Key takeaway

An arbitral award in England and Wales can be challenged and set aside where it has been procured through fraud, bribery or false evidence under section 68(2)(g) of the Arbitration Act 1996. The English courts will intervene where dishonesty has fundamentally compromised the integrity of the arbitration process. The decision in Federal Republic of Nigeria v P&ID confirms that while arbitral tribunals have limited powers to police misconduct, the courts at the seat remain the ultimate safeguard against awards obtained through irregularity such as false evidence.

What happened in Nigeria v P&ID and why was the arbitral award set aside?

The underlying dispute concerned a failed gas supply and processing agreement between Nigeria and P&ID. A tribunal in London had issued an award for P&ID. However, when the state of Nigeria challenged the award before the English courts, extensive evidence was found to show that the contract had been secured through bribery and that key evidence presented during the arbitration was misleading or false.

Thus, the court set aside the US$11 billion award for P&ID. The court concluded that the arbitration process had been fundamentally compromised. Crucially, the alleged misconduct was not uncovered during the arbitration itself; it was only afterwards, through judicial review, that the evidential flaws were exposed.

What powers do arbitral tribunals have to deal with fraud or false evidence?

Unlike the courts, arbitral tribunals do not operate with sovereignty and cannot impose criminal sanctions. The system is set up to run on a mutually respected procedure of justice.

Typically, a tribunal can:

·       Assess the evidence.

·       Draw adverse inferences if there is a lack of engagement.

·       Make cost orders against a party engaging in misconduct.

While these measures can influence outcomes, they may not be sufficient where fraud is sophisticated or concealed. In serious cases, meaningful accountability often depends on court intervention after the award is issued. The arbitral procedure is not set up to deal with malicious intent.

When will English courts intervene to set aside an arbitral award for fraud?

English courts are generally supportive of arbitral finality, but the Nigeria v P&ID decision confirms that they will intervene where an award has been procured dishonestly. The courts generally uphold the rulings of arbitration proceedings as they are confined by the Arbitration Act 1996, which allows challenges only in limited circumstances.

However, in the UK, the judicial backstop does exist, as false evidence can be charged under the Perjury Act 1911 if evidence is given under oath; however, prosecution under this law is quite rare. The UK has also ruled on a similar matter where, in Jones v Kaney, the expert providing their educated opinion on a matter was no longer given immunity. More on the rules on arbitration in England and Wales here.

Does the seat of arbitration affect a fraud-based challenge?

Internationally, there is no uniform approach to false evidence in arbitration. Some jurisdictions link arbitral evidence to criminal perjury laws, similar to the UK. Other jurisdictions restrict criminal liability to only proceedings before state courts. Switzerland, for example, expressly extends criminal sanctions to arbitration. In many civil law systems, liability depends on formal judicial supervision. This patchwork means the consequences of dishonest evidence can vary significantly depending on the seat of arbitration, leading to the jurisdiction mattering more than the proceedings at times. Learn more on the benefits of choosing English law as governing law in international contracts.

Why court oversight remains central when challenging an arbitral award for fraud

The modern arbitration framework relies primarily on procedural discipline and professional ethics to safeguard evidential integrity. Where those mechanisms fail, national courts serve as the ultimate corrective. As with a common law system, the issue must arise first to have an effective solution proposed.

Conclusion

·  There is no uniform international framework policing false testimony in arbitration; consequences vary by jurisdiction.

·  Arbitral tribunals have procedural tools to manage dishonest evidence, but lack coercive or criminal enforcement powers.

·  UK criminal liability for perjury in arbitration is possible in limited circumstances, particularly where evidence is given on oath.

·  Court oversight at the seat remains the ultimate safeguard against awards procured by serious evidential misconduct.

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Barnes Law advises clients on challenging arbitral awards, jurisdiction disputes and cross-border enforcement. Contact our international arbitration team today.

Authored by Yulia Barnes.

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