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Sumner and another v Costa Ltd and another

Sumner and another v Costa Ltd and another


[2014] EWHC 96 (Ch)


CHANCERY DIVISION


Clive Freedman QC (Sitting as a Deputy Judge of the High Court)


29 January 2014


Arbitration – Award – Leave to appeal against award – Appeal on question of law – Lease falling due for rent


JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORRECTIONS)


               CLIVE FREEDMAN:            


               Contents            


               SUBJECT                                                                                                                              PARAGRAPH NUMBER            


Introduction                                                                                                                            1-6


Background: the Rent Review                                                                                               7-13


Background: the Award                                                                                                         14-18


The Claims                                                                                                                             19-24


The Arbitrator’s Witness Statement                                                                                       25-29


The Application to cross examine the Arbitrator                                                                   30-31


The nature of the challenges to the Award                                                                             32-33


The reference in the Award to “case law”                                                                              42


Did the Award intentionally not contain all of the reasoning of the Arbitrator?                   43-47


Was the March letter intentionally untrue in saying that there was nothing to add?             48-56


Was the witness statement untrue in that the Arbitrator invented                                         57-59


intentionally some of the reasoning which was not previously in his mind?


The specific criticisms of the Arbitrator’s witness statement                                                60-67


The challenges under Section 68 (serious irregularities)                                                       68-87


The challenges to the Award under Section 69 (error of law)                                               88-104


Other bases of application                                                                                                    


Section 57                                                                                                                              105


Sections 70(4)                                                                                                                        106-107


Sections 24 and 33                                                                                                                 108


Substantial injustice                                                                                                               109-111


Conclusion                                                                                                                             112


               I Introduction            


1. The Claimants are landlords under a lease of 35 Market Street, Falmouth, Cornwall. The First Defendant is the tenant. They appointed Philip Alan Dickins, the Second Defendant, as arbitrator to determine a rent review under the lease (“the Arbitrator”). In the three claims which are before the court, the Claimants seek to challenge the award of the Arbitrator.


2. The Claimants have issued three claims. The first, issued on 24 February 2012, to which the First Defendant was the only defendant, was brought under sections 68 and/or 69 of the Arbitration Act 1996 (“the 1996 Act”). In error, this was issued in the Commercial Court, and so in order to correct the irregularity, the second claim was issued, on 2 March 2012, in the Chancery Division, as required by CPR PD62, paragraph. 2.3(2). The third claim, which replicates the first and second, but includes additional claims against the Arbitrator, was issued on 13 April 2012. The claims against the Arbitrator include the following relief:


(1) Orders under sections 57 and/or 70(4) of the 1996 Act requiring the Arbitrator to “correct and clarify and set out his full reasoning…”;


(2) An order under section 24, removing the Arbitrator;


(3) An order that the Arbitrator pay the costs of the claim.


3. The Claimants recognise that even where there are serious irregularities, the starting point is that the Court will remit the matter to the Tribunal for further consideration. There has to be a real reason to go further than this and to remove an arbitrator. To this end, the Claimants submit that what has happened has been unusual and unique.


4. The parties before me have been the Claimants and the Arbitrator. The Arbitrator has been careful to limit his involvement to the claims against him, but in so doing, he has had to say something about the Section 68 application because of its considerable overlap with the application against him. He has not dealt with the section 69 application directly in his submissions because he says that it is not appropriate for the Arbitrator to deal with that application.


5. The position of the First Defendant is set out in letters from its solicitors, Blake Lapthorn, of 16 March 2012 and 8 May 2012 that it does not intend to defend the Claims and will abide by the decision of the Court, but that it does not accept that the Claims should succeed and in any event opposes any claim for costs. Accordingly, the First Defendant has not attended the Hearing. The letters are to the effect that the First Defendant wishes not to be involved because it is uneconomic to be involved in such a claim. It is said by Mr Dagnall, Counsel on behalf of the Claimants, that it should be inferred that the true reason is that something has gone seriously wrong, and not that the non-appearance is due to cost. On the material which I have, I cannot draw any inference as to the true reason for the nonappearance of the First Defendant, and so I disregard this as a consideration.


6. The issue of this judgment has been held up by the time that it has taken to obtain an approved judgment of HH Judge Barker QC (sitting as a Deputy Judge of the High Court) which was delivered on 24 July 2013 in which he dismissed an application made by the Claimants against the Arbitrator for the latter’s attendance for cross examination. After some mishaps, I was assisted by both HH Judge Barker QC and the parties in procuring the approved judgment. I shall refer to this further below.


               II Background: The Rent Review            


7. By a lease dated 29 September 2005 (“the Lease”), the premises at 35 Market Street, Falmouth, Cornwall (“the Premises”) were demised by the Claimants to the First Defendant for a term of 15 years from 29 September 2005, with five-yearly upwards-only rent reviews, at the initial rent of £40,000 per annum. The September 2010 review was referred to arbitration. The Arbitrator was appointed under the Second Schedule to the Lease to find the rent which would be paid under a hypothetical lease of the Premises as at the rent review date of 29 September 2010 and with a provision at paragraph 2.4.2 that “the Arbitrator shall afford each of the parties an opportunity to make written counter-representations on any representations made to him by the other party but is not to be in any way limited or fettered by such representations and counter-representations and is to be entitled to rely on his own judgement and opinion.”


8. I can take the facts as summarised in the judgment of HH Judge Barker QC at paragraphs 2- 6 of his Judgment as follows:


                       “2. 35 Market Street comprises a ground floor, designated for class A1 and/or class A3 units with a connected basement; a first floor for letting as an office or residence; and the second and third floor also for letting as an office or residence. The lease was granted as from 29 September 2005 for a term of 15 years at an initial rent of £40,000 per annum. The first rent review date was 29 September 2010. The lease provides for an upwards only rent review which, as per agreement, is to be determined by an arbitrator whose task is to determine, acting as an arbitrator not an expert, the sum at which 35 Market Street might reasonably be expected to be let in the market as at the rent review date, after making specified assumptions, which are set out in paragraph 1.1 of the second schedule of the lease and having no regard to specific disregards which are set out at paragraph 1.2 of the second schedule.                    


                       3. The second schedule also requires that the arbitrator is to be a suitably experienced chartered surveyor, who in the proper agreement between the parties would be nominated by the president of the Royal Institution of Chartered Surveyors. The second defendant was nominated by the president and was appointed on 19 May 2011.                    


                       4. On 30 June 2011 the second defendant issued agreed directions for the conduct of the arbitration which included, 1) representation by surveyors, one for each party, who would submit reports as experts and written responses to each other’s reports, again as experts; 2) there was no point of law in issue between the parties; 3) comparables were to be identified on the schedule and evidence about each comparable was to conform as far as possible with an agreed format of specific requirements; 4) the second defendant was entitled, at his self-discretion, to take the initiative in ascertaining any fact, point of law or other matter. In the event that he did exercise such discretion, the parties were to be informed and to be given an opportunity to comment on both the inquiry made and the response received; and 5) the second defendant also observed the right to hold a hearing, if he considered it appropriate, otherwise the arbitration was to be an “on paper” exercise.”                    


9. I should interpose to amplify these directions as follows. Direction 4 provided that if any point of law arose “I am advised that there is not a point of law affecting the rent review the interpretation of which is disputed by the parties. If subsequently the position changes in respect of a legal point or upon any other matter, I will discuss with the parties the appropriate procedure for settling the dispute”. Direction 5 provided that if during the arbitration a point of law arose then both parties should notify the Arbitrator immediately. In addition to provision for comparables, it was stated that the strict laws of evidence did not apply. Direction 13 provided that the Arbitrator would “not normally be prepared to receive further representations from the parties. If, however, either party comes into possession of fresh evidence during the course of the reference, application for leave to present that evidence may be made at the earliest opportunity”. Direction 18 provided that the Arbitrator might “take the initiative in ascertaining any fact, point of law, or other relevant matter in relation to this reference. In the event I exercise such inquisitorial powers, the parties will be informed and given the opportunity to both comment upon the enquiry to be made and also the response which is subsequently received.” Direction 19 made provision for the arbitrator to obtain advice with notice to the parties. Direction 21 gave an ability for the arbitrator to issue further directions should a point require clarification. Direction 26 contained a liberty to apply.


10. HH Judge Barker’s Judgment continued as follows:


                       “5. In the event Mr Richard Calder submitted a report and response as the claimants’ expert, and a Miss Katie Bapty of Colliers International, Bristol, did the same on behalf of the first defendant.                    


                       6. The experts addressed three closely proximate potential comparables: one at 37/38 Market Street, occupied by Mountain Warehouse, where the rent was agreed on a new lease commencing in October 2009 at £62,500 per annum, which equated to a Zone A Rental of £47,71 per square foot; second, 34 Market Street, occupied by Go Mobile, where a new lease had commenced on 1 March 2010 at a rent of £20,500 per annum producing a Zone A Rental of £42,50 per square foot before certain allowances; and the third, 33 Market Street, occupied by the Card Factory on a lease agreed in February 2011 and completed in May 2011 at an adjusted rent of £38,950 per annum equating to a Zone A Rental of £61,68 per square foot.”                    


11. The element of the Premises commanding the greatest hypothetical rental is the shop element, referred to as the Zone A rental. The Arbitrator did not derive assistance from Go Mobile, as a comparable principally because the Zone A Rental was much smaller and the shop had an obscure frontage. As appears from Section 9.1-9.5 of the Award, the two comparables were:


(1) “the Card Factory Letting” of 33 Market Street, Falmouth, relied upon by the Claimants, by their expert Mr Calder as “the principal and most appropriate item of evidence for consideration” and “the key piece of evidence”, comprising a shop in the same parade two doors away from the Premises and close in size to it. As to this:


(a) The relevant lease was granted on 27 April 2011 (nearly seven months after the review date) at a rent which produced a Zone A comparable at £61.68 per sq. ft. Thislease was granted pursuant to an agreement for lease of 4 February 2011 (4 months after the review date) providing for completion following the surrender of a then existing lease to Toni & Guy.


