Majorboom Ltd v National House Building Council

An application under section 69 of the Arbitration Act 1996 must identify a clear question of law arising from the arbitrator’s accepted findings of fact. It cannot be used to reopen factual findings or recast a fact-sensitive dispute as a question of law.

Where an issue involves mixed law and fact, there is no error of law if the arbitrator’s conclusion falls within the permissible range of solutions. Twin directorships do not automatically impose a duty to disclose information between companies, but additional factual findings may justify actual, deemed or imputed knowledge. The application for permission to appeal was refused.

Majorboom Ltd applied for permission to appeal under section 69 of the Arbitration Act 1996 against an award concerning defects at a development. The arbitrator had found that notices of defects or damage received by Stonebridge House Management Company Ltd or its managing agents could be attributed to Majorboom through the overlapping directorships of Mr Barry Angel.

The proposed questions concerned actual, constructive, deemed or imputed knowledge, duties arising from Mr Angel’s concurrent directorships, confidentiality, and the effect of a notice sent after his resignation from the management company. The central issue was whether these were genuine questions of law on the arbitrator’s findings, and whether the arbitrator had been obviously wrong.

1. Permission refused. The proposed questions principally challenged the arbitrator’s detailed findings about the notices, Mr Angel’s knowledge and the relationships between the companies. They were not clear, crisp questions of law within section 69 of the Arbitration Act 1996.
2. Section 69 permits an appeal on a question of law based on the arbitrator’s findings of fact. A mixed question of law and fact may qualify, but there is no error of law where the arbitrator’s conclusion falls within the permissible range of solutions: The Matthew [1992] Lloyds Rep 323 and Foleys Limited v City and East London Family and Community Services [1997] ADRLJ 401. Findings of fact cannot be revisited on a section 69 application, as explained in London Underground Limited v Citylink Telecommunications Limited [2007] EWHC 1749 (TCC).
3. The arbitrator had made findings of actual knowledge and had been entitled to reach his conclusions on deemed knowledge. A director’s office alone does not fix that person with constructive knowledge of every document sent to or retained by a company, following Re Wincham (1878) Ch. Vol. IX 329. Nor do concurrent directorships alone impose a duty to disclose information acquired in one capacity to the other company. El Ajou v Dollar Land Holdings [1994] 2 All ER 685 was authority only for that proposition without additional circumstances.
4. Here, however, the arbitrator had found additional facts concerning Mr Angel’s duties, involvement and knowledge. Those findings entitled him to impute the relevant knowledge to Majorboom. The conclusion concerning a notice issued after Mr Angel’s resignation was also one the arbitrator was reasonably entitled to reach on his broader findings about the company’s knowledge of the defects.
5. The general approach of upholding arbitral awards, identified in Zermalt Holdings SA v Nu-Life [1985] 2 EGLR 14, reinforced the conclusion. Permission to appeal was refused.

This was a first-instance application for permission to appeal from an arbitral award under section 69 of the Arbitration Act 1996. The application was refused.