Surefire Systems Ltd v Guardian ECL Ltd

Section 69 of the Arbitration Act 1996 provides a tightly limited route for challenging an arbitral award. An applicant must identify a question of law arising from the award, show that the tribunal was asked to determine it, and satisfy one of the demanding statutory tests. The court proceeds from the arbitrator’s findings of fact and does not rehear factual or technical disputes. Evidence on an application for leave is therefore generally confined to the award and material needed to establish the legal question or its public importance. Parties who did not raise a contractual issue before the arbitrator cannot ordinarily recast it as a question of law on appeal. The finality and party-autonomy principles underlying arbitration justify strict control of both the evidence and the court’s intervention.

Surefire sought leave under section 69 of the Arbitration Act 1996 to appeal against an arbitrator’s award of £102,986 to Guardian in a subcontract dispute concerning variations and delay-related loss and expense. It also sought an extension of time if required.

Surefire advanced grounds alleging failure to apply contractual requirements for day-work sheets, failure to account for evidence supporting valuation of variations, and failure to apply a subcontract payment provision. The court considered whether those grounds identified questions of law arising from the award and whether the statutory requirements for leave were met.

1. Extension of time. The arbitrator’s clarification of 2 May 2005 constituted an arbitral process of review for section 70(3) purposes. The application was therefore in time. The judge added obiter that, if an extension had been necessary, it would have been refused because there was no explanation for the delay and the proposed appeal was weak.
2. Day-work sheets. The first ground disclosed no arguable question of law. The contractual note had not been argued in the arbitration, and the arbitrator would, if necessary, have found compliance waived. The ground failed the requirements of section 69.
3. Burden of proof and evidence. The court accepted the principle in Rhesa Shipping Co SA v Edmunds [1985] 1 WLR 948 that a party bearing the burden of proof fails on a point unsupported by satisfactory evidence. That principle did not require leave here. The arbitrator identified evidence on each disputed variation, and the court would not review his assessment of the factual evidence.
4. Unargued contractual provision. The third ground concerned clause 10 of the subcontract conditions, but neither party had asked the arbitrator to determine its meaning or effect. It therefore was not a question of law arising out of the award, and the court had no admissible evidential basis for deciding it.
5. Disposition. All three proposed grounds failed the statutory requirements. Leave to appeal was refused and the proceedings were dismissed. The judgment emphasised that parties choosing arbitration cannot subsequently refer factual or technical disputes to the court for reconsideration.

First-instance application for leave to appeal against an arbitrator’s award under section 69 of the Arbitration Act 1996. The judgment states that the proceedings were dismissed.