(b) The Defendant’s surveyor, Ms Bapty referred at paragraph 7.2 to the section of the Handbook on Rent Review (“the Handbook”) and that she had “not attributed much weight” owing to an alleged uncertainty of that tenant over floor areas and the comparator being post the review date


(c) Mr Calder responded to the effect that the contract to grant the lease being dated 4 February 2011 “it is reasonable to assume that the principal negotiations for the let took place and were concluded subject to contract prior to Christmas in the Autumn of 2010” and that the market had settled down since the Lehman collapse. There was in fact no evidence of when the principal negotiations actually took place or were concluded, and Ms Bapty does not refer to negotiations in 2010. Mr Calder said at paragraph 6.9 that “this is the only item of evidence truly well clear of the immediate post Lehman crisis period and therefore the only piece of evidence clearly arguable as being free of the depressive effects of that period.”


(d) Ms. Bapty responded to the effect that there was no reference to negotiations in 2010, the lease was effective from May 2011, and she made a point on floor areas.


(2) “The Mountain Warehouse Letting” relied on by the First Defendant, by Ms. Bapty, comprising 37/38 Market Street, Falmouth, being a shop on the opposite side of the street from the Premises. As to this:


(a) The lease was granted in October 2009 (eleven months prior to the review date) at a rent which produced a Zone A figure of £47.71 per sq. ft.


(b) Mr Calder responded to the effect that post-Lehman the market dropped (in 2009) and then recovered (in 2010) and so the Mountain Warehouse Letting figure was too low for this rent review. He suggested at paragraph 6.0 of his report that “any retail evidence from late 2008/2009 is likely to be negatively and disproportionately affected by the “shock wave” that occurred in markets post failure of Lehman Brothers and the banking and economic crisis of September 2008 and prior to confidence restabilising”;


                       (c) Ms Bapty believed that “retail rental levels in the South West have generally fallen throughout 2009 and 2010 and the evidence in Falmouth is consistent with this.” (paragraph 7.1 of her report). She regarded the Card Factory letting as an anomaly referring to uncertainty about floor areas and the post review date nature of the evidence led her to say that “I have not therefore attributed much weight to the Card Factory transaction.” She attributed “most weight to the open market lettings to Mountain Warehouse and Go Mobile which took place between 6 and 11 months prior to the rent review date. These are supported by the lease renewals at the same time. These are supported by the lease renewals agreed at the same time. In my experience there was a downward trend in retail rents over 2009/2010 and I have therefore taken a rate of £42.50 psf ZA which equates to that of my analysis of the Go Mobile letting next door.”


12.In his counter-representations at paragraph 7.1, Mr Calder summarises the evidence of Ms Bapty in an incomplete way. He says that she accepts that “there was depression in the markets in 2009 and early 2010 which is consistent with my point about the post Lehman effect.” In fact, this summary is incomplete because Ms Bapty takes the view that the depression continued for the entirety of 2010. By contrast, Mr Calder at paragraph 7.3 of his counter-representations says that “it was not until mid-2010 onwards that stability reappeared in relative terms and confidence has grown since.”


13. The Handbook refers to evidence of open market lettings and rent review agreements taking place after the review date as being admissible. It refers to controversy in the cases in this regard, and it cites several cases. The prevalent view is that a comparable after the review date would still have relevance, but the greater the time from the review date to the date of the rent review agreement or open market letting, the more unreliable it would be. At the end of this section, the Handbook contains a gloss on this opinion as to admissibility, namely that “There would seem to remain at least one difference between pre- and post-review date transactions of this type, namely that post-review date lettings and agreements cannot in logic have had any “secondary effect” (as to which paragraph 7.9.3) on market sentiment at the review date. This point goes to weight rather than admissibility…”


               III Background: the Award            


14. The Award was published on 30 January 2012. The Arbitrator decided that the market rent for the Premises was £36,200 and as a result (this being an upwards-only review), the passing rent of £40,000 would continue to be payable.


15. The Arbitrator considered at length the nature of the representations of the parties. My attention was particularly drawn to some of the material at paragraph 3 including 3.5 where Mr Calder’s report at his paragraph 6.2 was cited that “lease renewals are less reliable in my view as they are by definition based on past evidence not necessarily reflective of the current market and can also potentially produce results which are distorted because of matters agreed during private negotiation between the parties.” He also at paragraph 3.6 referred to Ms Bapty’s evidence regarding rental levels having fallen throughout 2009 and 2010.


16.At paragraphs 3.18-3.23, reference was made to the evidence before the Arbitrator relating to the Card Factory letting. The Arbitrator summarised the nature of the evidence of both Mr Calder and Ms Bapty. At paragraph 3.23, the Arbitrator referred to the part of the report of Ms Bapty where she cited the Handbook of Rent Review which said that “evidence of open market lettings taking place after the rent review date is admissible, but that there remains at least one difference between pre- and post- review date transactions, namely that post-review date lettings cannot have any secondary effect on market sentiment at the review date.” Paragraph 3.23 then stated that “Ms Bapty in referring at Paragraph 7.2 to the Card Factory letting as an anomaly states “Due to the uncertainty over the floor areas and the post-review date of the nature of the evidence, I have not therefore attributed much weight to the Card Factory transaction.”


17. The conclusions reached by the Arbitrator and which form the key part of the challenge of the Claimants are at paragraphs 9.4 to 9.6 of the Award which I shall cite in full:


“9.4 Ms Bapty states that the Card Factory letting should not be attributed any significant weight due its [sic] timing post the subject review date and could not have had any secondary effect of influencing a prospective tenant bidding for the subject properly at the review date. Mr Colder contends the transaction was agreed closest to the subject review date by inference drawn from the date on which the agreement to lease was signed.


                       9.5 On the basis of the evidence presented to me by Mr Calder, it was not until 4 months after the subject review date, that Card Factory signed a binding contract on 33 Market Street. Accordingly for this reason, having regard to the established case law on post review date evidence, I prefer Ms Bapty’s approach and have not accordingly attributed any weight to this transaction.                    


                       9.6 The transaction which I find to be the most helpful based on the evidence presented to me is the Mountain Warehouse letting two doors away from the subject premises, 11 months before the subject review date. I therefore feel I can do no better than take the Zone A rate of £47.71 psf ITZA demonstrated by this letting transaction in relation to the ground floor retail unit.”                    


18. The result was to reach a rental figure of £36,200 being less than the current rental of £40,000. The Arbitrator did this by adopting the rental value in respect of the Mountain Warehouse letting. He did not adopt the Card Factory letting at all. In the Award, the Arbitrator referred only to the time between the review and the time of contracts, namely 4 months. The Claimants say that if the Arbitrator had accepted the Card Factory Letting £61.68 psf figure as being the sole appropriate comparable, the rent would have been increased by £7,980pa. This would have given rise to an increase in rental over the sum of £40,000 to a sum of £44,180.


               IV The Claims            


19. The Claimants take issue with the phrase in paragraph. 9.5 “having regard to established case law on post review date evidence”. They say that neither party cited any case law to the Arbitrator and he does not identify any decided cases on which he relies. The Claimants took the view that the Arbitrator had gone wrong in law, and appeared to be relying upon some case law upon which the Claimants had had no ability to comment. Their view was that the established case law stated that post-review date evidence was admissible, whereas the Arbitrator had given no weight to it. The Claimants pointed this out to the First Defendant by a letter dated 3 February 2012 and sought an agreed remission to the Arbitrator on the basis that the Arbitrator would take the Card Factory Letting into account. No response was received.


20. The Claimants investigated further what had actually happened in relation to the Card Factory Letting historically and obtained an email of 16 February 2012 to the effect that “Heads of Terms” were issued to Card Factory in August 2010 (see Vickery Holman (the relevant agents) email of 16 February 2012 “the VH Email”). The terms are not spelt out in this email, but for the purpose of this Judgment, I shall assume that what is being said is that the amount of rent subsequently agreed in the contract between the parties accorded with the amount of rent previously provided in the Heads of Terms.


21. The Claimants served a witness statement of the Second Claimant dated 24 February 2012 in which it was assumed that the Arbitrator had identified relevant law/case law with regard to whether post-review evidence could be adduced, and that had he informed the parties and given them the opportunity to comment on the method of ascertainment or procedure to be adopted, then authorities would have been provided which would have shown that at least some weight should have been given to post-review evidence.


22. On the same day, the Claimants wrote to the Arbitrator, sending a copy of the first of their three claims to the Arbitrator and stating that they took issue with paragraphs 9.5 and 9.6 of the Award. They said that “We cannot understand how you could have reasonably and properly come to such a conclusion in the light of the case-law”, contending that there had been a serious irregularity “arising from your not having notified us of such a point of law or of what case-law to which you were having regard) and that you have erred in law”. The Arbitrator was asked in case Section 57(3) of the 1996 Act applied (namely the ability to correct an award arising from a slip or omission) but in any event “in order to assist matters and the proper resolution of the Claim” that he would:


                       “(1) Set out and explain the case-law to which you had regard and what conclusions you drew from it and how you applied it                    


                       (2) Admit for the purposes of section 68(2)(i) that there have been irregularities in the conduct of the proceedings annexed to the Claim Form                    


                       (3) Withdraw and reconsider the Award and so as to give the Card Factory Letting appropriate weight.”                    


23. The Arbitrator took the view that the requests were unjustified. He wrote on 16 March 2012 stating “my reasons are set out in my Award and I have nothing further to add save that I stand by my Award”.


24. By this time, as noted above, a second claim had been issued so that the claim was issued in the appropriate division: see paragraph 2 above.


