A Requirement, A Factor, or A Figure of Speech? Role of Prejudice When Challenging Awards Under the Model Law

Both parties and courts routinely invoke the term ‘prejudice’ in applications to set aside an arbitral award or refuse its enforcement. This suggests that the use of the term is more than just a figure of speech. It is generally understood that prejudice, in the sense of impact or effect on the outcome of the arbitration, is relevant for procedural challenges but not jurisdictional challenges. However, questions remain as to whether prejudice is legally relevant for challenges that are neither strictly procedural or jurisdictional in nature, whether prejudice is relevant as a factor for consideration or as a legal requirement when challenging an award, and the meaning of prejudice. This article shows that the usage of the term ‘prejudice’ in case law is inconsistent and far from straightforward. This article attempts to elucidate a clear and structured way of understanding the role prejudice plays for each ground for challenging an award under the Model Law. Model Law, Article 34, Article 36, Setting Aside, Refusing Enforcement, Procedural Challenge, Jurisdictional Challenge, Residual Discretion, Materiality, Prejudice, Causative Link