Arbitration — Whether award of arbitrator as varied should be remitted where later court decisions disclosed error of law — High court holding that error of law not appealable — Whether right to find way around limitation on appeals imposed by Parliament — Court of Appeal upholding decision — Tenant’s appeal dismissed
This matter concerned the lease of 7 Rolls Buildings, Fetter Lane, London EC4. On November 26 1984 Walton J varied arbitrator’s award and held that the notional lease postulated by the rent review clause did not itself contain a rent review provision. He also declined to certify a question of law to be considered by the Court of Appeal: see National Westminster Bank plc v Arthur Young McClelland Moores & Co (1984) 273 EG 402.
That decision was subsequently considered to have been wrong by the Court of Appeal and the House of Lords: see Arnold v National Westminster Bank plc [1990] 1 EGLR 137 and [1991] 2 EGLR 109.
In these proceedings the tenants sought an order remitting the award of March 19 1984, as varied by Walton J pursuant to section 22 of the Arbitration Act 1950 on the grounds that it contained an error of law and an order extending time for making such an application. Knox J dismissed the application: [1993] 1 EGLR 23. He held that the delay in making the application was excessive, viz three and three quarter years before issue of the originating motion which could not be abridged. There was no special provision for remission on the discovery of an error of law. The error of law was not appealable and it would not be right to find a way round a limitation on appeals imposed by Parliament. Finally, he held that the changes made to appealing an arbitrator’s award by the Arbitration Act 1979 did not enlarge the power of the court, by implication, to remit under section 22 of the 1950 Act. The tenants appealed.
Held The appeal was dismissed.
1. The variation of an award took effect as if it were the award of the arbitrator and the court’s jurisdiction (in the strict sense) to remit an award was wholly unlimited. The fact that an award had been varied by the High Court did not in itself mean that there could be no remission.
2. On remission the award, including the variation ordered by the court, completely fell away, the arbitrator resuming all his authority over the matters referred to him. But whether the court would or should be prepared to use the power to remit in circumstances such as those of the present case was a different question and only jurisdictional.
3. The court accepted that because Walton J’s decision was wrong on construction the tenants had suffered an injustice. But that was not a sufficient ground for a remission.
4. The statutory provisions contained in the 1979 Act, which were now applicable, enabled a party to an arbitration to appeal to the High Court on a point of law, but not beyond the High Court save in circumstances indicated in section 1(7). It was the error of law made by Walton J which the tenants wished to eradicate. They could not do that in the manner contemplated by the 1979 Act and what they were seeking to do was find a way round the limitation imposed by Parliament. In general the court would not lend support to such circumvention. Section 22 of the 1950 Act was not available as a backdoor method of circumventing restrictions upon the court’s power to intervene in arbitral proceedings which had been created by the 1979 Act.
James Munby QC (instructed by Freshfields) appeared for the tenants; Hazel Williamson QC (instructed by Stephenson Harwood) appeared for the landlords.