               V The Arbitrator’s witness statement            


25. Dissatisfied with this response, the Claimants issued a third claim, joining the Arbitrator as a defendant. In response to this third claim, the Arbitrator filed a witness statement of 1 June 2012 in which he explained that he was referring, in paragraph 9.5 of his Award, to the commentary in the Handbook (which was cited to him by the tenant’s valuer) and he accepts (at paragraph 13) that his reference to “established case law” was “not a well-chosen phrase”. He “used the phrase ‘case law’ loosely, albeit on reflection, mistakenly.” He confirmed that he did not rely on any case law or any other authorities which had not been provided to him by the parties. He also said the following:


a. He had not interpreted the letter of 24 February 2012 as a request under section 57(3) of the 1996 Act (paragraph 14). He did not consider that he was required to provide any further reasons for his Award (paragraph 7). He did not consider it appropriate to be asked to make an admission that he had conducted the reference irregularly and to withdraw his award (paragraph 14);


b. His decision to give no weight to the Card Factory Letting was not just because it was post review date but also because:


a. The Arbitrator had no independent evidence for when its terms had been agreed;


b. There was no evidence that those premises had been openly marketed at the review date, only an inference of Mr Calder;


c. There was no evidence as to the terms of the contractual agreement to lease including as to whether they had been varied prior to grant of the lease;


d. There was no evidence as to whether the previous Toni & Guy lease was contracted-out of the business tenancy protection legislation of Part II of the Landlord and Tenant Act 1954 (“the 1954 Act”) (paragraph 11).


c. The Card Factory Letting’s conditions were satisfied only when it was granted on 27 April 2011, seven months after the review date. There had been volatility after Lehman. A letting 12 months prior to the review date “with market conditions through to the subject review date being known” is a more reliable indicator of value (paragraph 12).


d. He would be prepared to continue to act as Arbitrator on a remission (paragraph 17).


e. If he had thought it appropriate to attach weight to the Card Factory Letting, he would have discounted by 5% for return frontage (“the Frontage Point”) and then, and on the basis that the Card Factory Letting was completed upon satisfaction of its contractual conditions 7 months after the review date, split the difference between the equivalent rates for the Card Factory Letting and the Mountain Warehouse Letting resulting in a reviewed rental of £39,400 [still less than the rental thus far of £40,000 per annum] (paragraph 18).


26. The Claimants responded by service of the third witness statement of Nick Makin of 27 June 2012 setting out queries and alleging that the Arbitrator’s Witness Statement revealed further serious irregularity and grounds for removal. It also proposed cross-examination.


27. The Arbitrator did not respond to this evidence because he took the view that he had already answered sufficiently the reasons for his Award.


28. Master Teverson considered this on paper and simply made an order on 15 March 2013 directing a hearing and making no other ruling.


29. The Claimants’ solicitors (Peregrination) wrote to the Arbitrator’s solicitors (Plexus Law) on 14 May 2013 asking for agreement to all matters being raised, whether the Arbitrator intended to respond to the First Claimant’s third statement and whether he accepted that he ought to be cross examined. The Arbitrator replied (through his solicitors) on 5 June 2013 indicating that he did not intend to file further evidence and that he did not agree to be cross-examined on his evidence (and, implicitly, on his Award).


               VI The application to cross examine the Arbitrator            


30. Dissatisfied with this response, the Claimants issued an application dated 29 June 2013 in which they sought permission to cross-examine the Arbitrator and further orders under section 70(4) of the 1996 Act. They served a fourth witness statement of Nick Makin of 29 June 2013.


31. The Claimants’ various claims and applications were directed to be heard together and were listed for hearing on 22 July 2013 before HH Judge Barker QC. The hearing overran its estimated course and although the Claimants’ case was opened to the Judge in full, the Judge was able to dispose only of the Claimants’ application dated 29 June 2013 to cross-examine the Arbitrator, which was dismissed with costs.


               VII The nature of the challenges to the Award            


32. It is necessary to set out parts of the Arbitration Act 1996 on which the Award is challenged.


                       “1 General principles.                    


                       The provisions of this Part are founded on the following principles, and shall be construed accordingly–                    


                       (a)the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;                    


                       (b)the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest;                    


                       …                    


                       24 Power of court to remove arbitrator.                    


                       (1) A party to arbitral proceedings may (upon notice to the other parties, to the arbitrator concerned and to any other arbitrator) apply to the court to remove an arbitrator on any of the following grounds–                    


                           (a)that circumstances exist that give rise to justifiable doubts as to his impartiality;                        


                           …                        


                           (d)that he has refused or failed–                        


                           (i)properly to conduct the proceedings, or                        


                           (ii)to use all reasonable despatch in conducting the proceedings or making an award,                        


                           and that substantial injustice has been or will be caused to the applicant.                        


                       …                    


                       (4) Where the court removes an arbitrator, it may make such order as it thinks fit with respect to his entitlement (if any) to fees or expenses, or the repayment of any fees or expenses already paid.                    


                       (5)The arbitrator concerned is entitled to appear and be heard by the court before it makes any order under this section.”                    


                       33 General duty of the tribunal.                    


                       “(1)The tribunal shall–                    


                           (a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and                        


                           (b)adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.                        


                       (2)The tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it.”                    


                       34 Procedural and evidential matters.                    


                       (1)It shall be for the tribunal to decide all procedural and evidential matters, subject to the right of the parties to agree any matter.                    


                       …                    


                       52 Form of award.                    


                       (1)The parties are free to agree on the form of an award.                    


                       (2)If or to the extent that there is no such agreement, the following provisions apply.                    


                       (3) The award shall be in writing signed by all the arbitrators or all those assenting to the award.                    


                       (4)The award shall contain the reasons for the award unless it is an agreed award or the parties have agreed to dispense with reasons.                    


                       (5) The award shall state the seat of the arbitration and the date when the award is made.                    


                       57 Correction of award or additional award.                    


                       (1)The parties are free to agree on the powers of the tribunal to correct an award or make an additional award.                    


                       (2) If or to the extent there is no such agreement, the following provisions apply.                    


                       (3)The tribunal may on its own initiative or on the application of a party–                    


                           (a)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)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.                        


                       These powers shall not be exercised without first affording the other parties a reasonable opportunity to make representations to the tribunal.                    


                       (4)Any application for the exercise of those powers must be made within 28 days of the date of the award or such longer period as the parties may agree.                    


                       (5)Any correction of an award shall be made within 28 days of the date the application was received by the tribunal or, where the correction is made by the tribunal on its own initiative, within 28 days of the date of the award or, in either case, such longer period as the parties may agree.                    


                       (6)Any additional award shall be made within 56 days of the date of the original award or such longer period as the parties may agree.                    


                       (7) Any correction of an award shall form part of the award.                    


                       68 Challenging the award: serious irregularity.                    


                       (1)A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award.                    


                       A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3).                    


                       (2)Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant–                    


                           (a)failure by the tribunal to comply with section 33 (general duty of tribunal);                        


                           …                        


                           (c) failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties;                        


                           …                        


                           (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.                        


                       (3)If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may–                    


                           (a)remit the award to the tribunal, in whole or in part, for reconsideration,                        


                           (b)set the award aside in whole or in part, or                        


                           (c)declare the award to be of no effect, in whole or in part.                        


                       The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.                    


                       …”                    


                       69 Appeal on point of law.                    


                       (1)Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings.                    


                       An agreement to dispense with reasons for the tribunal’s award shall be considered an agreement to exclude the court’s jurisdiction under this section.                    


                       (2)An appeal shall not be brought under this section except–                    


                           (a)with the agreement of all the other parties to the proceedings, or                        


                           (b)with the leave of the court.                        


                       The right to appeal is also subject to the restrictions in section 70(2) and (3).                    


                       (3)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.                        


                       …                    


                       (7)0n an appeal under this section the court may by order–                    


                           (a)confirm the award,                        


                           (b)vary the award,                        


                           (c)remit the award to the tribunal, in whole or in part, for reconsideration in the light of the court’s determination, or                        


                           (d)set aside the award in whole or in part.                        


                       The court shall not exercise its power to set aside an award, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.                    


                       …                    


                       70 Challenge or appeal: supplementary provisions.                    


                       (1)The following provisions apply to an application or appeal under section 67, 68 or 69.                    


                       (2)An application or appeal may not be brought if the applicant or appellant has not first exhausted–                    


                           (a) any available arbitral process of appeal or review, and                        


                           (b)any available recourse under section 57 (correction of award or additional award).                        


                       (3)Any application or appeal must be brought within 28 days of the date of the award or, if there has been any arbitral process of appeal or review, of the date when the applicant or appellant was notified of the result of that process.                    


                       (4)If on an application or appeal it appears to the court that the award–                    


                           (a)does not contain the tribunal’s reasons, or                        


                           (b)does not set out the tribunal’s reasons in sufficient detail to enable the court properly to consider the application or appeal,                        


                       the court may order the tribunal to state the reasons for its award in sufficient detail for that purpose.                    


                       (5)Where the court makes an order under subsection (4), it may make such further order as it thinks fit with respect to any additional costs of the arbitration resulting from its order.                    


                       …”                    


33. The starting point of the case of the Claimants was that at paragraph 9.5 of the Award, it was stated that the Arbitrator had “regard to the established case law on post review date evidence”, and accordingly preferred Ms Bapty’s approach. The Claimants submitted that since no case law had been cited, the inference was that the Arbitrator had gone to case law and had sought to apply it without giving the parties the opportunity to comment on it. They submitted that this was not only a serious irregularity, but it was one which caused a substantial injustice. Had the case law been referred to the parties, they would have told the Arbitrator that post-review date evidence was admissible, but its weight was reduced the further one went away from the rent review date. However, it was said, the terms of the Award indicated that the Arbitrator had rejected the post-review date evidence completely on the basis of the case law: this indicated, say the Claimants, that the Arbitrator had misunderstood the case law.


34. The statement of the Arbitrator is that he used the term “case law” to refer to the discussion in the Handbook (paragraph 13 of the statement of the Arbitrator). He said that the expression “case law” was used “loosely, albeit, on reflection, mistakenly”. It is no longer suggested in view of the Arbitrator’s evidence that he referred to material other than that placed before him by the parties. However, this now forms the context of much of the challenge. It is also the case that the Claimants rely upon this in any event in respect of an appeal on a point of law.


