Norwich Union v Whealing Horton & Toms Ltd

Under Arbitration Act 1996, section 66, an arbitration award may be summarily enforced where the tribunal had substantive jurisdiction and no sufficient ground for refusing enforcement or staying execution is shown. Section 66 does not itself permit recovery of costs which were not the subject of an award and were not incidental to enforcing one. The court may, however, exercise its costs discretion in enforcement proceedings to allow reasonable costs directly and necessarily incurred in responding to applications affecting the award’s enforceability. Costs incurred before the enforcement application was issued, or which do not relate to enforcement, are not recoverable under that discretion.

Norwich Union sought enforcement of three costs awards made in arbitrations concerning professional indemnity insurance disputes with Whealing Horton & Toms Ltd. Two awards had been made by Mr Hayes. The third was made by Mr Justice Akenhead sitting as a judge-arbitrator under section 93(1) of the Arbitration Act 1996.

The defendant did not attend the enforcement hearing. The court considered the enforceability of the awards under section 66, the effect of an uncompleted challenge under section 68, and claims for further costs incurred in connection with later arbitral applications and the enforcement proceedings.

1. The court granted summary enforcement of Mr Hayes’s two costs awards and the judge-arbitrator’s award of £75,000. No basis had been shown for contending that the tribunals lacked substantive jurisdiction, or for refusing enforcement or staying execution under section 66 of the Arbitration Act 1996.

2. A challenge to an award or to the conduct of a judge-arbitrator under section 68 had to be brought in the Court of Appeal. The defendant had not pursued such a challenge there. The judge-arbitrator was the appropriate judge to deal with enforcement of the award made in that capacity, and there was no reason not to hear the application.

3. Costs incurred after Mr Hayes’s final award were not enforceable under section 66 because they were not the subject of an award and were not incidental to enforcing his awards. The claim for £2,707.20 was therefore refused.

4. Section 57(3), which permits correction of an award or an additional award, did not expressly or impliedly confer jurisdiction on an arbitrator to make a further award of the parties’ costs of a correction application. An additional award could appropriately address costs incidental to that additional award, but no such award had been made here.

5. The court could nevertheless allow reasonable costs directly incidental to the enforcement application in its discretion. Costs incurred before the application was issued were excluded. £12,000 plus VAT was allowed for costs incurred after issue in addressing applications which might have affected the award to be enforced. Interest was awarded at 6 per cent on the specified sums, with different commencement dates reflecting when the liabilities arose.

6. Norwich Union was awarded its costs of the enforcement proceedings, assessed at £10,967.75, payable within 14 days.