Sinclair v Woods of Winchester Ltd

Permission to appeal an arbitral award under Arbitration Act 1996, section 69, requires a genuine question of law, substantial effect on the parties’ rights, an obviously wrong decision or a question of general public importance involving serious doubt, and a just and proper intervention. Causation will usually be a mixed question of fact and law. An arbitrator’s conclusion within the permissible range does not found an appeal merely because another conclusion is arguable. A main contractor with no design obligation under the main contract does not acquire design liability simply because it enters into a sub-contract with a nominated specialist that performs design work. Such design responsibility must arise from the contractual allocation of risk, a direct warranty, or the architect’s continuing obligations.

The claimant applied for permission to appeal on two alleged questions of law arising from an arbitrator’s third award and subsequent clarification document. The arbitration concerned defects in a swimming-pool complex constructed by the defendant.

The first issue concerned flat-roof failures which the arbitrator attributed principally to defective architectural design, while treating the defendant’s breaches as accelerating the failures. The second concerned defective boiler and pipework design carried out by a nominated specialist sub-contractor. The central questions were whether either issue was a question of law within section 69 of the Arbitration Act 1996 and, if so, whether the arbitrator was obviously wrong.

1. Permission refused. The claimant’s application did not satisfy the requirements of section 69(3) of the Arbitration Act 1996. The court’s power to intervene in arbitration is limited, although the court should determine a genuine legal question correctly where the statutory requirements are met.
2. A proposed question must be capable of being expressed as a question of law. Findings concerning causation are ordinarily mixed questions of fact and law. Where the arbitrator’s conclusion falls within the permissible range, it does not disclose an appealable error of law. The arbitrator’s finding that the roof design was the sole operative cause of failure, with the defendant’s breaches merely compounding the speed of deterioration, was a mixed finding plainly open to him.
3. The arbitrator had not found concurrent causes. He had unequivocally identified the architect’s design as the operative cause. Since the defendant had already been found not to have design liability under the main contract, the conclusion that it was not liable for the principal roof-replacement costs was not obviously wrong.
4. A main contractor whose workscope excludes design does not acquire design liability merely because it is instructed to enter into a sub-contract with a nominated specialist that performs design work. The specialist’s design should be covered by a direct warranty to the employer or remain within the architect’s non-delegable obligations. The contractual terms determine any separate liability for workmanship by the nominated sub-contractor.
5. The arbitrator was therefore correct to reject liability for the nominated specialist’s boiler and pipework design. The application for permission to appeal was dismissed, and the claimant was ordered to pay the defendant’s costs, summarily assessed at £15,000 payable within 14 days.

The judgment records an earlier unsuccessful application concerning removal of the arbitrator and setting aside an earlier award, reported at [2005] EWHC 1631 (QB). That earlier decision was not the subject of the present application. The present court dismissed the application for permission to appeal from the arbitrator’s Award 3.