Sinclair v Woods of Winchester Ltd.

A challenge to an arbitral award under section 68 of the Arbitration Act 1996 requires a serious irregularity causing substantial injustice and falling within the statutory closed list. Section 68 is not a route for correcting errors of fact or law, or for reviewing the tribunal’s reasoning in detail. A party must object forthwith, exhaust available arbitral remedies and comply with the statutory time limit. An arbitrator need decide only the claims and distinct defences necessary to resolve the dispute. Removal under section 24 is exceptional and requires serious misconduct and real, substantial injustice.

The claimants sought, under sections 24 and 68 of the Arbitration Act 1996, removal of the arbitrator and the setting aside of his award concerning defects in a swimming-pool construction contract. They alleged procedural failures, failure to conduct the arbitration properly, and failure to deal with issues concerning design responsibility, patent and latent defects, and individual Scott Schedule items.

The defendants argued that the section 68 application was out of time, that objections had been waived under section 73, and that available recourse to the arbitrator had not been exhausted. The issues were whether those procedural objections barred the applications and, in any event, whether the arbitrator’s conduct or award involved serious irregularity causing substantial injustice.

1. Outcome. The applications for removal under section 24 and relief under section 68 of the Arbitration Act 1996 were dismissed. The section 68 application was one day out of time under section 70(3), and the court declined to extend time under section 80(5). The claimants had also lost the right to object to most complaints by failing to object forthwith and had failed to exhaust available recourse to the arbitrator.
2. Section 68. A serious irregularity requires satisfaction of a high threshold, substantial injustice and an irregularity within the closed statutory list. Section 68 cannot be used indirectly to appeal an error of fact or law, or to conduct a detailed examination of the tribunal’s reasoning. Failure to deal with an issue means failure to decide a claim or distinct defence necessary to resolve the dispute, not failure to provide reasons which satisfy the court.
3. Application. The arbitrator acted in accordance with the parties’ agreed limitation of the hearing to three preliminary issues. He addressed the design issue, reached a sufficiently clear general conclusion on responsibility for construction defects, and was entitled to leave individual patent-or-latent questions unresolved where the evidence was insufficient. The agreement not to rely on the RBJA report could not become a ground of complaint against the arbitrator.
4. Removal. Removal is a most serious remedy requiring misconduct so serious that the arbitrator cannot be trusted to complete the arbitration fairly and properly, together with real and substantial injustice. No such case was established.