missteps or oversight did not equate to fraud, underlining the importance of establishing clear and coherent foundations for dishonesty claims.

Judicial outcome

The High Court dismissed the Charterers' Amendment Application and granted the Owners' Strike-Out Application. The court emphasised the necessity of observing due process in arbitration proceedings and maintaining rigorous standards for substantiating fraud allegations. Consequently, the Charterers were ordered to pay the Owners' costs.

This ruling reinforces judicial commitment to preserving arbitration process integrity whilst establishing demanding evidential thresholds for fraud allegations in commercial litigation. The judgement serves as a precedent regarding the standards required when challenging arbitration awards on grounds of fraud and the consequences of inadequate procedural compliance in arbitral proceedings.