Note In Appeal By North Lanarkshire Council Against Stewart And Shields Limited
| Jurisdiction | Scotland |
| Judge | Lady Wolffe |
| Neutral Citation | [2017] CSOH 76 |
| Court | Court of Session |
| Published date | 09 May 2017 |
| Year | 2017 |
| Date | 05 May 2017 |
| Docket Number | P179/17 |
OUTER HOUSE, COURT OF SESSION
[2017] CSOH 76
P179/17
NOTE OF LADY WOLFFE
In the appeal by
NORTH LANARKSHIRE COUNCIL
Petitioner
against
STEWART AND SHIELDS LIMITED
Respondent
Pursuer: Dunlop; Ledingham Chalmers LLP
Defender: Howie QC; TC Young LLP
5 May 2017
Motion under section 15 of the Arbitration (Scotland) Act 2010 (“the Act”)
[1] In this Arbitration application to the Court of Session (“these proceedings”) against the arbitrator’s part 5 award, the petitioner seeks an order prohibiting the disclosure of the identity of any party to these proceedings in terms of section 15 of the Arbitration (Scotland) Act 2010 (“the Act”) and Rule 100.9 of the Rules of the Court of Session (“the RoC”). The respondent opposes this motion on several grounds, including (i) the fact that reference has been made to this arbitration in the notes to the financial accounts of the petitioner, and (ii) that a prohibition on its being able to refer to the outcome of the arbitration would be prejudicial to its commercial interests.
[2] The parties were at issue as to the proper interpretation of, and interaction between, section 15 of the Act and rule 26 of the arbitration rules in Schedule 1 to the Act (“the Arbitration Rules”). It is not necessary to take the matter to avizandum and I produce this Note for purpose addressing the arguments I heard earlier this week.
Background
The ongoing Arbitration
[3] By way of background it should be noted that the petitioner, who is a public authority, and the respondent, a building company known as Stewart and Shields Limited, entered into a contract for certain construction works. The petitioner and respondent were, respectively, employer and contractor under that contract. After a period of time, the petitioner purported to terminate the parties’ contract. It did so on the basis that, it was said, the respondent had failed to proceed regularly and diligently with the works.
[4] The dispute was referred to arbitration (“the arbitration proceedings”). The outcome of the arbitration proceedings thus far has been in favour of the respondent. In particular, it was explained that by his part 1 award, the arbitrator found that the petitioner’s notices of termination were ineffective to terminate the contractor’s appointment and by his part 3 award, he had determined that on the merits the ground for termination (the asserted failure to proceed regularly and diligently with the works) was also ill-founded. The part 2 and 4 awards of the arbitrator relate to the expenses of the part 1 and 3 awards, respectively. Those awards were no longer challengeable, which is why the petitioner required to make due provision in its Annual Accounts (as after defined). The subject matter of these proceedings is the arbitrator’s part 5 award, which dealt with loss and quantification.
The information in the public domain
[5] As a public authority of a particular kind, namely a local authority, the petitioner is under a statutory obligation imposed by the Local Authority Accounts (Scotland) Regulations 2014 (SSI 2014/200) (“the SSI”) to publish to a website of the authority:
(i) a copy of its unaudited accounts submitted to the auditor, and that within a stipulated time after submission of the unaudited accounts to the auditor (as required by regulation 8 of the SSI), and
(ii) a copy of its signed audited accounts, within a stipulated time frame (as required by regulation 11 of the SSI).
The first obligation subsists only until the audited accounts are published to the authority’s website: regulation 8(8) of the SSI . The second obligation subsists for a period of five years: see regulation 11(2) of the SSI.
[6] In due course, the petitioner published its annual accounts (“the Annual Accounts”) for the period to which the early part of the arbitration proceedings related, being 2015/16, including the outcome of the part 1 award. By reason of the arbitrator’s findings that related to the period covered by the Annual Accounts, it was deemed necessary to make some provision for liability in them. Two passages in the Annual Accounts were highlighted in submissions. Mr Dunlop candidly accepted that the petitioner might proceed differently, in future, in respect of the amount of detail that should be disclosed in its statutory accounts about such disputes. The first passage referred to was the reference to note 20(3) under “Provisions” at page 44 in the Annual Accounts, which stated as follows:-
“Arbitration proceedings between the Council [ie the petitioner] and Stewart and Shields Limited [ie the respondent], for construction of the Antonine Day Care Centre which took place within the 2015/16 financial year found in favour of the contractor [ie the respondent] due to the Council not being entitled to terminate the contractor’s employment. The above provision has been made in the accounts on a best estimate basis for claims quantified to date by the above parties.”
