Sumukan Ltd v Commonwealth Secretariat
| Jurisdiction | England & Wales |
| Judge | Lord Justice Waller |
| Judgment Date | 25 June 2007 |
| Neutral Citation | [2007] EWCA Civ 243,[2007] EWCA Civ 676 |
| Docket Number | Case No: A3/2006/1138 AND (Z),Case No: A3/2007/0504(A), A3/2007/0504(B) |
| Court | Court of Appeal (Civil Division) |
| Date | 25 June 2007 |
[2007] EWCA Civ 243
the Master of the Rolls
Lord Justice Waller
Vice-President of the Court of Appeal, Civil Division and
Lord Justice Sedley
Case No: A3/2006/1138 AND (Z)
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Queen's Bench Division, Commercial Court
Mr Justice Colman
2005FOLIO420
Anthony Speaight QC and Kate Livesey (instructed by Sumukan Ltd) for the Appellant
Colin Nicholls QC and Tom Poole (instructed by Speechly Bircham LLP, Solicitors) for the Respondent
Hearing dates: 29th—31st January 2007
This is the judgment of the court.
Pursuant to an arbitration clause in a contract between Asset Management Shop Limited (AMS) [the predecessors in title of Sumakan Limited] and The Commonwealth Secretariat (CMS), arbitrators made an award dated 25 th April 2005 in favour of CMS. AMS applied to the court for leave to appeal on a point of law under section 69 of the Arbitration Act 1996 [the 1996 Act]. By a judgment handed down on 20 th February 2006 Colman J decided that by a further term incorporated into the contract the parties had in the words of s.69(1)”otherwise agreed” to exclude the jurisdiction of the court. The ruling involved him deciding first that the clause excluding the right of appeal had been incorporated as a matter of English domestic law into the contract, and second that he could not accept the submission that some special meaning had to be given to the words “otherwise agreed” to avoid an infringement of Article 6 of the Convention on Human Rights.
He indicated that he would have granted permission to appeal from the award, if he had had the jurisdiction to do so. He refused permission to appeal to the Court of Appeal from his decision.
On the application for permission to appeal Colman J's decision to this court, Rix LJ on paper refused permission to appeal so far as Colman J had decided as a matter of domestic law that the clause excluding a right of appeal to the courts was incorporated, but he granted permission on the Human Rights point and the effect of Article 6.
A preliminary point arises as to the Court of Appeal's jurisdiction. CMS apply to set aside Rix LJ's permission to appeal on the grounds that the refusal to grant leave by Colman J excludes any right of appeal to the Court of Appeal. It is argued that Colman J's ruling amounted to a refusal to grant permission to appeal from the award under section 69 and that by virtue of section 69(6) an appeal could only be brought with leave of the original court, i.e. Colman J himself.
The appellants resist that application and further seek to renew the request for permission to appeal Colman J's decision on incorporation as a matter of English domestic law. It is convenient to take first the question whether the Court of Appeal have any jurisdiction following Colman J's refusal to grant leave.
Does the Court of Appeal have jurisdiction to consider the appeal from Colman J as to the existence of an exclusion agreement?
To follow the arguments it is necessary to have regard in particular to Sections 67, 68, 69, 70 (2) and (3) and 73 of the 1996 Act. But also relevant for reasons that will become apparent, are sections 44 and 45. For convenience those provisions are appended hereto. Section 67 is dealing with substantive jurisdiction. Two points will be noted. First by subsection (1) it is provided that a party may lose the right to object under s.73 and that the right is subject to the restrictions in section 70(2) and (3). Second, the language of subsection (4) restricting appeals to the Court of Appeal is to require leave of the court for any appeal from a decision of the court “under this section.” Section 68 is dealing with serious irregularities affecting the tribunal. The two points to be noted in relation to this section are the same as for section 67. First by subsection (1) a party may lose the right to object under section 73 and the right to apply is subject to the restrictions in section 70(2) and (3).Second by subsection (4) leave to appeal is required from a decision of the court “under this section”.
