The Historic Buildings of Monuments Commission for England v Isambard Estates Ltd

Permission to appeal from an arbitration award under section 69 of the Arbitration Act 1996 requires the proposed question to satisfy the statutory conditions. A party cannot rely on issue estoppel or abuse of process as a separate ground where the point was not raised before the arbitrator and was neither considered nor determined in the award. On a pure construction challenge, the court must ask whether the arbitrator was obviously wrong, not whether the court would have reached the same conclusion. Where the contractual wording admits substantial arguments both ways, that threshold is not met.

The claimant applied for permission to appeal under section 69 of the Arbitration Act 1996 against a rent-review arbitration award. The dispute concerned the construction of a lease provision requiring a specialist archive building to be valued at the same rate per square foot as two office buildings.

An earlier rent review had adopted a different approach and allowed an allowance for the archive building’s onerous characteristics. The claimant argued that the earlier award created an issue estoppel, or that re-argument was an abuse of process, and alternatively that the second arbitrator was obviously wrong in construing the rent-review clause literally.

1. Issue estoppel and abuse of process. The proposed issue-estoppel point could not found an appeal. It had not been raised before the second arbitrator, although there had been ample opportunity to raise it, and the arbitrator had not been asked to determine it. It was a separate legal question requiring consideration of what the first arbitrator had decided, whether special circumstances prevented an estoppel, and, under Henderson v Henderson [1843] 3 Hare 100, whether re-argument would constitute an abuse of process. The point therefore was neither a question of law arising out of the award nor a question which the tribunal had been asked to determine (paras [12]-[16]).
2. Statutory threshold. The construction question was not one of general public importance. The relevant question under section 69(3) was whether the arbitrator was obviously wrong, not whether the judge would have adopted the same construction (para [17]).
3. Construction of the rent-review clause. The presumption that a rent-review clause ordinarily values premises as they stand may be displaced by sufficiently clear wording or surrounding circumstances. Authorities including Guys N Dolls Ltd v Sade Brothers [1984] 1 EGLR 103 and Buffalo Enterprises Inc v Golden Wonder Ltd [1991] 1 EGLR 141 recognised circumstances in which a term intended to increase rent may be excluded from the hypothetical letting. There were substantial arguments for and against the arbitrator’s literal construction, so it could not be characterised as obviously wrong (paras [18]-[21]).
4. Permission to appeal was refused.