English court upholds rare challenge to arbitration award

The English Commercial Court in the recent case of Indus Powertech Inc v Echjay Industries Private Limited (2026) upheld a serious irregularity challenge to an arbitral award on the basis that the tribunal had failed to deal with two of the issues put to it. Challenges of this kind almost never succeed. 

Arbitration awards are built to last

For businesses involved in cross-border construction and engineering disputes, arbitration is the undisputed mechanism of choice. The reasons are well established: a neutral forum, a tribunal with genuine sector expertise, and a final, binding award enforceable in over 160 countries under the New York Convention.

The finality and enforceability of the decision is an essential advantage of arbitration – avoiding the risk of spiralling costs from lengthy appeals. Under the Arbitration Act 1996, which remains the principal governing statute for arbitrations in England, challenges are confined to three narrow grounds. They are that the tribunal lacked jurisdiction (section 67), that there was a serious irregularity (section 68) or that the tribunal erred on a point of law (section 69), though this latter ground is effectively waived under the rules of most arbitral institutions. The threshold for successfully challenging under each ground is deliberately high. According to figures published by the English High Court in March, not a single section 68 challenge succeeded in the 2024-2025 year. The same was true of section 69 appeals.

Against this backdrop, the Indus Powertech decision is significant.

What happened?

The dispute arose from a master supply agreement between Indus Powertech Inc, a US company, and Echjay Industries, an Indian engineering manufacturer – a cross-border supply arrangement typical of the construction and energy sectors. The agreement provided for ICC arbitration with a London seat.

The tribunal found Indus in breach of a non-compete obligation and awarded Echjay approximately US$4.1 million in lost profits across a two-year damages window. Indus challenged the award under section 68, arguing the tribunal had failed to address two causation questions central to quantum: whether Echjay had the manufacturing capacity to produce the relevant shafts; and whether the required validation process for the gear rings and pinions could have been completed within the two-year damages horizon.

The court confirmed that a section 68 challenge is about due process, not correctness. A tribunal may reason badly or even incorrectly without that amounting to a failure to deal with an issue. Awards should be read fairly, and tribunals are entitled to a broad scope in how they structure their reasoning.

But that scope has limits. Parties must not be left to guess whether an issue was decided or simply overlooked. Where an issue does not feature in the tribunal's analysis and no reasons are given for its rejection, it cannot be inferred that it was considered and dismissed.

On that basis, the court found that both issues had been put to the tribunal and neither had been addressed. That was a serious irregularity causing substantial injustice, and the relevant parts of the award were remitted for reconsideration.

The domestic parallel: adjudication

For domestic UK construction disputes, something of a parallel can be drawn with adjudication. The courts enforce adjudicators' decisions with the same robustness that they afford arbitral awards, notwithstanding that the substance of an adjudication decision remains subject to the possibility of further proceedings in litigation. As with section 68 arbitration challenges, in determining whether to enforce an adjudication decision in the immediate term, the courts are concerned only with process, not outcome – and they intervene only in the most exceptional circumstances. The grounds for resisting enforcement are narrow: jurisdiction or a material breach of natural justice. The view of a party that the adjudicator got it wrong is simply not a defence to complying with the decision unless and until successfully challenged in court, under the "argue now, pay later" principle. 

Adjudication decisions are accordingly temporarily, but very robustly, binding. A dissatisfied party can, in principle, reopen the dispute in arbitration or litigation but in practice, very few do: the cost and disruption of relitigating a concluded adjudication means the adjudicator's decision is, for most parties, the final word.

Whether you are in a statutory adjudication or an ICC arbitration, the message is the same: the window for correcting outcomes after the event is extremely narrow. The investment must go into getting the process right from the start.

Osborne Clarke comment

Getting disputes right – whether in arbitration, adjudication or litigation – requires more than legal knowledge. It requires strategic judgment about how to present a case, how to identify and frame the issues that matter, and how to avoid the procedural pitfalls that can undermine even the strongest substantive arguments.

Indus Powertech is a timely reminder that the robustness of arbitration is a double-edged sword. It protects winning parties from litigation, but it also means that losing parties have very little room to manoeuvre. Ensuring your case is properly and comprehensively presented to the tribunal is therefore key.

At Osborne Clarke, our construction disputes team advises clients across the full spectrum of cross-border and domestic dispute resolution. From contract structuring and dispute avoidance through to the strategic conduct of arbitration and adjudication proceedings, we bring deep sector knowledge and procedural expertise to bear at every stage.

If you have a dispute in contemplation, or would like to discuss your options under an existing arbitration or adjudication clause, please do not hesitate to get in touch with one of our experts.