Durham County Council, R (on the application of) v Darlington Borough Council

Permission to appeal an arbitration award under section 69 of the Arbitration Act 1996 requires satisfaction of each statutory condition. The question must substantially affect the parties’ rights and be one which the tribunal was asked to determine. The arbitral decision must either be obviously wrong on the award’s factual findings, or concern a question of general public importance and be at least open to serious doubt. The latter test is broader than the former strong prima facie case approach. The court may grant permission on some questions while refusing it on others. Questions concerning the construction of statutory provisions that remain capable of application may have general public importance, even where the relevant regulatory scheme has rarely been used.

Durham County Council applied for leave to appeal under section 69 of the Arbitration Act 1996 against two arbitration awards made under regulation 19 of the Local Government Changes for England (Property Transfer and Transitional Payments) Regulations 1995. The awards concerned the transfer of shareholdings and land following the creation of Darlington as a unitary authority, and the payment of interest on sums found payable.

The court considered whether the proposed questions substantially affected the parties’ rights, had been submitted to the arbitrators, were obviously wrong or raised questions of general public importance open to serious doubt, and whether it was just and proper to determine them despite the arbitration agreement.

1. Statutory conditions. The court held that the application identified the questions of law and the grounds relied upon, satisfying section 69(4). The questions substantially affected the parties’ rights and had been matters which the arbitrators were asked to determine.
2. General public importance. The questions concerned the construction of statutory regulations made under the Local Government Act 1992. The regulations remained in force and could apply to future structural changes. Their limited practical history did not prevent the questions from being of general public importance. The court applied the guidance in CMA CGM v Beteiligungs-Kommanditgesellschaft MS 'Northern Pioneer' Schiffahrtgesellschaft mbH & Co & Others [2002] EWCA Civ 1878, observing that “at least open to serious doubt” imposed a broader test than the former strong prima facie case requirement.
3. Questions refused. The arbitrator’s conclusions that the airport and waste-management company shareholdings were relevant shares and were held and required for the relevant functions were not open to serious doubt. The judge did not fully endorse all of the reasoning concerning relevant shares, but considered the conclusion sound.
4. Questions granted. Permission was granted concerning whether the Creebeck waste-disposal site was surplus land and whether interest was payable under regulation 18(1) for periods before the regulation 16 notice. Permission was also granted on the alternative question whether section 49(3) of the Arbitration Act 1996 could supply the basis for an interest award if the regulation was insufficient.
5. Further appeal and costs. Permission to appeal the judge’s decision to the Court of Appeal under section 69(8) was refused. Costs were ordered to be assessed in detail on the questions decided against Durham.

The judgment itself records an application for leave to appeal arbitration awards under section 69 of the Arbitration Act 1996. Leave was granted on the Creebeck and interest questions, but refused on the other proposed questions. Further leave to appeal to the Court of Appeal under section 69(8) was refused.