Section 69 is dealing with appeals on points of law. The points to note on this section are these. First by subsection (1) a party may appeal “unless otherwise agreed” i.e. a decision which the judge must take before considering whether to grant leave to appeal is whether access to the court has been excluded by agreement. Second subsections (2) to (6) deal with the granting or refusing of permission to appeal from the arbitration award. In that context by subsection (2) the right of appeal is subject to the restrictions in section 70(2) and (3) similar to those in subsections (2) of sections 67 and 68, but the language of the restriction on the right to appeal the court's decision to the Court of Appeal is different from that in Sections 67 and 68, leave of the court being required by subsection (6) for any appeal from a decision of the court “under this section to grant or refuse leave to appeal”.
Subsections (7) and (8) of section 69 deal with the appeals once leave to bring the same has been given, and the restriction on the bringing of an appeal to the Court of Appeal is in quite different language again. Subsection (8) provides for the decision of the court being treated as a judgment of the court for the purposes of an appeal, and then provides that no such appeal lies without leave of the court, and gives directions as to the only circumstances in which leave should be given.
Although not referred to in the course of argument section 45 is of relevance. It relates to the court's jurisdiction to rule on a preliminary point of law. It (like section 69) commences with the words “Unless otherwise agreed by the parties”, and it contains a fetter on the right to appeal to the Court of Appeal not by reference to any decision “under this section”, but to particular aspects of decisions under section 45 which on a literal interpretation do not include a decision on whether the parties have “otherwise agreed”.
It is common ground that in all the subsections requiring leave from “the court” for the bringing of an appeal to the Court of Appeal, “the court” is the first instance court. That this was the position under Section 69 was so held by the Court of Appeal in Henry Boot Construction v Malmaison Hotel [2001] QB 388. In Athletic Union of Constantinople v National Basketball Association [2002] 1 WLR 2863 the Court of Appeal followed the Henry Boot decision and held that wherever the expression “the Court” occurred in sections 67, 68 as well as 69 it meant the court of first instance. Since then it has been recognised that wherever leave is required from the “court”, and it is required in many sections apart from those already mentioned, the “court” is the court of first instance; see for example Cetelem SA v Roust Holding Limited [2005] 1 WLR 3555.
Cetelem was concerned with section 44 and in particular section 44(7), as we shall see, and it is an authority to which we shall return. That is one reason for appending section 44. But we also draw attention to the fact that that section commences with the words “Unless otherwise agreed by the parties..”, and a literal interpretation of section 44(7), excluding a right of appeal to the Court of Appeal without leave of the court “from a decision of the court under this section”, would appear to us to apply to a decision as to whether the parties had otherwise agreed.
Mr Speaight's submissions
Mr Speaight QC for Sumukan concentrated on the language of section 69(6) and (8). He argued that a decision that the parties had entered into an exclusion agreement, which precludes the court having jurisdiction to consider whether to grant leave to appeal and thus prevents the actual hearing of an appeal on a point of law, is neither a “decision of the court under [section 69] to grant leave or refuse leave to appeal” within subsection (6), nor “the decision of the court” from which “no such appeal lies without leave of the court” within subsection (8).
There can be no real issue that a decision as to the existence of an exclusion agreement is not a decision covered by subsection (8), but for completeness Mr Speaight argued that the decision is not a decision under Section 69 at all because it is a decision as to whether Section 69 is to apply or not.
In support of his argument that the court should not construe Section 69 (6) or (8) as preventing an appeal as to the effectiveness or otherwise of an exclusion agreement, Mr Speaight referred us to certain authorities. He pointed to the language used by Lord Nicholls in Inco Europe v First Choice Disribution [2000] AC 586 at 590F where in the context of demonstrating that the draftsman of the 1996 Act must have made an error Lord Nicholls said “The draftsman must have intended that, save to the extent that an appeal was expressly circumscribed, parties to court decisions under the various sections be able to exercise whatever rights of appeal were available to them from sources outside the Act itself.”
That sentence appears in a judgment dealing with what was clearly an error in the drafting of a particular section, and we are not much influenced by it. One must bear in mind that there are many sections in which the right to appeal to the Court of Appeal is circumscribed by the necessity to obtain leave from “the court” at first instance. This was important to those drafting the 1996 Act. It was...
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