Halcrow Group Ltd v Blackpool Borough Council & Anor

Challenges under Arbitration Act 1996 section 68 are concerned with serious procedural irregularity and substantial injustice, not with re-evaluating evidence or correcting alleged factual or substantive errors. The threshold is high. A tribunal deals with an issue if it addresses it, even inadequately, and need not answer every argument or evidential step. A party that participates without promptly objecting may lose the right to complain under section 73. On a section 69 appeal, the court accepts the tribunal’s factual findings and interferes with mixed questions of fact and law only where the correct legal test could not have produced the decision reached.

Halcrow designed a culvert extension for Blackpool Borough Council. Following damage to the culvert roof, promenade and a security gate, the Council commenced arbitration. The arbitrator found that the principal cause was defective design and awarded sums for remedial works and the gate claim.

Halcrow challenged the award under sections 68 and 69 of the Arbitration Act 1996, alleging procedural unfairness, failure to deal with issues, misuse of the arbitrator’s expertise, errors concerning causation and burden of proof, and an intervening act affecting the gate claim. The central questions were whether the alleged matters constituted serious irregularity causing substantial injustice or an appealable error of law.

The applications under sections 68 and 69 of the Arbitration Act 1996 were dismissed. Costs followed the event.

1. Section 68. The applicant had to establish a serious irregularity falling within the relied-on statutory categories and substantial injustice. The provision is a high-threshold, due-process safeguard. It is not a route for challenging the correctness of the tribunal’s factual evaluation or conclusions.
2. The arbitrator had dealt with the causation case. The evidence included an expert report addressing the causes of the damage, and the arbitrator was entitled to prefer it. Complaints that he misunderstood evidence, failed to investigate matters, or gave insufficient weight to particular evidence were attacks on the evaluation of evidence.
3. The arbitrator’s procedural rulings permitted him to take the initiative, use his expertise and question experts, provided the parties had a fair opportunity to respond. His questions about the adequacy of the roof slabs followed evidence already given and were within the issues raised by the pleadings and expert evidence. Halcrow had an opportunity to ask further questions and did not protest or seek an adjournment.
4. Halcrow could not complain about the exclusion of Mr Symes’s opinion evidence. It had not objected when the evidence was excluded at the hearing, and its closing submissions treated admissibility as a matter for the arbitrator. Alternatively, section 73 precluded the complaint. Exclusion of the supplemental statement could not have caused substantial injustice because the same structural opinion evidence would inevitably have been excluded or disregarded.
5. Under section 68(2)(d), an issue is distinct from an argument, point, line of reasoning or evidential step. If the tribunal deals with the issue, the statutory ground is not engaged, even if the treatment is brief, erroneous or unsatisfactory. The arbitrator dealt with causation, composite action, the alleged intervening acts and the essential case concerning the damage claimed.
6. Section 69. The court was required to accept the arbitrator’s factual findings. It could interfere with a conclusion of mixed fact and law only if the correct legal test must have been misapplied because no reasonable arbitrator could have reached the result. The arbitrator’s treatment of causation, burden of proof and the alleged novus actus interveniens did not meet that demanding standard.

First-instance applications to the High Court challenging an arbitral award. The judgment records no earlier court decision in the same dispute.