35. The next stage of the challenge arises out of the Arbitrator’s response to the initial challenge, namely his above mentioned letter of 16 March 2012 to the effect that his reasons were in the Award, that he had nothing to add and that he stood by his Award. The Claimants’ position is that the Arbitrator’s witness statement is inconsistent with paragraphs 9.4-9.6 of his Award (in that they contain reasoning not in the Award) and with the 16 March Letter (in that there were matters to add to the Award in that the witness statement contained reasoning not in the Award). The Claimants suggest that in view of the subsequent witness statement, the letter of 16 March must have been intentionally untrue when the Arbitrator said that there was nothing to add, he knew that he had omitted matters from his Award.


36. The Claimants say that the conclusion from this is one or more of:


a. The Award did not include all of the Arbitrator’s true reasoning, and “presumably intentionally” so;


b. The March Letter was untrue, and “presumably intentionally” so;


c. The witness statement is untrue, and the Arbitrator has invented (some) reasoning which was not previously in his mind, and “presumably intentionally” so.


37. The Claimants say that in any event, the reasoning set out in Paragraphs 11 and 12 of the Arbitrator’s witness statement:


a. was the Arbitrator’s own thoughts which had not, but should have, been raised by either of the parties;


b. had not been mentioned by the Arbitrator prior to the witness statement;


c. was clearly flawed (and incomplete);


d. involved “new” matters in relation to which the Claimants should have been given the chance to investigate and comment, and which they could have refuted had they been given such a chance;


e. As now stated would lead a reasonable fair-minded observer to conclude that there is at least a real danger that the Arbitrator is at least unconsciously against the Claimants’ case and/or has made pre- determinations against the Claimants, and that the Arbitrator has not reached in the past and can/will not reach in the future a fair and balanced determination.


38.The Claimants say that paragraph 18 of the Arbitrator’s witness statement is a pre-emptive strike and:


a. is flawed and is further inconsistent with Paragraphs 9.4-9.6 of the Award (on the 4/7 month point);


b. would lead a reasonable fair-minded observer to conclude that there is at least a real danger that the Arbitrator is at least unconsciously against the Claimants’ case and/or has made pre-determinations against the Claimants, and that the Arbitrator has not reached in the past and can/will not reach in the future a fair and balanced determination.


c. The Claimants say that in these circumstances, it may simply be impossible (or wrong) to conclude other than that (i) the Arbitrator’s true reasoning in his mind at the time of the Award is not fully stated in it but is otherwise entirely opaque, but that in any event (ii) the Arbitrator has made an untrue statement(s) and made up his mind against the Claimants. In any event, it is submitted that it is clear that (or at least there is a real danger that) the Claimants have not had and will not have a fair hearing of their case from the Arbitrator.


39. It is said in effect that the foregoing matters comprise a failure or refusal to conduct properly the proceedings, contrary to section 24(1)(d) of the 1996 Act and/or a failure to conduct the proceedings fairly and impartially, contrary to section 33(1)(a) of the 1996 Act. Further, the failure to include the true reasoning in the Award was a breach of section 52(4) of the 1996 Act. It is said that this gives rise to serious irregularity, particularly as regards section 68(2)(a), 68(2)(c) and 68(2)(h) of the 1996 Act.


40. The complaints, all relate to the Arbitrator’s decision to reject the Claimants’ primary comparable so as to give “no weight at all” to it (and resulting in a determination less than the original rent so that the Claimants in practice lose and gain no benefit from the arbitration), being that:


a. in the light of Paragraphs 11 and 12 of the Arbitrator’s witness statement, and the matters above:


a. it may be impossible to determine the full truth of why he reached his conclusion, but


b. on the basis that those paragraphs are true, in whole or in part, then the Award does not contain all of his true reasoning, and they reveal other serious irregularity in terms of the Arbitrator’s failure (a) to raise the points with the parties (including the Claimants), and (b) to produce intelligible potentially credible reasoning;


b. in any event, the reasoning in the Award was insufficient for it to be capable of being properly understood, and it remains unclear what the Arbitrator’s reasoning process was for rejecting the comparable; but


c. in any event, and whatever was the Arbitrator’s reasoning, he failed to raise his point with the parties in advance (i.e. in particular the Claimants).


41. There is also a challenge of the Award under Section 69 of the 1996 Act (error of law). In relation to section 69, the Claimants say that it is clear from the face of the Award that the Award itself is founded upon the Arbitrator’s rejecting the Claimants’ comparable on the basis of an incorrect view (not contended for by either party) that he was prevented by case law from accepting evidence of a post event comparator. It is said that in the light of the Award (and the March Letter), it is too late for the Arbitrator either to amend the Award or the reasons set out in it (although that does not prevent the Claimants from asserting that the Award does not contain the Arbitrator’s true reasoning and in consequence is also defective in that circumstance). The Claimants submit that that was a clear error of law, and has caused substantial injustice in itself in that (i) the Claimants’ comparable, upon which their case was properly founded, has been excluded on a bad ground (ii) as a result the Claimants have lost the arbitration when they should (or reasonably arguably should) have won it. The Claimants say that in the light of the Arbitrator’s witness statement, there is a clear danger that the Arbitrator would not deal with any remission to him fairly, and therefore it should not be remitted to him but to a new arbitrator.


               VIII The reference in the Award to “case law”            


42. In one sense, it does not matter that the Arbitrator referred in the Award to “case law” now that it is accepted that he did not refer to something other than the Handbook. However, it is still relevant because it provides a context for the challenge of the letter of 24 February 2012 and for the subsequent response of the Arbitrator which has been challenged as above. It is therefore right that I should set out my view as regards the Arbitrator’s reference to “case law” in paragraph 9.5 of the Award. It does not seem to me surprising for a non-lawyer Arbitrator to characterise the relevant page of the Handbook as “case law”, since the whole page is replete with case law. Of course, a lawyer Arbitrator might have reserved the reference to case law to reports of cases themselves, and the Arbitrator recognised in the context of this criticism that his expression was used upon reflection loosely. The reasoning of the Claimants appears to have been that the reference to case law coupled with the reasoning in paragraph 9.5 of the Award justified a conclusion that cases not before the Arbitrator had been referred to. This then led to the assertion of a “serious irregularity” in the Claimants’ letter of 24 February 2012, namely “arising from your not having notified us of such a point of law or of what case law to which you were having regard”. This was an assumption on the part of the Claimants that the Arbitrator was referring to material other than that which the parties placed before him (as regards the law, limited to the Handbook). In fact, the assumption has now turned out to be unjustified.


               IX Did the Award intentionally not contain all of the reasoning of the Arbitrator?            


43. This claim is inferred by the Claimants from the subsequent witness statement of the Arbitrator which, the Claimants submit, contains additional reasoning. I shall in due course return to the statement, but for the moment, I shall assume that there are additional reasons in the statement not contained in the Award.


44. The claim implies that the Arbitrator has done something irregular by not including in the Award all of the matters which he considered at the time. That such a criticism is not justified can be demonstrated by considering the nature of the exercise of the Arbitrator in giving his award. Under Section 51(4) of the Award, he is required to give reasons for the Award. As Mr Rosenthal, Counsel for the Arbitrator submitted, there are four stages in coming to a decision on market value. The first is to identify the method to be used, in this case, the same by both parties, being the use of comparables. The second is to identify the weight to be given to each comparable. The third is to make any adjustments between the comparable and the property in question. The fourth is to make the final award.


45. An arbitrator is not required to set out each and every reason that he has as to the weight to be given to each comparable. Further, this is not a scientific exercise. There is an evaluation which an arbitrator brings using his expertise as a valuer. In my judgment, the matters set out in the Award sufficed to amount to a statement of the reasons of the Arbitrator. I shall later in this judgment amplify my reasoning to get to that conclusion, referring to authorities where the duties of an arbitrator have been set out. But for the subsequent witness statement of the Arbitrator, there would have been nothing to criticise in terms of the provision of reasons.


46. Having reviewed the matters contained in the witness statement of the Arbitrator, I take the view that insofar as the same amounts to additional reasoning, it does not invalidate the reasoning contained in the Award. I shall below consider in more detail the criticisms especially of paragraphs 11, 12 and 18 of the Award. Insofar as they amount to fuller reasons, they do not invalidate the reasoning which has been given or show that there has been a deviation from the four exercises expected of an arbitrator as identified above. Further and in any event, for reasons which I shall amplify below, paragraphs 11 and 12 do not in my judgment contain substantially different reasoning from the reasoning contained in the Award. Paragraph 18 of the statement does go beyond that which is contained in the Award, but these matters do not arise in the Award because they are adjustments which arise only if weight was to be given to the the Card Factory letting, which on the Award, it was not.


47. It therefore follows that it is not necessary to analyse in respect of each and every additional matter in the statement whether they were in the mind of the Arbitrator at the time when he made the statement. Since the reasoning given is adequate in order to be the subject of an award, there is nothing to criticise the omissions, bearing in mind the nature of these omissions and the nature of the duty of the Arbitrator, which does not require that every matter which occurred to the Arbitrator be included in the Award.


               X Was the March letter intentionally untrue in saying that there was nothing to add?            


48. I now refer to the March letter. This has to be seen in the context of the Arbitrator being asked in the letter of 24 February 2012 to admit irregularities about the Award and to withdraw and reconsider it. The challenge was expressed primarily as not coming within section 57(3) of the 1996 Act, and does not come within that narrow provision. An arbitrator, faced with the challenge to admit irregularities, to withdraw and reconsider his Award, is entitled to be concerned. This is especially so bearing in mind how limited are the circumstances in which he would have jurisdiction to withdraw or alter his Award.


