Getting the court’s permission to appeal an arbitral award on a point of law under section 69 of the Arbitration Act 1996 (AA 1996) is not straightforward. An applicant must establish not only that the tribunal’s approach to a question of law was obviously wrong or, if the matter is one of general public importance, open to serious doubt (section 69(3)(c)), but also that the other threshold requirements imposed under section 69(3) are met.
Specifically, it must persuade the court that:
- The determination of the question of law will substantially affect the rights of one of the parties (section 69(3)(a)).
- The question was one the tribunal was asked to determine (section 69(3)(b)).
- It is just and proper for the court to determine the question (section 69(3)(d)).
The issue that arose in Agile Holdings Corporation v Essar Shipping Ltd was whether, if permission to appeal was granted, it was open to the respondent to defend the appeal by reference to the same threshold requirements or whether the decision to grant leave was determinative of those issues.
Background
The underlying arbitration concerned a dispute between Agile Holdings Corp, the owners of the vessel “Maria”, and Essar Shipping Ltd, her time charterers. During discharge of a cargo, fire damage was discovered and a claim was brought against Agile by the owners of the cargo. Agile commenced arbitration against Essar, seeking an indemnity in respect of the cargo claim under the Inter-Club Agreement.
The tribunal (Mr Alan Oakley, Mr Michael Baker-Harber and Mr Robert Thomas QC) held that the cause of the cargo claim was the manner in which the cargo had been handled and liability fell to be apportioned under clause 8(b) of the Inter-Club Agreement. However, it refused to declare Essar 100% liable because, although the words “and responsibility” had not been added to clause 8, a “similar amendment” had been made in the charter.
Agile sought leave to appeal that decision on the basis that the tribunal had reached the wrong conclusion as to what was meant by the term “a similar amendment” in the Inter-Club Agreement. Essar resisted that application on the grounds, amongst others, that this argument had not been advanced by Agile in the arbitration.
Having reviewed the written closings in the arbitration and transcripts of the oral closings, Popplewell J concluded that the question of law had been put to the tribunal and granted leave to appeal.
At the hearing of the appeal, Essar sought to re-argue the point. It submitted that the court did not have jurisdiction to entertain an appeal because, on a proper analysis, the threshold requirements of section 69(3) were not met.
The appeal
That argument was rejected. HHJ Waksman QC held that, once leave had been granted, the question of whether the court has jurisdiction to determine the appeal had been determined. In reaching that conclusion, he rejected the approach taken by the Singaporean Court of Appeal to similar provisions in the Singapore Arbitration Act 2002 in Motor Image v SCDA Architects.
The effect of this finding is that it is not open to a party to meet an appeal under section 69 by re-arguing points which relate exclusively to the threshold requirements for permission.
However, the judge held that this does not prevent any of the issues raised at the permission stage being re-litigated at the substantive appeal. Following the decision of Gross J (as he was) in The Ocean Crown, he noted that section 69 only permitted appeals on questions of law “arising” from an award (section 69(1)), and he accepted that the question of whether an issue was put to a tribunal was connected to the question of whether it arose from an award. He therefore held that that question could, in principle, be considered as part of the substantive appeal.
Having held that he was not prohibited from reconsidering whether the question of law raised in the appeal was one that the tribunal had been asked to determine, he emphasised that the court should give “considerable weight” to the decision of the judge granting leave to appeal.
Adopting that approach, the judge reviewed the material advanced by Essar and held that he was in no doubt that the question of law was one that the tribunal had been asked to determine.
Conclusions
The decision of the judge is helpful in three respects.
First, it clarifies that the decision of the judge granting permission to appeal is final and determinative of that issue. It is not open to a party to meet an appeal by arguing that the threshold requirements for leave to appeal were not met.
Second, it confirms that when determining whether the question of law arises from the award, the court hearing the appeal is not bound by the decision to grant leave and, as part of that process, can reconsider whether the question was one that the tribunal was asked to determine.
Third, it provides clear guidance as to the weight that should be given to the decision of the judge granting leave to appeal. If the judge granting leave considered the issue and had the same material before him or her, “very considerable weight” should be given to the original decision.
