Sumner & Anor v Costa Ltd & Anor

The court has jurisdiction to direct an arbitrator to give oral evidence about the reasons for an award, despite the policy of limited court intervention in arbitration. That jurisdiction should be exercised sparingly. Cross-examination is inappropriate where the arbitration was deliberately conducted on paper, the arbitrator’s written reasons and subsequent evidence enable the court to determine the applications, and further questioning would undermine the intended swift and economical resolution of the dispute. Allegations of partiality or dishonesty do not, without more, justify cross-examination. A party may seek adverse inferences, but procedural fairness requires that the arbitrator have an opportunity to answer them.

The claimants, landlords of commercial premises, challenged a rent-review award made by the second defendant, an arbitrator. They sought relief under the Arbitration Act 1996, including remission for serious irregularity, permission to appeal on a question of law, clarification of the award, and removal of the arbitrator. The central application was for permission to cross-examine the arbitrator about his reasons, including his treatment of post-review-date comparable evidence and matters later identified in a witness statement.

1. Jurisdiction. The court had jurisdiction to direct an arbitrator to state reasons orally under cross-examination. Sections 1(c) and 70(4) of the Arbitration Act 1996 discouraged intervention and provided mechanisms for obtaining adequate reasons, but did not impose an absolute bar on such an order.
2. Exercise of jurisdiction. The application was refused. The parties had selected a written, expert arbitration conducted by surveyors rather than lawyers. The dispute concerned the factual valuation of market rent, and the arbitrator had produced a written award. The court could determine the pending applications by comparing the award, the arbitrator’s correspondence and his witness statement. Further questioning would not assist that process and would conflict with the principles of a swift and comparatively inexpensive arbitral determination.
3. The arbitrator’s imprecise reference to “case law” did not justify cross-examination. The court could assess whether the award disclosed serious irregularity or an error of law from the written materials.
4. Allegations of partiality or dishonesty were serious, but did not themselves justify cross-examination. Nor could the court pre-emptively prevent the claimants from seeking adverse inferences. Natural justice required that the arbitrator have an opportunity to answer any such assertion.
5. The application for cross-examination was unnecessary and inappropriate in the circumstances.