Db v Dlj
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mostyn |
| Judgment Date | 24 February 2016 |
| Neutral Citation | [2016] EWHC 324 (Fam) |
| Docket Number | Case No: FD13D05331 |
| Court | Family Division |
| Date | 24 February 2016 |
[2016] EWHC 324 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Mostyn
Case No: FD13D05331
Martin Pointer QC and Jeni Kavanagh (instructed by Kidd Rapinet LLP) for the applicant
Patrick Chamberlayne QC and Jacqueline Marks (instructed by Blake Morgan LLP) for the respondent
Hearing date: 12 February 2016
In this judgment I shall refer to the applicant as "the husband" and to the respondent as "the wife".
This is my judgment on the husband's application dated 7 October 2015 that the wife do show cause why an arbitral award (as supplemented) made by Mr Gavin Smith dated 2 July 2015 should not be made an order of the court. The wife resists the application. She says that the award is vitiated by a mistake about the true value of the property in Portugal allocated to her. Alternatively, she says that events have occurred since the award which invalidate the finding made by the arbitrator as to the value of that property.
Family arbitration
The arbitration procedure for family financial dispute resolution was launched by the Institute of Family Law Arbitrators in February 2012. A useful short guide (written by Gavin Smith and Sir Peter Singer) is to be found in Table 29 of At A Glance. It is described more fully by Sir Peter in "Arbitration in Family Financial Proceedings: the IFLA Scheme" Part 1 [2012] Fam Law 1353 and Part 2 [2012] Fam Law 1496. A recent article explaining its undoubted merits and advantages written by Duncan Brooks appears in Resolution's "The Review", Issue 180 at 32.
The scheme was intended to align the new family finance arbitration procedure as closely as possible with commercial arbitrations governed by the Arbitration Act 1996. Now divorcing couples were to be afforded the same advantages as had been made available to commercial people for over a century. Therefore, when parties agree to enter into arbitration they sign a document — ARB1 — which states that:
"We, the parties to this application, whose details are set out below, apply to the Institute of Family Law Arbitrators Ltd for the nomination and appointment of a sole arbitrator from the Family Arbitration Panel to resolve the dispute referred to in paragraph 2 below by arbitration in accordance with the Arbitration Act 1996 ('the Act') and the rules of the Family Law Arbitration Scheme ('the scheme')"
Before I examine the differences, if any, that apply, or should apply, to a family arbitration I shall set out shortly the scope for challenging a commercial award governed exclusively by the 1996 Act.
In his excellent paper "Challenges to Arbitral Awards at the Seat" given to the Mauritius International Arbitration Conference on 15 December 2014 1 Sir Bernard Eder explains at [6] that:
"…the general approach of the Court is one which strongly supports the arbitral process. By way of anecdote, it is perhaps interesting to recall what I was once told many years ago by Michael Kerr, a former judge in the Court of Appeal and one of
the leading figures in the recent development of the law of arbitration in England, when I was complaining about an arbitration that I had just lost and the difficulties in the way of challenging the award. I told him that the award was wrong and unjust. He looked baffled and said: "Remember, when parties agree arbitration they buy the right to get the wrong answer". So, the mere fact that an award is "wrong" or even "unjust" does not, of itself, provide any basis for challenging the award or intervention by the Court. Any challenge or appeal must bring itself under one or more of the three heads which I have identified."
The grounds or heads of challenge are very circumscribed indeed. In addition to the three heads mentioned by Sir Bernard (to which I will turn below) there is the facility under section 57 to ask the arbitrator to correct his award. It is noteworthy that by virtue of section 57(1) the parties are free to agree on the powers of the tribunal to correct an award or make an additional award. As will be seen, in this case the parties agreed that certain matters could and should be corrected and clarified by the Tribunal. In the absence of agreement then by virtue of section 57(3) and (4) a party may apply to the arbitrator within 28 days of the award either (a) to correct an award so as to remove any clerical mistake or error arising from an accidental slip or omission or clarify or remove any ambiguity in the award; or (b) to make an additional award in respect of any claim (including a claim for interest or costs) which was presented to the tribunal but was not dealt with in the award.
This power is very limited. In Ases Havacilik Servis Ve Destek Hizmetleri AS v Delkor UK Ltd [2012] EWHC 3518 (Comm) Hamblen J (as he then was) stated at [21]:
"Whilst the decision in Craske v Norfolk CC [1991] JPL 760 indicates that the power of the arbitrator under the slip rule contained in what is now s.57 of the 1996 Act (formerly s.17 of the Arbitration Act 1950) to correct errors in the award applies to errors which were attributable to the parties, as well as errors attributable to the tribunal, it also makes it clear that it does not extend to oversights or errors in production of evidence or argument before the Arbitrator — see White Book 2012, Vol. 2, Note 2E-226 at page 648. S.57 does not apply to second thoughts, still less to second thoughts based on fresh evidence."
An example of an arbitrator correcting an accidental slip or mistake is Union Marine Classification Services LLC v The Government of the Union of Comoros [2015] EWHC 508 (Comm) where the arbitrator had, surprisingly, completely failed to deal with the Government of Comoros's counter-claim. The corrected award dealt with that and the challenge to such amended award was dismissed by Eder J. An application for leave to appeal against that decision was, I understand, recently dismissed by the Court of Appeal.
Aside from this limited corrective jurisdiction the only ways of contesting an award are by:
i) challenging an award of the arbitral tribunal as to its "substantive jurisdiction" under s67 of the 1996 Act; or
ii) challenging an award on the ground of "serious irregularity" under s68 of the 1996 Act; or
iii) an appeal to the Court on a "question of law" arising out of an award made in the proceedings under s69 of the 1996 Act.
By s70, an applicant must first have exhausted all available arbitral processes of appeal and review. Further, any application or appeal must be brought within 28 days of the award.
There is a great deal of jurisprudence about these three heads and these are fully explained in Sir Bernard's paper. Challenges as to the tribunal's substantive jurisdiction go to the matters mentioned in section 30(1)(a) – (c) namely whether there is a valid arbitration agreement; or whether the tribunal is properly constituted; or what matters have been submitted to arbitration in accordance with the arbitration agreement. Serious irregularity is specified in nine sub-sections viz:
(a) failure by the tribunal to comply with section 33 (general duty of tribunal to act fairly);
(b) the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction: see section 67);
(c) failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties;
(d) failure by the tribunal to deal with all the issues that were put to it;
(e) any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award exceeding its powers;
(f) uncertainty or ambiguity as to the effect of the award;
(g) the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy;
(h) failure to comply with the requirements as to the form of the award; or
(i) any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award.
I draw attention to (g) where, unsurprisingly, fraud is mentioned as a ground of serious irregularity entitling the court to set-aside an award.
An appeal on a question of law needs the leave of the court. Section 69(3) states that:
Leave to appeal shall be given only if the court is satisfied —
(a) that the determination of the question will substantially affect the rights of one or more of the parties,
(b) that the question is one which the tribunal was asked to determine,
(c) that, on the basis of the findings of fact in the award — (i) the decision of the tribunal on the question is obviously wrong, or (ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and
(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question.
This is a stringent test indeed.
What amounts to "a question of law" is, of course, capable of an expansive interpretation and might sweep up mixed questions of law and fact. However, in Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] AC 724 leave to appeal was granted on the ground that an issue of frustration was a question of law. The decision of Goff J on the substantive appeal reversing the decision of the arbitrator that the charterparty in that case had been frustrated was set aside by the Court of Appeal, a decision upheld in the House of Lords,...
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