Home of Homes Ltd v London Borough of Hammersmith & Fulham & Anor

Challenges under section 68 of the Arbitration Act 1996 are exceptional. The court does not exercise a general supervisory jurisdiction over arbitration or substitute its own view of procedural management. The applicant must establish a qualifying serious irregularity which has caused, or will cause, substantial injustice. The statutory threshold is directed to conduct far removed from what could reasonably be expected of the arbitral process. The same restrained approach applies to an application to remove an arbitrator under section 24(1)(d). An arbitrator may manage costs, seek legal assistance, defer a jurisdictional decision until relevant evidence is heard, and invite clarification or submissions on provisional views, provided the process remains fair. Strong disagreement with procedural decisions is insufficient.

Home of Homes Ltd was claimant in an arbitration concerning a building contract with the London Borough of Hammersmith & Fulham. It applied under section 68 of the Arbitration Act 1996 to challenge the arbitrator’s second partial award on jurisdiction and under section 24(1)(d) to remove the arbitrator.

The complaints concerned costs capping, jurisdictional directions, the first and second partial awards, delay in addressing a section 57 application, and a request for clarification issued after the substantive evidential hearing. The central issues were whether the arbitrator had committed serious irregularity causing substantial injustice and whether his conduct justified removal.

1. Both applications dismissed. The section 68 challenge and the section 24 application were not made out.
2. Section 68 is a long-stop remedy. It is engaged only where a qualifying irregularity has caused or will cause substantial injustice and the conduct is so far removed from what could reasonably be expected of the arbitral process that court intervention is justified. The court has no general supervisory jurisdiction over arbitration.
3. The arbitrator’s handling of costs was not irregular. His proposal to limit recoverable costs was commendable in principle. His reconsideration of the limit, subsequent reinstatement at a higher figure, and obtaining and adopting legal advice were fair and defensible responses to the parties’ submissions.
4. The arbitrator was entitled to address the jurisdictional challenge to the A3 Schedule before the substantive hearing. Powers to value or manage matters within the reference did not enlarge the jurisdiction conferred by the reference. Matters properly characterised as contractual valuation claims under clause 3.7 were outside the reference, although evidence concerning the final account could be relevant to loss and expense or delay claims under clause 4.11.
5. The first and second partial awards were sufficiently clear and reasoned. The arbitrator was entitled to decide some jurisdictional issues finally, while deferring others until oral evidence established whether the claims were valuation claims or loss and expense claims. His request for clarification contained provisional views and invitations to make submissions. It did not establish prejudgment or procedural unfairness.
6. The section 57 application did not justify criticism of the arbitrator because the parties had agreed that it could be addressed in the final award and the second award did not require the alleged clarifications. The complaints were substantially exaggerated and did not demonstrate either serious irregularity or a failure properly to conduct the proceedings causing substantial injustice.

First instance decision. The judgment records no prior appellate decision.