49. The Arbitrator was put in a difficult position by the terms of the letter of 24 February 2012. The letter was critical of the Arbitrator and sought from the Arbitrator an admission that he had acted irregularly based upon a misunderstanding as to the material upon which the Arbitrator had relied. I do not have to rule on whether or not it was appropriate to ask the Arbitrator to admit irregularities. However, I entirely accept that the Arbitrator was entitled to reply very shortly in the way in which he did, that is to stand on the Award itself. He was not saying that he did not have other matters in mind at the time of the Award, but simply that the Award contained the reasons for the Award. Based on the analysis of what is expected of an arbitral Award, this is correct. Thus, for example, if he had in mind the considerations in paragraph 18 of his subsequent statement, these were not reasons for the Award. The reasons for the Award were in the Award itself and there was nothing to add.


50.This conclusion is reinforced by considering the matters in the Arbitrator’s witness statement and whether any of those matters ought to have been mentioned in the Award. The words in paragraph 11 in the sentence beginning “for the avoidance of doubt” where the Arbitrator sets out the weighing of evidence which he undertook is saying the same as that which was set out in the Award at paragraphs 9.4 – 9.6. The matters set out in the numbered sub-paragraphs of paragraph 11 of the statement of the Arbitrator did not require to be mentioned because they were matters as to which there was no evidence. They are not matters which the Arbitrator was required to raise with the parties because it was not for him to decide what further evidence was required but to judge the case on the basis of the evidence adduced by the parties. Further, even if one considers these matters as implying some additional points, they are not matters outside the ambit of the reasoning in the Award or inconsistent with the Award. On the contrary, they are an amplification of the reasoning in the Award that not only was the contract in respect of the Card Factory letting months after the review date, but there was no evidence of details in respect of the transaction which have affected the weight to attribute to that transaction. If these matters had been included in the Award, they would not have affected the meaning or reasoning of the Award. The fact that these matters were not mentioned does not affect the fact that the Award sets out the principal reasoning of the Arbitrator for the Award. I shall set out below the duties of an arbitrator as regards what should be in an award. An arbitrator is not required to identify every single nuance or matter to be taken into account. In my judgment, the failure to set out in the Award the matters set out in paragraph 11 of the Arbitrator’s witness statement does not render the Award irregular or otherwise defective.


51. As to paragraph 12, whilst it refers to the date when the contract became unconditional rather than the date of the contract, does not contain anything overall substantially different from that which is in the Award. It simply provides a further dimension and possible consideration which is, in my view, valid. I do not accept from the fact that the Arbitrator mentioned this longer period in his statement that in his Award he must not have had regard to the shorter period of 4 months. On the contrary, the Arbitrator must have mentioned the period of 4 months in the Award because he gave substantial weight to that period. The 7 month period is an amplification of that point, because there is a further related point that the contract was only conditional and did not become unconditional for a further 3 months, that is to say 7 months after the review. Whether the Arbitrator did have regard to the 7 month period or not at the time of the Award does not matter. This point of amplification does not affect the overall sense of the Award and its absence in the Award is not a point of significance (whether or not he had it in mind at the time of the Award), having regard to the fact that the Award expressed the broad sense of why the Arbitrator reached his decision, without having to identify and explain every factor which weighed in his appraisal of the evidence.


52. Further, paragraph 12 also referred to the evidence about volatility of the market in 2009-2010 and to the difference in this regard between the experts. The Arbitrator did not expressly deal with this point, but he was not bound to do so. It was simply an aspect of the matters which he was entitled to take into account. It should be noted that this was not some evidence from a source which was not before the Arbitrator upon which he would have had to alert the parties. If and to the extent that this point may have weighed on the mind of the Arbitrator, the Award expressed the broad sense of why the Arbitrator reached his decision, without having to identify and explain every factor which weighed in his appraisal of the evidence.


53. It follows from the above that in respect of each of the matters referred to in the witness statement at paragraphs 11 and 12, either they were in the mind of the Arbitrator at the time of the Award and the letter of 16 March 2012 and they did not need to be mentioned in the Award, or they were not at that point in his mind, and his reference to them subsequently in the witness statement does not invalidate anything which he included in the Award. Looked at either individually or as a whole, there was no need to include these matters in the Award.


54. As to paragraph 13, this is simply the reference to the meaning of the expression “case law”. As to paragraph 18, this does go substantially beyond the Award because he is there considering the attribution of weight to the Card Factory letting if he had attributed any weight to it, which he did not. He did consider that he preferred the argument that an allowance should be made for the return retail display frontage to the Card Factory Unit of 5% reducing the Zone A rent. However, he took the view that he did not need to address it because of his decision not to attribute weight to the Card Factory Unit. On this premise, there was nothing that the Arbitrator was holding back from his reasoning process in the Award. There was no need to include this line of reasoning in the Award, and so the matters in paragraph 18 looked at individually or collectively with the other matters relied upon by the Claimants were not required to be in the Award.


55. In this case, in terms of giving reasons, the Arbitrator has fulfilled each of the four stages referred to above, namely to identify the method to be used, that is the comparables, to identify the weight to be given to each comparable, to make any adjustments between the comparable and the property in question and to make the final award.


56. Accordingly, the Arbitrator had good reason to say on 16 March 2012 that his reasons were in the Award, that he had nothing to add and that he stood by his Award. In any event, there is no reason to believe that he was not telling the truth when he said this. In my judgment the probability is that either he had in mind additional matters which he did not feel he had to include in his Award or the additional matters did not come to his mind at the time of the preparation of his written Award, but he did reflect upon them when pouring over the Award in the context of the challenge of the Claimants. In either event, the criticism of the Arbitrator’s letter of 16 March 2012 is not justified. I have found that the Arbitrator’s letter of 16 March 2012 was neither inaccurate nor inappropriate, and I reject the submission that the letter was intentionally untrue.


               XI Was the witness statement untrue in that the Arbitrator invented intentionally some of the reasoning which was not previously in his mind?            


57. It is important first to set the witness statement in context. It was made following an application under Section 70(4) of the 1996 Act, which was an application to seek that the Arbitrator gave further reasons for his decision. Of course, by definition, an order under Section 70(4), if made, would give rise to matters being set out which were not in the Award. It might be with the advantage of hindsight that it would have been better for the Arbitrator to have stood on the Award, save in respect of the clarification that the reference to “case law” was confined to the extract from the Handbook. Whilst the Arbitrator may have thought that it was constructive to pre-empt an order under Section 70(4), in fact it has opened up a series of challenges by reason of the matters contained in his statement, to which I now refer.


58. I now return to the terms of the witness statement. I have already found that paragraphs 11 and 12 do not contradict the Award, and that it does not matter whether any of these matters were or were not in his mind at the time of the Award. Further, I agree with the Arbitrator as regards paragraph 18, that the information there set out was not required for the Award. The first part of the reasoning in that paragraph, namely allowance for the return retail display frontage to the Card Factory Unit of 5% reducing the Zone A rent, was according to him a part of this reasoning at the time, but regarded by him as unnecessary for the Award. The wording in the second part of paragraph 18 about the bottom line figures to apply if he had taken into account the Card Factory Unit does not contain language to the effect that this was a part of his reasoning at the time. It seems to be a hypothetical reconstruction of what would have happened if he had taken into account the Card Factory Unit at the time. In my judgment, it makes no difference whether this was a part of his thought process at the time or not. If he had had this thought process at the time, he would have found it unnecessary to include this reasoning in his Award in view of this conclusion not to attribute weight to the Card Factory Unit.


59. It seems to me that the submission that the Arbitrator invented intentionally an untruth is based on the false premise that had the Arbitrator had these unmentioned matters in mind in his Award, he would have been bound to mention each of them. For the reasons set out above about the nature of the Award, he was not bound to mention every matter which occurred to him at the time, but simply to set out the principal reasoning. I shall refer below to the case law in this regard. It is also based on a false premise because at least in part, the Arbitrator did distinguish in the statement between matters which he had in mind and did not have in mind at the time of the Award. In the second part of paragraph 18, he is not saying that he had this in mind at the time. As regards the first part, he does appear to be saying that he had this in mind at the time, but that it did not arise for determination in the Award because of his conclusion as to the Card Factory Unit. However, it does not matter whether he had these matters in mind at the time or not because, as already noted, the amount of any discount did not arise having regard to the conclusions in the Award.


               XII The specific criticisms of the Arbitrator’s witness statement            


60. I now turn to the specific criticisms which are set out at paragraph 37 above concerning paragraphs 11 and 12 of the Arbitrator’s witness statement. First, it is said (paragraph 37a above) that the Arbitrator’s thoughts about the evidence before him ought to have been raised with the parties. I do not accept that the Arbitrator had a duty to raise the matters referred to in paragraph 11 as to which there was no evidence. It was not for him to comment to the parties upon matters not before him. The Arbitrator did not have a duty to ask for evidence as to the time when the Card Factory Unit was being openly marketed or was agreed as referred to in paragraph 11 of the Award. It is not suggested that there was evidence before him which he overlooked. The fact that some evidence was produced on 16 February 2012 which, as I shall assume, was to the effect that the original heads of terms were agreed in August 2010, is something which should have been placed before the Arbitrator prior to the Award, if it was considered important by the Claimants. It is no answer to say that it was not obtained before the Award because the Arbitrator had not articulated the fact that the absence of various points of evidence was significant. That is to confuse the role of the parties in adducing the evidence with the role of the Arbitrator which is to decide the case according to the evidence before him. In that process, the Arbitrator can note what evidence is not before him.


61. The second and fourth criticisms (paragraph 37b and 37d above) are that the Arbitrator had a duty to mention these matters and that he failed to give the Claimants the chance to investigate these matters. I reject these criticisms for the same reasons. The Claimants are confusing the role of the Arbitrator with that of the party adducing evidence.


