Earthmoving v Miller Construction Ltd

Where a court is asked to set aside or remit an arbitral award for misconduct, the arbitrator should be given notice of the ground on which misconduct may be found and an opportunity to assist the court. The question whether an arbitrator should be removed or the matter remitted is objective: whether a reasonable person would no longer have confidence in the arbitrator’s ability to reach a fair and balanced conclusion if the matter were remitted. Prejudice to the respondent to the application may be relevant, but is unlikely to matter where that party makes no complaint and accepts the arbitrator’s decision on the issue concerned.

James Moore Earthmoving appealed from an order of His Honour Judge Seymour QC in the Technology and Construction Court. The judge had set aside an interim arbitral award of £739,693.65 and removed the arbitrator for misconduct. The appeal was compromised on terms that it be allowed. The Court of Appeal nevertheless addressed the procedural fairness of the misconduct finding, the evidential basis for it, and the approach to removal or remission. The court noted that the appeal had been heard without full argument and stated conclusions on the material available before compromise.

1. Disposition. The appeal was compromised on the basis that it would be allowed on agreed terms.
2. Notice to the arbitrator. It was inappropriate to make a finding of misconduct without first giving the arbitrator notice of the ground on which the finding might be based. The arbitrator should be served with the application or otherwise given an opportunity to take part, provide evidence or remain inactive. A new ground, including an allegation that another party may have been prejudiced, required notice.
3. Evidential basis. On the material before the court, the evidence did not support misconduct on the basis found by the judge or on the fourth ground originally advanced. Nothing in the case reflected adversely on the arbitrator.
4. Removal or remission. The relevant objective question, identified by Mance LJ in Lovell Partnerships Northern Limited v A W Construction PLC (1996) 81 BLR 83, 99, was whether a reasonable person would no longer have confidence in the arbitrator’s ability to reach a fair and balanced conclusion if the matter were remitted. Prejudice to the respondent to the application might be relevant, but was difficult to envisage where that respondent made no complaint and accepted the arbitrator’s decision on the matters concerned. The court considered that this was not such a case.
5. These observations were stated without a final conclusion after full argument because the appeal had been compromised.

• Court of Appeal (Civil Division): [2001] EWCA Civ 654. Appeal from the Technology and Construction Court; compromised on the basis that it would be allowed on agreed terms.
• High Court of Justice, Queen’s Bench Division, Technology and Construction Court: His Honour Judge Seymour QC set aside the interim arbitral award, removed the arbitrator for misconduct, and allowed the appeal against the award.