It will be noted that the passage disclosed the name of the parties, including the respondent and the work to which the contract related. The second passage in the Annual Accounts was in note 36 in respect of “Contingent liabilities” at page 63. So far as material, it stated as follows:
“Arbitration proceedings between the Council and Stewart and Shields Limited, for construction of the Antonine Day Care Centre has found in favour of the contractor [ie the respondent] due to the Council [ie the petitioner] not being entitled to terminate the contractor’s employment. A provision has been made in the accounts on a best estimate basis for claims quantified to date by the above parties. Four heads of claim with regards sums that may be claimed are yet to be quantified. Due to the wide variety and nature of the claims and the uncertainty of any potential liability, no value has been attributed to these claims in the financial statements.”
There was no suggestion in submissions that these details were not sufficient to identify the parties and the contract works referred to. It was also explained that at the time of terminating the contract between the parties, the fact and basis of the petitioner’s termination of the contract had been reported in the newspaper. These disclosures all predated the raising of these proceedings.
Relevant statutory provisions governing the Motion
[7] The petitioner’s application is made in terms of section 15 of the Act. Reference was also made in submissions to rule 26 of the Arbitration Rules. The parties were sharply divided as to the interpretation and interrelationship of these provisions. It is necessary therefore to set out their terms. No reference was made to chapter 100 of the RoC and accordingly, no further reference need be made to it.
Section 15 of the Act
[8] Section 15 of the Act, headed “Anonymity in legal proceedings”, is in the following terms:
“15. Anonymity in legal proceedings
(1) A party to any civil proceedings relating to an arbitration (other than proceedings under section 12) may apply to the court for an order prohibiting the disclosure of the identity of a party to the arbitration in any report of the proceedings.
(2) On such an application, the court must grant the order unless satisfied that disclosure—
(a) is required—
(i) for the proper performance of the discloser's public functions, or
(ii) in order to enable any public body or office-holder to perform public functions properly,
(b) can reasonably be considered as being needed to protect a party's lawful interests,
(c) would be in the public interest, or
(d) would be necessary in the interests of justice.
(3) The court's determination of an application for an order is final.”
Rule 26 of the Arbitration Rules
[9] Furthermore, rule 26 of the Arbitration Rules is as follows:
“26 Confidentiality D
(1) Disclosure by the tribunal, any arbitrator or a party of confidential information relating to the arbitration is to be actionable as a breach of an obligation of confidence unless the disclosure—
(a) is authorised, expressly or impliedly, by the parties (or can reasonably be considered as having been so authorised),
(b) is required by the tribunal or is otherwise made to assist or enable the tribunal to conduct the arbitration,
(c) is required—
(i) in order to comply with any enactment or rule of law,
(ii) for the proper performance of the discloser's public functions, or
(iii) in order to enable any public body or office-holder to perform public functions properly,
(d) can reasonably be considered as being needed to protect a party's lawful interests,
(e) is in the public interest,
(f) is necessary in the interests of justice, or
(g) is made in circumstances in which the discloser would have absolute privilege had the disclosed information been defamatory.
(2) The tribunal and the parties must take reasonable steps to prevent unauthorised disclosure of confidential information by any third party involved in the conduct of the arbitration.
(3) The tribunal must, at the outset of the arbitration, inform the parties of the obligations which this rule imposes on them.
(4) ‘Confidential information’, in relation to an arbitration, means any information relating to—
(a) the dispute,
(b) the arbitral proceedings,
(c) the award, or
(d) any civil proceedings relating to the arbitration in respect of which an order has been granted under section 15 of this Act, which is not, and has never been, in the public domain.”
Submissions for the Respondent
First ground of opposition: the information was in the public domain
[10] While Mr Howie QC acceded to my request that he first lay out the ground of opposition to the motion, he resisted any suggestion that the onus rested with the respondent. Mr Howie began by noting that the power sought to be invoked by the petitioner’s motion was a narrow one, and was located solely in section 15 of the Act. Any power under common law or any other enactment...
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