ENGLISH HIGH COURT REJECTS RENEWED ORAL APPLICATION FOR PERMISSION TO APPEAL AN ARBITRAL AWARD ON A POINT OF LAW

In Osler v Osler and Others, [2023] EWHC 1270 (Ch), the Chancery Division of the English High Court has ruled that the Court cannot allow a renewed oral application for permission to appeal an arbitral award under section 69 of the Arbitration Act 1996 (the "Act") where permission was refused on paper, even where the Judge's order (Order) purported to confer a right to apply to set aside or vary it.

This case is a reminder of the Court's robust stance to challenges of arbitral awards. In particular, where permission has been refused on the papers, an applicant will not be entitled to a hearing.

Background:

The underlying arbitration concerned a dispute that arose from a farming partnership. In an interim award issued by the tribunal (Award), the tribunal determined that market value, and not historic value, was the correct basis for valuing the partnership assets. The applicant (Applicant) sought permission to appeal the Award on the valuation issue under s 69 of the Act.

Pursuant to s 69(5) of the Act and paragraph 12.12 of the practice direction to CPR 62, applications to appeal arbitral awards are determined without a hearing unless "it appears to the court that a hearing is required". By an order dated 17 October 2022 (the Order), Joanna Smith J decided on the papers to refuse permission to appeal.  The second paragraph of the Order stated:

“This Order has been made by the court without a hearing pursuant to CPR PD 52B paragraph 7.1. Any party affected by the order may apply to have it set aside or varied within 7 days of the date of service upon that person.”

In reliance on this wording, the Applicant applied to set aside or vary the Order. The Respondent opposed this application on the grounds that the Court had no jurisdiction to proceed with an oral hearing given the determination on the papers.

Decision:

The Court dismissed the renewed oral hearing application by the Applicant on the grounds that where an application for permission under s 69 has been dealt with on paper, there is no right to a renewed oral hearing.

The key points from the judgment can be summarised as follows:

• Reference to CPR PD 52B: The Court noted that the reference to CPR PD 52B in the Order was clearly an error by the judge, as those rules do not apply to applications under the Act. As previously established by the Court in BLCT (13096) Limited v J Sainsbury Plc, [2003] EWCA Civ 884 (BLCT), appeals of arbitral awards are governed solely by s 69 of the Act and CPR Part 62.
• Inconsistent with established principles: The Court rejected the argument that the second paragraph of the Order allowed the Applicant to apply for an oral hearing, as to do so would be to defy the "crystal clear" and well-established principles from case law. The Court cited cases such as WSB v FOL, [2022] EWHC 586 (Comm) (see our blogpost on this case here), Midnight Marine v. Thomas Miller, [2018] EWHC 3431 (Comm) and BLCT, in each of which the Courts found that where an application for permission under s 69 has been dealt with on paper, there is no right to a renewed oral hearing.
• Nature of the Order: The Court firmly rejected the Applicant's submission that the Order was not a final determination of the application for permission to appeal. As held in BLCT, the provision in s 69(5) of the Act for an application to appeal to be determined on the papers would be defeated if such an order was to be treated as anything other than a final determination of that application.
• Exclusion of the second paragraph: The Applicant argued that the Court had to give some effect to the second paragraph of the Order, as it lacked the jurisdiction to alter it. The Court rejected this, stating that the position under section 69(5) of the Act is binary - either the application is determined on paper, or it is determined at a hearing. Hence, the idea that an order refusing permission on paper could also confer a right to an oral hearing would be contrary to the provision as a matter of construction and the principles derived from case law. The Court also confirmed that since the second paragraph was clearly included erroneously, it could be excluded using "the slip rule" or the court's case management powers under CPR 3.1(7). The Court also confirmed that, regardless of whether the paragraph was excluded or not, the Court would dismiss the application as it had no jurisdiction to entertain it pursuant to the ruling in WSB v FOL.

Key Takeaways:

The case is another useful reminder of the Court's approach to applications under s 69, driven by the policy of ensuring the expedient and cost-efficient resolution of challenges to arbitral awards.

This area of law is well-settled: a s 69 application to appeal an arbitral award can be decided on the papers alone. Should such an appeal be refused on the papers, this decision is final, and the applicant will not be entitled to a hearing (even if indications to the contrary are given in the court order!). It is clear on the authorities and on analysis of the Act that jurisdiction to set aside or vary such a decision does not exist.

For further information, please contact Craig Tevendale, Partner, Liz Kantor, Professional Support Lawyer, or your usual Herbert Smith Freehills contact.

The authors would like to thank Portia Cox for her assistance in drafting this post.