BLCT (13096) Ltd. v J Sainsbury Plc

The Court of Appeal refused permission to appeal against the judge's decision to determine an application for leave to appeal an arbitral award on paper under section 69(5) of the Arbitration Act 1996. The court held that section 69(5) expressly permits determination without an oral hearing unless a hearing appears to be required and that Article 6(1) of the European Convention on Human Rights did not in the circumstances of this case require an oral hearing. The court recognised a residual jurisdiction to intervene in cases of unfairness (as explained in North Range Shipping Ltd v Seatrans Shipping Corporation) but found no real prospect that the judge's paper decision would have been altered by an oral hearing. The court therefore concluded there was no real prospect of success and refused permission to appeal.

Background and procedural history:

• An arbitrator determined market rent under a rent review clause in a lease; a key issue was whether a £3,000,000 premium paid in a comparable transaction should be 'rentalised' (decapitalised) and treated as part of rent.
• BLCT sought permission to appeal the arbitral award on a point of law under section 69 of the Arbitration Act 1996. The application proceeded by various interlocutory steps in the Commercial Court and Chancery Division; a Deputy Master initially granted permission, that order was set aside by Master Price and the matter referred to a judge under section 69(5), and Pumfrey J refused leave on paper. BLCT then sought an oral hearing and permission to appeal to this court.

Nature of the application: BLCT sought permission to appeal to the Court of Appeal against the arbitrator's award and, specifically, an oral hearing of its application for permission to appeal. The appellant also challenged the compatibility of section 69(6) of the Arbitration Act 1996 with Article 6(1) ECHR.

Issues framed:

• Whether section 69(5) permits reconsideration of a paper refusal at an oral hearing and whether CPR 52.3(4) requires such reconsideration.
• Whether Article 6(1) ECHR required an oral hearing in these circumstances.
• Whether section 69(6) is incompatible with Article 6(1) because of the absence of a right of appeal to the Court of Appeal from a refusal to grant leave.

Court's reasoning and conclusions:

• The court interpreted section 69(5) as permitting the court to "determine" the application on paper unless a hearing appears required; it did not allow a provisional paper decision to be reopened as of right for oral rehearing. CPR 52.3(4) is subject to statutory provisions and does not override section 69(5).
• Article 6(1) does not necessarily require an oral hearing in every instance. Because the parties had already had a full arbitration hearing before an independent tribunal and the application to the High Court raised questions of law rather than credibility or disputed factual determinations, Article 6(1) did not require an oral hearing here except in exceptional circumstances. The limited exceptional circumstances relied upon (comments by the Master and ambiguity in the Master’s order) would not have led to a different outcome and so did not give a real prospect of success on appeal.
• The court accepted the residual jurisdiction to intervene in cases of unfairness (as explained in North Range) but found no unfairness justifying intervention. The challenge to section 69(6) also had no real prospect of success because the residual jurisdiction provides a remedy in the rare case of procedural unfairness.

Subsidiary findings: The court emphasised the policy objectives of the Arbitration Act 1996 (expedition, finality and limited court intervention) and that oral argument, while often useful, must be balanced against delay and expense. The court refused permission to appeal for want of a real prospect of success.

Appeal dismissed. The Court of Appeal refused permission to appeal because section 69(5) of the Arbitration Act 1996 allows the High Court to determine an application for leave on paper unless a hearing appears required, Article 6(1) ECHR did not in these circumstances require an oral hearing, and there was no real prospect that an oral rehearing would have changed the judge's decision; a residual jurisdiction to remedy procedural unfairness exists but was not engaged on these facts.

Arbitral award dated 13 May 2002. BLCT applied for leave to appeal to the Commercial Court on 7 June 2002; matter transferred to the Chancery Division. Deputy Master Hoffman initially granted leave (19 June 2002); Master Price set that order aside on 7 August 2002 and referred the application to a judge under section 69(5) of the Arbitration Act 1996. Pumfrey J refused leave on paper (letter of 30 January/10 March 2003). BLCT applied for an oral rehearing and then sought permission to appeal to the Court of Appeal; this appeal was heard and refused on 30 June 2003 ([2003] EWCA Civ 884).