Essex County Council v Premier Recycling Ltd

Under Arbitration Act 1996, the words “final and binding” do not, by themselves, exclude an appeal on a question of law. The court must construe the parties’ agreement in context and identify a clear intention to exclude the statutory right of appeal. A reference to an expert, a speedy written procedure and the parties’ wish for finality may be highly relevant to the discretion under section 69(3)(d), even though they do not constitute an exclusion agreement. In a one-off commercial arbitration, those factors may make it unjust and improper for the court to determine the question. Permission may therefore be refused even where the statutory grounds concerning the legal question are otherwise established.

The Council sought permission under section 69 of the Arbitration Act 1996 to appeal an arbitrator’s award concerning the treatment of soil and hardcore when calculating waste minimisation bonus payments under a services contract. The parties had agreed to arbitration under clause 30.3, but the terms of reference stated that an expert third party was to provide a final and binding decision. The proposed procedure was rapid and based on written submissions. Premier argued that the terms excluded an appeal, or alternatively weighed against permission under section 69(3)(d). The central issues were whether the parties had excluded the statutory appeal and, if not, whether it was just and proper for the court to determine the question of law.

1. Exclusion of appeal. Section 69(1) of the Arbitration Act 1996 permits an appeal on a question of law unless the parties have otherwise agreed. Such an agreement requires clear wording, although it need not expressly refer to section 69. The phrase “final and binding”, considered in isolation, is insufficient. It may mean final and binding subject to the statutory rights of appeal and review preserved by section 58(2).
2. The relevant words had to be construed with the surrounding agreement and circumstances. The reference to an expert, the intended speed of the procedure and the written-only process did not convert the phrase into an exclusion agreement. The parties had therefore not excluded an appeal.
3. Section 69(3)(d). Those same features were matters of great weight in deciding whether it was just and proper for the court to determine the question. The arbitration concerned a one-off contractual dispute, past and future payments, and a narrow issue of construction. The parties had chosen a comparatively speedy and final process. A full appeal with oral submissions was inconsistent with that agreement. It was therefore not just and proper for the court to determine the question.
4. In any event, the arbitrator’s choice between the competing constructions was not obviously wrong. Permission to appeal was refused under sections 69(3)(c) and 69(3)(d).

Not an appeal from a lower court decision. The judgment determined an application for permission to appeal an arbitral award.