62.The third criticism is that parts of the reasoning of the Arbitrator are flawed or incomplete. The Claimants take exception to the fact that paragraph 12 refers to the fact that there was a gap of 7 months between the subject rent review date and the date when the Card Factory letting became unconditional by completion, whereas the Award refers to the time between the rent review date and the contract for the lease, namely 4 months. I do not accept from the fact that the Arbitrator mentioned this longer period in his statement that in his Award he must not have had regard to the shorter period of 4 months. On the contrary, the Arbitrator must have mentioned the period of 4 months in the Award because he gave substantial weight to that period. The 7 month period is an amplification of that point, because there is a further related point that the contract was only conditional and did not become unconditional for a further 3 months, that is to say 7 months after the review. Whether the Arbitrator did have regard to the 7 month period or not at the time of the Award, this point of amplification does not affect the overall sense of the Award and its absence in the Award is not a point of significance, having regard to the fact that the Award expressed the broad sense of why the Arbitrator reached his decision, without having to identify and explain every factor which weighed in his appraisal of the evidence.


63. The fifth criticism about bias in this section includes that a reasonable fair-minded observer would conclude that the Arbitrator has not reached in the past a fair and balanced determination affecting his judgment for the future. Whilst this point is raised primarily as regards the future (whether in the event that I should interfere with the Award, there should be a remission or a removal of the Arbitrator), I reject the criticism that any of these matters show that the Arbitrator has not reached in the Award itself a fair and balanced determination. As regards whether the witness statement should preclude the Award being remitted to the Arbitrator because of the challenge of a perceived pre-determination of the issues, it is first necessary to consider whether there are grounds to set aside and/or remit the Award.


64. I now refer to the criticisms of paragraph 18 of the Arbitrator’s witness statement referred to at paragraph 38 above. As regards the inconsistency point in respect of the 4/7 month point (paragraph 38a), I refer to my rejection of this inconsistency above. As regards the bias point (paragraph 38b), the same points apply as in the paragraph above, namely no bias as regards the past, and no decision on this point until after I have decided whether there are grounds to interfere with the Award.


65. As regards the criticism of paragraph 18, it is said that it also inconsistent with paragraphs 9.4-9.6 of the Award on the 4/7 month point. I have referred to that above.


66. I now refer to the criticism at paragraph 38c above, that it may simply be impossible (or wrong) to conclude other than that (i) the Arbitrator’s true reasoning in his mind at the time of the Award is not fully stated in it but is otherwise entirely opaque, but that in any event (ii) the Arbitrator has made an untrue statement(s) and made up his mind against the Claimants. The exercise has to be to look at the Award first. Having looked at the Award, I see the reasoning stated in accordance with that which one would expect of an arbitrator. His reasoning is not opaque and it is not incomprehensible, contrary to that which has been submitted. I refer to paragraph 55 above where I found that in terms of giving reasons, the Arbitrator had fulfilled each of the four stages expected of an Award as identified in paragraph 44 above.


67. I then have regard to the witness statement. I have referred in detail above to the statement and to its inter-relationship with the matters set out in the Award. Having considered this above, I do not regard the matters set out in the statement as showing that the true reasoning has not been set out in the Award or that the Arbitrator has made any untrue statements. Further, as indicated above, nothing that I have seen casts doubt in respect of the actual or apparent impartiality of the Arbitrator in respect of the Award itself. As regards the effect of the Arbitrator’s witness statement in the event that the matter were remitted to the Arbitrator, this does not arise until and unless there are grounds to interfere with the Award.


               XIII The challenges under Section 68 (serious irregularities)            


68. In the light of my conclusions thus far, I now consider the challenges under Section 68 on the basis of a serious irregularity. In relation to these, there needs to have been a serious irregularity being something within one of the categories of section 68(2) which has caused or will cause substantial injustice to the Claimants. The relevant categories comprise section 68(2)(a) failure by the tribunal to comply with section 33 (general duty of tribunal), section 68(2)(c) failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties and section 68(2)(h) failure to comply with the requirements as to the form of the award by including in it the reasons for the award (also contrary to section 52(4) of the 1996 Act).


69. The Claimants complain about the Arbitrator having relied on points or matters formed in his own mind, but not raised or contended for by either side. To that end, the Claimants rely on Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14 at 15K where Bingham J said the following:


                       “If an arbitrator is impressed by a point that has never been raised by either side then it is his duty to put it to them so that they have an opportunity to comment. If he feels that the proper approach is one that has not been explored or advanced in evidence or submission, then again it is his duty to give the parties a chance to comment. If he is to any extent relying on his own personal experience in a specific way, then that again is something that he should mention so that it can be explored. It is not right that his decision should be based on specific matters which the parties never had the chance to deal with, nor is it right that a party should first learn of adverse points in a decision against him. That is contrary both to the substance of justice and to its appearance, and on the facts of this case I think the Landlord’s case is made out.”                    


70. Whilst this was the law before the 1996 Act, the same has been followed and applied under the 1996 Act in Vee v Econet [2005] 1 Lloyds Law Rep 92 at paragraphs 14 and 82-4. In the former case decided on the pre-1996 Act law, one of the criticisms of the arbitrator was that he was taking into account in the context of a rent review the basic condition of the premises requiring considerable expenditure which was not contended for or commented upon by either party. Bingham J stated that the rules of natural justice required that in the event that the Arbitrator was impressed by a point that has never been raised by either party, then it was his duty to put it to them so that they had an opportunity to comment. If the proper approach has not been explored or advanced in evidence or submission then it is his duty to put it to the parties so that they have a chance to comment.


71. In the latter case of Vee v Econet, decided post-the 1996 Act, it was accepted that the Arbitrator employed arguments of law and construction which had not been relied upon at the hearing. In so doing, it was held by Colman J that the Arbitrator was neither acting fairly nor giving each party a reasonable opportunity of putting its case: see paragraphs 14, 84.


72. It is also said that if it was permissible in the circumstances for the Arbitrator to add to his reasons by the witness statement, that was subject to an opportunity being given to the parties to make representations by reference to the matters which concerned the Arbitrator: see by way of analogy the practice in court litigation as explained in English v Emery Reimbold & Strick Ltd [2002] 1 WLR 377 and London Borough of Havering v MacDonald [2012] UKUT 154 (LC)).


73. I take as the starting point that which is contained in the Award itself. The Court must consider the criticisms made by reference to the reasoning in the Award. I look to the witness statement of the Arbitrator not to find a supplementary Award, because it is nothing of the sort. The reasoning should be in the Award and not in a statement made in the context of the challenge against the Award.


74. However, the reasoning in the statement can lead to criticisms of the Award in respect of the reasons not being in the Award and/or the reasoning process contained in the subsequent document in some way undermining the reasoning contained in the Award. I have therefore subjected the Award to the scrutiny of the kind which the Claimants have done.


75. Despite so doing, I have not been able to accept the submissions made by the Claimants. Looking at the Award itself, it is now accepted that the reference to case law is not to case law beyond that which was submitted by the parties: the Arbitrator used the summary of the law contained in the Handbook. It is said that the Arbitrator committed an error of law by misapplying that which was in the Handbook. I shall consider that when I deal with the challenge on a point of law under section 69, but for the purpose of section 68 alone, I do not accept that a misapplication of the law provided to the Arbitrator gives rise to an irregularity in the sense of deciding the case on the basis of arguments or material not put to the Arbitrator without the opportunity for the parties to consider the same.


76. As regards the matters set out in paragraph 11 of the witness statement, where the Arbitrator pointed out what was not before him, I do not accept that this indicates an irregularity by these matters not having been raised specifically with the parties. The Arbitrator pointed out areas where there was no evidence before him. This is not to rely on a new point of which the parties had no knowledge. It is for the parties to identify what evidence is required and to adduce evidence accordingly, and it is for the Arbitrator to decide the matter on the basis of the evidence before him.


77. In coming to his Award, the Arbitrator is entitled to bear in mind what is not in the evidence, and it is for the parties and not the Arbitrator to decide what evidence to adduce. In this instance, where specific attention had been drawn to the fact that the exchange of contracts in respect of the Card Letting unit was 4 months after the rent review, it was obvious that there was no evidence before the Tribunal concerning an agreement in principle at an earlier stage. It is not a criticism of the Arbitrator if the Claimants are able to establish that they would have sought to adduce evidence of such an earlier agreement in principle if told about the missing gap. The attempt to refer to evidence after the publication of the Award about when negotiations started in respect of the Card Factory unit is too late. There was no irregularity.


78. As regards the material in paragraph 18, if this had been in the Award itself, I should have had to consider the extent to which these matters were before the Arbitrator, and, to the extent that they were not, the extent to which the Arbitrator should have alerted the parties to this. As it is, I do not have to consider this because this reasoning is not in the Award and does not touch upon the Award. It would only have come into play if the Award had been in different terms. I have already indicated why the Award was not defective without this reasoning. Thus, there has not been an irregularity in respect of these matters by not seeking the parties’ submissions or evidence in respect of the same.


79. As to other ways of finding an irregularity, I refer to the various matters referred to in paragraphs 37 and 38 above and to my consideration of each of these criticisms. I have rejected each of these criticisms and so I reject the case that any of these matters on the facts of this give rise to an irregularity under section 68 of the 1996 Act or to a breach of the general duty or other duties referred to in section 33 of the 1996 Act.


80. It is said that this was either a flaw in the reasoning or a failure to state reasons adequately and that this means that there is a substantial doubt as to whether there was a flaw in the decision making process (procedural or error of law) in relation to a material matter. It is important to note what has been said as regards what a judgment must contain: see English v Emery Reimbold Strict Ltd by Lord Phillips MR at paragraph. 19, namely that


                       “… the judgment must enable the appellate court to understand why the judge reached his decision. This does not mean that every factor which weighed with the judge in his appraisal of the evidence has to be identified and explained. But the issues the resolution of which were vital to the judge’s conclusion should be identified and the manner in which he resolved them explained. It is not possible to provide a template for this process. It need not involve a lengthy judgment. It does require the judge to identify and record those matters which were critical to his decision. …”                    


81. It has been said that the standard expected of an arbitral tribunal is less onerous than the duty of a court as regards giving reasons for its decision. However, in the case of Compton Beauchamp Estates Ltd v Spence [2013] EWHC 1101 at paragraph 50, Morgan J said that he did see any particular reason why the duty on an arbitrator chosen for his experience in the relevant expert discipline to explain why he has preferred one expert to another should be fundamentally different from the duty on the court in such a case.


