Sealand Housing Corporation v Siemens AG

Under the Arbitration Act 1996, permission to appeal under sections 67, 68 or 69 may be granted only by the judge below. Where that judge refuses permission, the Court of Appeal cannot review the merits or grant permission itself. A narrow residual jurisdiction remains to set aside an apparent decision that was, in truth, no decision because the process was vitiated by bias or comparable unfairness. That jurisdiction does not convert an ordinary complaint about the correctness or adequacy of reasons into an appeal. A full judgment addressing the issues, with adequate reasons for refusing permission, engages the statutory bar. The policy of respecting arbitration and the finality of awards reinforces that limited approach.

Sealand challenged an ICC arbitration award under sections 67 and 68 of the Arbitration Act 1996. The Commercial Court found a procedural irregularity but no serious irregularity or substantial injustice, dismissed the challenges, upheld the award, ordered indemnity costs and refused permission to appeal.

Sealand renewed its application to the Court of Appeal. It accepted that the merits could not be reopened but argued that a residual jurisdiction, recognised in North Range Shipping Ltd v Seatrans Shipping Corporation [2002] EWCA Civ 405, enabled the court to intervene for procedural unfairness or inadequate reasons. The central issue was whether that residual jurisdiction could bypass the statutory requirement for permission from the court below.

Disposition

The application was refused unanimously. The Court of Appeal held that it had no jurisdiction to grant permission to appeal.

1. Statutory scheme. Rix LJ applied the reasoning in Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd [2001] 1 QB 308, as applied in Athletic Union of Constantinople v The National Basketball Association [2002] EWCA Civ 830. Leave to appeal under sections 67, 68 and 69 of the Arbitration Act 1996 could be granted only by the judge below. If leave was refused, the Court of Appeal could not grant permission on the merits. The Vice-Chancellor confirmed that such a refusal was not itself a reviewable decision under section 16 of the Supreme Court Act 1981.
2. Residual jurisdiction. The narrow jurisdiction recognised in North Range Shipping permits intervention where an apparent decision was, in truth, no decision at all because the decision-making process was vitiated by bias, chance, whimsy, personal interest or comparable unfairness. The principle protects the integrity of the process and does not permit a direct challenge to the correctness of the decision.
3. Application. This case fell outside that exception. The Commercial Court judge had conducted a full hearing, dealt with the evidence and submissions in a detailed judgment, reached his conclusion by an intellectual process and gave adequate reasons for refusing permission. Sealand's first three complaints challenged the merits of the underlying decision. Its complaint about inadequate reasons was also unfounded. There was no allegation of bias or comparable misconduct, and the case was not one in which the challenge had been left unconsidered.
4. Finality. The result reflected the parties' autonomous choice of arbitration and the statutory policy of finality, subject only to the limited review mechanisms in the Arbitration Act 1996. The formal order was: application refused.

1. Court of Appeal (Civil Division): Refused Sealand's renewed application for permission to appeal, holding that the statutory bar could not be bypassed through the residual jurisdiction for a purported non-decision.
2. Commercial Court: HH Judge Michael Dean QC dismissed Sealand's challenges under sections 67 and 68 of the Arbitration Act 1996, upheld the arbitral award, ordered indemnity costs and refused permission to appeal.