G Middleton Ltd v Berry Creek Overseas Development Ltd

Enforcement of an arbitral award under Arbitration Act 1996 section 66 is discretionary, but a detailed re-analysis of the arbitrator’s reasoning is inappropriate where jurisdiction and appeal are not in issue. A stay of execution under RSC Order 47.1 requires special circumstances making enforcement inexpedient. A separate cross-claim will not ordinarily justify a stay where it concerns a different contract and transaction, is unsupported by cogent evidence, was brought belatedly, or creates uncertainty about the claimant’s ability to recover. Evidence that the claimant may be unable to repay is insufficient where its financial position is unchanged or its difficulties result from the defendant’s failure to pay the award.

The claimant obtained two arbitration awards totalling £448,668.47 arising from building works at Blue Orchard. The defendant did not pay and discontinued its application for permission to appeal. It then sought a stay of enforcement of £216,015.94, relying on an alleged overpayment said to arise from work at a separate property.

The court considered whether the alleged overpayment created a serious issue to be tried and whether special circumstances made enforcement inexpedient under RSC Order 47.1.

1. Enforcement under section 66 of the Arbitration Act 1996 is discretionary. No jurisdictional or common-law ground for refusing enforcement arose. The court should not reconstruct a detailed arbitrator’s award where jurisdiction and appeal are not in issue.

2. The alleged overpayment was unsupported, contradicted the arbitrator’s findings and based on figures not forming part of the awards. The claim was also issued only shortly before the hearing. It therefore did not establish a serious issue to be tried.

3. Hillcourt v Teliasonera AB [2006] EWHC 508 (Ch) and Schofield v The Church Army [1986] WLR1 328 were distinguishable because the present dispute concerned different work under a separate contract.

4. Applying Wimbledon Construction Co v Derek Vago [2005] BLR 374, the claimant’s financial position did not justify a stay. There was no cogent evidence that it could not repay, and any financial difficulty was attributable to the defendant’s non-payment.

5. The stay application was dismissed. The awards were enforced in full for £448,668.47. The discontinued permission-to-appeal claim stood dismissed with costs.

First-instance decision. The defendant’s permission-to-appeal application was discontinued and dismissed with costs.