Cordoba Holdings Ltd v Ballymore Properties Ltd

Challenges to an arbitral award under sections 68 and 69 of the Arbitration Act 1996 are subject to strict statutory limits. A tenant seeking to disregard an improvement must establish its nature, authorship, timing and cost. A court will not determine a point of law under section 69 where the point did not arise from the award, was unsupported by relevant findings of fact, or could not substantially affect the parties’ rights. Likewise, section 68(2)(d) requires an issue to have been put to the tribunal and any irregularity to have caused, or risked causing, substantial injustice.

The claimant held three leases from the defendant and challenged rent-review awards made by an arbitrator. The claimant argued that external works enhancing the building’s power supply were tenant’s improvements which had to be disregarded under Schedule 2 to the leases.

The claimant sought permission to appeal on a question of law under section 69 of the Arbitration Act 1996, an extension of time, and relief under section 68(2)(d) for alleged failure by the arbitrator to deal with the issue. The central question was whether the arbitrator had found that relevant external works existed and had decided the resulting legal issue.

1. Claims dismissed. The claims issued on 27 April and 26 August 2010 were dismissed. No order was made on Ballymore’s application issued on 8 April 2011, subject to further submissions.
2. The tenant had to establish that the improvements relied on were carried out by it. That required evidence of the nature of the improvement, who carried it out, when it was carried out and its cost. The claimant had not provided sufficient evidence of external works enhancing the power supply.
3. The arbitrator’s awards, read in context, determined factual issues about the available power supply, substations and the allocation of power between premises. They did not find that Cordoba had carried out relevant external improvements, nor did they decide whether paragraph 1.4.3 of Schedule 2 applied to such works.
4. Permission under section 69 was unavailable. The proposed question did not arise out of the awards, was not based on relevant findings of fact, could not substantially affect the parties’ rights, and was not just and proper for the court to determine.
5. Section 68(2)(d) was also unavailable. The alleged issue had not been put to the arbitrator with sufficient evidence or in accordance with the procedural directions. Without a relevant factual finding, the legal issue was hypothetical. In any event, any technical failure could not cause substantial injustice.
6. The court emphasised the restricted opportunities for judicial intervention in disputes committed to arbitration, consistent with Checkpoint Ltd v Strathclyde Pension Fund [2002] 2 EGLR 97.

First-instance applications in the High Court (Chancery Division). The judgment records an earlier paper application before Mann J, who directed renewal with an application for an extension of time under section 80(5) of the Arbitration Act 1996. This court dismissed the substantive claims.