82. In the case of South Bucks DC v Porter (No.2) [2004] 1 WLR 1953 at paragraphs 35-36, Lord Brown summarised the position (in the context of reasons for planning decisions) as follows:


                       “The law summarised                    


                       35 It may perhaps help at this point to attempt some broad summary of the authorities governing the proper approach to a reasons challenge in the planning context. Clearly what follows cannot be regarded as definitive or exhaustive nor, I fear, will it avoid all need for future citation of authority. It should, however, serve to focus the reader’s attention on the main considerations to have in mind when contemplating a reasons challenge and if generally its tendency is to discourage such challenges I for one would count that a benefit.                    


                       36 The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the “principal important controversial issues”, disclosing how any issue of law or fact was resolved. Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision. The reasoning must not give rise to a substantial doubt as to whether the decision-maker erred in law, for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds. But such adverse inference will not readily be drawn. The reasons need refer only to the main issues in the dispute, not to every material consideration. They should enable disappointed developers to assess their prospects of obtaining some alternative development permission, or, as the case may be, their unsuccessful opponents to understand how the policy or approach underlying the grant of permission may impact upon future such applications. Decision letters must be read in a straightforward manner, recognising that they are addressed to parties well aware of the issues involved and the arguments advanced. A reasons challenge will only succeed if the party aggrieved can satisfy the court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision.”                    


83. For the purpose of this judgment, I shall take the law on the basis that the most rigorous of the above standards applies in this case. I shall also take it that the obligation to comply with the duties as regards the four stage process and in particular informing through the Award the parties of the summary of the reasons for the Award are fundamental to the process. Indeed, it has been held that in the context of an arbitration, it is strongly arguable that unless a party knows the reason for the award against him, there will be an automatic substantial injustice: see Benaim v Davies Middleton (2005) 102 Cons LR 1 per HH Judge Coulson QC (as Coulson J then was) at paragraph 95 (albeit that in Compton Beauchamp Estates Ltd v Spence at paragraph 55, Morgan J did not rule out the possibility that there would be cases where substantial injustice would not automatically flow from every failure of reasoning).


84. Notwithstanding this, I reject the submission that there has been a flaw in the reasoning or a substantial doubt as to whether there was such a flaw in the decision making process. In my view, the Arbitrator followed the four stages which were expected of him in his Award to which I referred above. He weighed the evidence and decided the matter on the weight to be given as to the comparables in a way which the Claimants do not like, but which is unexceptionable as an award. I find that his reasons are adequately set out and there is no flaw in his reasoning of the kind alleged. Whether there is any difference between the arbitral process and the judicial process as regards the reasons expected in a judgment or award, I hold in this case that the reasoning in the Award would satisfy a judgment or an award. I refer to and repeat my reasoning above about the specific paragraphs of the Arbitrator’s witness statement (especially paragraphs 11, 12 and 18) to the effect that the Arbitrator was not obliged to include these matters in the Award.


85. I have also considered the submission that the matters not included in the Award, but which appear in the Arbitrator’s witness statement, raise a question both as to what was in the mind of the Arbitrator at the time of his Award and as to what are the real reasons for the Award. I have considered the witness statement in detail above. In my judgment, the fact that there may have been other matters which were taken into account, but not mentioned in the Award, does not impugn the Award in this case, having regard to my analysis of the witness statement above. The Award complied with the various formulations which I have summarised above of what is required of an Award, providing sufficient information as regards why the matter was concluded in the way in which it was and the principal reasons for the decision. It follows that there was not a breach of section 52(4) of the 1996 Act or an irregularity within section 68(2)(h).


86. I have considered each of the criticisms which have been submitted to me in this case. I have in particular considered the case of serious irregularity within all of the categories contained in section 68(2) relied upon by the Claimants. I have not found any irregularity, and accordingly I reject the case under section 68.


87. I have not found an irregularity. That suffices for the purpose of disposing with the challenge under section 68, but if I had found the existence of an irregularity, I should still have had to find whether there had been “substantial injustice”, which I shall mention below.


               XIV The challenges to the Award under Section 69 (error of law)            


88. This is governed by section 69 of the 1996 Act (and with the Court’s power to require further reasons under section 70(4) of the 1996 Act) and CPR 62 PD12.1. The Court looks here to the Award itself rather than the subsequent statements.


89. The Claimants seek to derive three questions of law from the Award, namely (and I am quoting here from the Claimants’ submissions and the way in which the Claimants characterise the questions and the appropriate answers to the questions)


1. ‘Whether a post review date transaction contractually agreed four months after the review date (the Card Factory Letting) is admissible and has potential weight in relation to “primary” effect i.e. as evidencing the state of the market on the review date”. The Claimants say that the answer is “Yes” in the light of the relevant case law, but that the Arbitrator has “clearly” answered it “No” in particular at paragraph 9.5 of the Award, giving no weight at all to the Card Factory letting comparable.


2. “Whether the fact that a transaction is contractually agreed four months after the review date (the Card Factory Letting) means that the Arbitrator must not give it any weight or if not then is pointed towards not giving it any weight?” The answer is “No”, but it is contended that the Arbitrator has “clearly” wrongly answered it “Yes”.


3. “Whether a reasonable Arbitrator in the position of the Arbitrator could in the circumstances of the arbitration logically and reasonably and properly give the Card Factory Letting no weight and simply apply the Zone A per sq ft figure (£41.47) derived from the Mountain Letting?”; and the answer to Question 3 is “clearly” “No”.


90. It was submitted on behalf of the Claimants that I should bear in mind the fact that the First Defendant had not sought to oppose the application for permission to appeal on a point of law. For the reasons set out above, I draw no inference from the fact that the First Defendant has not appeared or taken part in the application. Likewise, I attach no significance to the absence of submissions on the part of the Arbitrator. He through his Counsel has taken the view that this part of the application is not directed to him, and that it would be improper for him to make submissions directed to this. Nevertheless, it is apparent indirectly from other points of his submissions that he does not accede to the application.


91. It is therefore necessary for me to consider whether the requirements under Section 69 for such an application are satisfied and whether the Court should give permission to appeal.


92. It is said that the Arbitrator has decided not to give limited weight to the Card Factory Letting as per Ms Bapty, but that he determined not to give it “any weight” (Paragraph 9.5) and seems to have based this on a matter of law and notwithstanding that even Ms Bapty was not contending for such a result. It is this which has led to the formulation of the three questions referred to above.


93. I do not accept that this is the correct analysis. At the heart of the submission for the Claimants is the contrast between the language of paragraph 9.5 of the Award and paragraph 7.2 of the report of Ms Bapty. Whereas Ms Bapty reported that she had not attributed much weight to the Card Factory transaction having regard to uncertainty over floor areas and the post review nature of the evidence, the Arbitrator said that “having regard to the established case law on post review date evidence” he preferred Ms Bapty’s approach and has “not accordingly attributed any weight to this transaction.”


94. I do not find it appropriate to subject the syntax of the Award to that degree of rigour as if it were the construction of a statute. For my part, I regard the difference in context between the two expressions: “not much weight” of Ms Bapty, and “not attributed any weight” of the Arbitrator as insignificant. When one looks at the calculations of Ms Bapty and at the substance of the matter rather than the precise words used, there is no indication that she has attributed any weight to the Card Factory transaction which she regards in any event as anomalous. I therefore do not accept that there is a significant distinction between the amount of weight attributed to the Card Factory letting by the Arbitrator and that attributed by Ms Bapty.


95.Further and in any event, the wording used by the Arbitrator is simply that he had regard to the case law on the post review date evidence. He does not say that the effect of the law is that he is required to give no weight to the Card Factory Letting. On the contrary, he quoted paragraph 7.2 of Ms Bapty’s report at paragraph 3.23 of the Award, referring specifically to the point that post-review lettings are admissible as evidence, but that they cannot have any “secondary effect” on market sentiment at the review date. At paragraph 9.4 of the Award, he referred to Ms Bapty saying that the Card Factory Letting should not be attributed any significant weight due to its timing post the subject review date and could not have had any significant effect of influencing a prospective tenant bidding for the subject property at the review date. Whilst the syntax of this sentence is not as clear as might be, I do not understand it as saying that post review letting evidence is inadmissible. The fact that the Arbitrator specifically adverted to the secondary effect having no weight means that he was not referring to the post review evidence being inadmissible: were that the case, there would have been no point in referring to the secondary effect point.


96. In this context, I understand paragraph 9.5 to be his assessment on the facts of the case, and having regard to the case law, that he should prefer Ms Bapty’s approach and so he has not given any weight to the Card Factory Letting. I therefore reject the Claimants’ characterisation of there being a point of law as set out in all or any of the three formulations above or the submission that the Arbitrator has made any of the rulings of law which he is said to have made. There is no point of law either expressed or to be read by implication or otherwise in or into the Award as regards admissibility of the post-review letting. Similarly, there is no point of law either expressed or to be read by implication or otherwise in or into the Award that the Arbitrator must not give a post-review letting any weight or if not then as pointing towards not giving it any weight. Similarly, there is no point of law either expressed or to be read by implication or otherwise in or into the Award as to whether a reasonable arbitrator could have come to the conclusions which this Arbitrator did.


97. On the contrary, I find that if there is any complaint, it is the fact that the Arbitrator has not given any or any sufficient weight to the Card Factory Letting comparable. That is a matter about which the Claimants cannot complain: that is what they appointed the Arbitrator to do, namely to use his expertise in weighing the evidence before him and to come to his conclusion as to which comparables he should take into account and the weight to give to each. All factual matters including the weighing of evidence are for the Arbitrator.


98. In coming to the conclusion that this case does not raise a question of law, I bear in mind the following additional matters, namely


a. There is no issue of law identified by the parties: on the contrary, the terms of reference indicated that there was not believed to be a point of law;


b. There did not arise a point of law during the course of the proceedings before the Arbitrator;


c. It is accepted that the reference to case law was to the Handbook of Rent Review;


d. For the reasons which I have indicated, I do not accept the submission that the Arbitrator found that the evidence about the Card Letting factory was inadmissible.


