Edmond Stern Settlement, Trustees of v Levy (t/a Simon Levy Associates)

Permission to appeal an arbitration award under Arbitration Act 1996, section 69, requires a genuine question of law satisfying the statutory conditions. A contractual fee and damages claim may crystallise when the contract is wrongfully terminated. Later events, including a final account prepared after termination, need not affect quantification where the contract and pleaded case make the entitlement determinable at termination.

A challenge for serious irregularity under section 68 requires both procedural unfairness and substantial injustice. Refusing an amendment or further evidence does not create such an irregularity where the proposed case is legally irrelevant, unpleaded and inconsistent with the parties’ earlier conduct.

The Trustees owned a property where substantial building works were undertaken. They engaged the defendant building surveyor under a contract providing for percentage fees and project administration services. After the defendant’s services were terminated, an arbitrator found that the termination was wrongful and addressed the defendant’s outstanding fees and damages.

The Trustees later sought to rely on the eventual builder’s final account, rather than the information available when the defendant’s contract ended. The arbitrator refused permission to amend the defence and refused further evidence. The Trustees applied under sections 69 and 68 of the Arbitration Act 1996. The issues were whether the arbitrator had decided a question of law, whether permission to appeal should be granted, and whether refusal of the amendment constituted serious irregularity causing substantial injustice.

1. Applications dismissed. The Trustees’ applications under sections 69 and 68 of the Arbitration Act 1996 were dismissed. Costs of £9,265 were summarily assessed and ordered to be paid within 14 days.
2. There was a question of law. The arbitrator’s refusal of further evidence and amendment was based on his legal conclusion that the later final account could not affect quantification of the defendant’s claims. The decision was therefore not merely procedural or discretionary.
3. Permission to appeal was refused. The arbitrator was not obviously wrong. The defendant’s right to payment for outstanding fees and his claim for damages for wrongful repudiation crystallised when the contract was terminated. It was supportable to assess the fee claim by reference to the contract, pleadings and evidence available at that date, rather than events involving other consultants over the following two years.
4. The question was not one of general or public importance. The contract was a one-off agreement containing specific wording. Whether a percentage fee is assessed by reference to the estimated contract value at termination or the eventual final account depends on the relevant contract and facts.
5. The section 68 challenge failed. A serious irregularity requires a failure to act fairly or to give a reasonable opportunity to present a case, together with substantial injustice. If the arbitrator’s legal conclusion was correct, evidence supporting an unpleaded and legally unavailable case was irrelevant. The Trustees also failed to establish any mutual expectation that the eventual final account would be used.

First-instance decision on applications challenging and seeking permission to appeal an arbitration award. No prior appellate decision is stated beyond the earlier unsuccessful challenge to Award No. 1.