Sans Souci Limited v VRL Services Limited (Jamaica)

A judicial order is construed in one coherent, contextual exercise. The court’s reasons are always admissible because they authoritatively identify the circumstances regarded as relevant. Those reasons may interpret the order but cannot contradict its clear language.

Under section 11 of the Arbitration Act, remission permits arbitrators to correct an error or omission affecting an issue within the reference. It does not ordinarily reopen conclusively determined matters for which no ground of remission existed.

A party unheard on costs is entitled to be heard before a reasonable time elapses or the order is perfected. Thereafter, variation requires exceptional circumstances amounting to a miscarriage of justice. The absence of a reasonable earlier opportunity to be heard can satisfy that requirement.

An hotel proprietor repudiated a long-term management agreement. Arbitrators awarded the manager damages based principally on the present value of future management fees, without deciding whether expenses allegedly required to earn those fees should be deducted.

Harris J dismissed the proprietor’s application under section 11 of the Arbitration Act to set aside or remit the award. The Court of Appeal of Jamaica allowed an appeal only in respect of the expenses and remitted the issue of damages. When the proprietor subsequently sought to raise the hotel’s sale and later economic conditions, the arbitrators ruled that the remission was confined to the expenses issue. The Supreme Court and Court of Appeal upheld that ruling.

The proprietor appealed on the scope of the remission. The manager cross-appealed concerning its opportunity to contest the original costs order and the charges incurred in providing a guarantee. The central questions were how the remission order should be construed and when a perfected costs order may be reopened.

1. Appeal and cross-appeal dismissed. Lord Sumption, delivering the judgment of the Board, held that the arbitrators had correctly confined the remission to the unresolved question of unrecoverable expenses.

2. The construction of a judicial order is a single contextual exercise. The question is what its language would convey in the circumstances before the court and patent to the parties. The court’s reasons are always admissible because they provide an authoritative statement of the circumstances regarded as relevant. They may assist in interpreting an order but cannot contradict language whose meaning is inescapable. Gordon v Gonda [1955] 1 WLR 885 and Winston Gibson v Public Service Commission [2011] UKPC 24 were explained accordingly.

3. Section 11 of the Arbitration Act enables a tribunal, which would otherwise be functus officio, to reconsider matters within the reference that were unresolved or improperly resolved because of error, oversight, misunderstanding or misconduct. An arbitral award is prima facie conclusive, and judicial intervention is limited. Unless the order expressly remits the whole dispute, remission will ordinarily concern only the issue or issues warranting reconsideration. The approach in Glencore International A.G. v Beogradska Plovidba (The “AVALA”) [1996] 2 Lloyd's Rep. 311 was applied.

4. The Court of Appeal’s reasons showed that only the treatment of unrecoverable expenses justified remission. Its general reference to damages enabled the arbitrators to deduct any such expenses from undiscounted fees and recalculate the discounted award. It did not permit new challenges concerning the later sale of the hotel or subsequent economic conditions. Reopening findings for which no ground of remission existed would conflict with the statutory scheme.

5. A court must give a litigant a reasonable opportunity to be heard on costs. A costs order announced without submissions may be acceptable if it remains provisional and the parties can address the court within a reasonable time. Until a reasonable time has elapsed or the order has been perfected, an unheard party is entitled as of right to be heard.

6. After that point, the court retains inherent jurisdiction, but variation requires exceptional circumstances amounting to a miscarriage of justice. Applying Taylor v Lawrence [2002] EWCA Civ 10, [2003] QB 528, and endorsing the test in Re Uddin [2005] 1 WLR 2398, the Board held that an absence of any reasonable earlier opportunity to be heard can establish corruption of the process. Here, however, the Jamaican Court of Appeal was entitled to find that the manager had a reasonable opportunity to apply before perfection. The guarantee-costs point consequently did not arise. The parties were permitted 28 days for written submissions on the costs before the Board.

1. Privy Council: In [2012] UKPC 6, dismissed both the proprietor’s appeal concerning the scope of remission and the manager’s cross-appeal concerning costs.

2. Court of Appeal of Jamaica: In the later scope proceedings, upheld the rejection of the proprietor’s challenge to the arbitrators’ preliminary ruling. On 2 July 2009, it also refused the manager’s application to reopen the perfected costs order. In the original award proceedings, it had allowed the proprietor’s appeal only on unrecoverable expenses and remitted the issue of damages to the arbitrators.

3. Supreme Court of Jamaica: Rejected the proprietor’s challenge to the arbitrators’ ruling that the remission was confined to unrecoverable expenses. Earlier, Harris J had dismissed the proprietor’s original application to set aside or remit the award.