99. In Safeway Stores v Legal and General Assurance Society Ltd. [2005] 1 P & CR 129, Lewison J said at paragraph 8 “As to subparagraph, (b) [that the question is one which the tribunal was asked to determine] the tribunal must have been asked to determine the question, but I do not think that the question needs to have been raised with the precision of a construction summons. All that is needed, in my judgment, is that the point was fairly and squarely before the Arbitrator, whether or not it was actually articulated as a question of law.” None of the three points identified by the Claimants was “fairly and squarely” before the Arbitrator. In the circumstances, I do not accept that the questions of law identified by the Claimants or any other points arose for the consideration of the Arbitrator or that he answered the three points in the manner indicated in the Claimants’ submissions.


100. If I were wrong about the above, I should have to consider whether determination of the appeal question would substantially affect the rights of one or more of the parties. In coming to that conclusion, I refer to the judgment in Safeway Stores v Legal and General Assurance Society Ltd. above in which Lewison J said at paragraph 7:


                       “The first point to make about s.69(3) is that in subparagraph (a) it has to be demonstrated that the determination of the question will substantially affect the rights of one or more of the parties, and not that it may do. Must each question individually have that substantial effect? In my judgment, no. It would be sufficient, if taken together, they will substantially affect the rights of one or more of the parties.”                    


101. In my judgment, the determination of the question would not substantially affect the rights of one or more of the parties. The reason for this is that the finding of the Arbitrator was broadly a rental of about £36,200 per annum, and the highest that the Claimants have contended for is potentially about £44,180 per annum. Without adopting any of the reasoning contained in paragraph 18 of the Award, this would lead to a figure somewhere in between. Even if the figure is nearer £44,180 than £36,200 and therefore beating the previous rental of £40,000 (it being the case that the rent could only be reviewed upwards), the question of law could only have effect of up to about 10%, which is very small when considering figures as low as £40,000 per annum. Even allowing for the submission that there could be an effect beyond the next 5 years in the event that rents stayed depressed, and the submission that the costs of the parties were at stake, I still consider that the probability is that the sums are not sufficiently substantial to conclude that the determination of the question will substantially affect the rights of one or more of the parties.


102. On the basis, contrary to the above, that there was a question of law which the Tribunal was asked to determine, I must consider whether the other headings are satisfied. First, on the basis of the findings of fact of the Tribunal, are either of the gateways in paragraph 69(3)(c) satisfied? It is not established that the Tribunal was “obviously wrong” to find that the Card Factory Letting should be given no weight on the facts as he found them. Looking primarily at the Award and the materials referred to therein, the threshold that it is not only wrong, but that it is obviously wrong is not satisfied. I say this because if I were wrong that there was no point of law and that none of the three questions posited arose, then neither is there an obvious question nor is there an obvious answer of law. If I were wrong about all of that, then there is no obviously wrong answer: see section 69(3)(c)(i). Further, even if any of these matters amounted to questions of law, which I do not accept, there is no issue here of general public importance because the questions are around this particular case with no general importance, and even the first question posited about admissibility is in respect of law which in this area is established: see section 69(3)(c)(ii).


103. The Claimants also say that it is just and convenient in all the circumstances for the court to determine the questions which they say arise as points of law because the Arbitrator did not raise the relevant case law with the parties or the “primary” effect issue with the parties or the materiality on the “primary” effect basis of the Card Factory Letting and what they say is the obvious apparent illogicality of the Card Factory Letting being given no weight. In my judgment, these are different ways of saying the same thing. There is no ground in my view for an appeal on a point of law, there was no case law issue to raise with the parties and there is no difference between attaching no weight or no significant weight to the Card Factory letting. For the reasons which I have referred to above, there is nothing in the witness statement of the Arbitrator that provides any further reason for a challenge on the Arbitrator. In the end, I conclude that the Claimants’ issue is because they take issue with the weighing of evidence by the Arbitrator and the conclusions which he came to in applying comparables. That was the very thing which the parties had left to the Arbitrator, and there is no ground to challenge that exercise.


104. I therefore conclude that there is no basis to give permission to the Claimants to appeal on a point of law and that for all of the above reasons the Section 69 challenge fails.


               XV The other bases of application            


               A. Section 57            


105. There is no serious contention that the circumstances under Section 57 have arisen. The Claimants at highest said that it was not a primary argument, and the Arbitrator agreed with the primary argument of the Claimants that it had no application. I agree that it does not arise. In Al Hadha Trading Co v Tradigrain SA [2002] 1 Lloyds Rep 512, HH Judge Havelock-Allen QC said that this provision does not “entitle a tribunal to reconsider its conclusion about the submissions of a party, especially where those submissions have been safely received and accurately recorded in the award…” and he also approved the commentary in Mustill & Boyd which stated “Neither of these powers is intended to enable the arbitrator to change his mind on any matter which has been decided by the award, and attempts to use the section for this purpose should be firmly resisted”. This was approved, most recently, by Hamblen J. in Ases Havacilik Servis v Delkor UK Ltd [2013] 1 Lloyd’s Rep 254.


               B. Section 70(4)            


106. The third of the applications was under Section 70(4) of the 1996 Act in the event that the Award did not contain the tribunal’s reasons or it did not set out the tribunal’s reasons in sufficient detail to enable the court properly to consider the application or appeal. In that event, the court may order the tribunal to state the reasons for its award in sufficient detail for that purpose.


107. This seems to me to have no application in the circumstances of this case. It is to be used sparingly and only where the Court is otherwise unable to consider the applications/appeal under section 68 or 69 without further reasons: see Navios International Inc v Sangamon Transportation Group [2012] 1 Lloyd’s Rep 493, at paragraphs. 24 to 28. Now that it is accepted that the use of the phrase “case law” in paragraph 9.5 is a reference to the Handbook, there is no need for clarification of any other matters. The Award seen against the background of the valuer’s reports gives the reader sufficient information as to the conclusions reached on the principal important controversial issues and the reasons for the same. There is no need for more to be provided. If I had reached a contrary view, I should then have had to consider whether further information was required notwithstanding the witness statement of the Arbitrator of 1 June 2012 which I have subjected to scrutiny above. In the event, this hypothesis does not arise for consideration.


               C Sections 24 and 33            


108. It follows from all of the conclusions above about the case generally and particularly about the alleged irregularities (where section 33 has arisen as the basis of the section 68(2)(a) challenge) that I have found no breach of duty of the Arbitrator under section 33 of the 1996 Act. Without limiting the scope of those findings, I have rejected the instances where it was contended that the Arbitrator ought to have raised matters with the Claimants. I have found nothing which gives rise to doubts as to the impartiality of the Arbitrator in or about the Award. It was submitted that the witness statement might indicate that the Arbitrator had not made a fair and balanced determination in the Award, it follows from my rejection of the particular matters of criticism concerning the witness statement that I do not accept that submission. For all of the reasons I have given, it follows that I have found no basis for setting aside the Award or for remitting the Award. If there were grounds for setting aside and/or remitting the Award, it would have been necessary to rule on the submission that a remission to the Arbitrator would be inappropriate on the basis of perceived pre-determination of the case arising out of the Arbitrator’s witness statement, and that the Arbitrator should be removed under section 24 of the 1996 Act. Since remission does not arise, this issue does not arise for consideration.


               XVI Substantial injustice            


109. In my consideration above of section 68, I said that I would revert to the question as to whether there has been a substantial injustice. A similar issue exists under section 69 in that the Court has to consider whether the determination of the point of law substantially affects the rights of one or more of the parties. In view of my findings above, neither point under section 68 or 69 arises for consideration. However, I should say something about this subject. If it were the case that I should have found that there had not been a fair hearing or process such that the Arbitrator could not be trusted in this matter, then I should have been bound to find that a substantial injustice. For the reasons set out above, I reject the submission about the specific respects in which it is contended that there has not been a fair process, and indeed I have found no evidence of an unfair process. Similarly, if I had found that in fact the Arbitrator failed to comply with his duties by failing to provide an adequately reasoned Award, then I should have found without more that there had been a substantial injustice. However, for the reasons set out above, I have found that the reasoning of the Arbitrator did comply with his duties.


110. However, if it were simply a finding that the Arbitrator had erred as regards the approach to the evidence in a way that should have resulted in an increase in the rent review, then I should consider whether a failure to consider a rental increase of the kind in this case amounted to a substantial injustice for the purpose of section 68 or substantially affected the rights of the parties for the purpose of section 69. I should then have had to rule whether the sums involved were not sufficiently substantial for the tests of substantial injustice or substantially affecting the rights of the parties had been satisfied. I should exclude from any consideration in this regard the matters raised in paragraph 18 of the statement because these matters do not form a part of the Award and might not have been sufficiently ventilated thus far. Accordingly, the matter at this stage could be examined on the basis that a discount did not arise.


111. The Claimants’ case is that there might have been a difference in round figures of up to about £4,000 per annum for 5 years, and thereafter, this might affect the next rent review in the event that rentals remained static or did not increase much so that the rental was less than in round terms £44,000 per annum. It might also affect the award of costs in the arbitration. In the event, it is not necessary for me to make a determination as to the question of substantial injustice or whether the rights of the parties would be substantially affected. It is not necessary for me to express a view as to whether the sums involved are sufficiently substantial to satisfy the relevant test.


               XVII Conclusion            


112. It follows from the above that the applications of the Claimants are rejected. The challenges to the Award under section 68 of the 1996 Act on the grounds of serious irregularity fail. So does the application for leave to appeal under section 69 of the 1996 Act. For all of the reasons given above, the various applications made to the Court are dismissed. In the end, this is a case where the Arbitrator has properly carried out his duties and has done that which was required in terms of weighing the evidence. He has done that which was required of him, and there is no basis for the Court to interfere with the Award or to take any step which may lead to that result.

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