Mitchell & Anor v Morris

Where proceedings concern a matter within an arbitration agreement, the court must stay them under Arbitration Act 1996, section 9, unless the agreement is shown to be null and void, inoperative or incapable of being performed. An asserted dispute is sufficient; the court need not determine whether a genuine dispute exists.

The court’s supportive powers under section 44 are restricted. In a non-urgent case, an application requires the tribunal’s permission or the written agreement of the other parties. The court should not short-circuit arbitration where the arbitrator can grant effective relief.

The claimants, landlords, brought proceedings against the defendant tenant under an agricultural lease. They sought access to carry out alleged repairing works. The lease contained an arbitration clause covering disputes under or connected with the lease.

The defendant disputed the landlord’s right to enter and did not admit the alleged disrepair. The claimants relied on Hammond v Allen [1992] 65 P. & C.R. 18, arguing that the absence of a counter-notice meant there was no longer a dispute. They also sought an injunction under section 44 of the Arbitration Act 1996.

1. The application for a stay was granted. The disputes fell within the lease’s arbitration clause and the defendant had acknowledged service without taking a substantive step in the proceedings.

2. Section 9 required a stay where there was an assertion of a dispute within the arbitration agreement. The court rejected the submission that a genuine or real dispute had first to be established. The majority decision in Halki Shipping Corporation v Sopex Oils Limited [1998] 1 WLR 726 supported that construction.

3. Hammond v Allen was distinguishable. It concerned the Arbitration Act 1950, under which a domestic arbitration did not produce the same compulsory stay. The time limit for a counter-notice under the model clauses did not apply because the notices had been served under the express repairing covenants in the lease, not under the deemed clauses incorporated by section 7 of the Agricultural Holdings Act 1986.

4. The request for an injunction under section 44 was refused. The case was not urgent. The delay since the first notice, the absence of a prompt court application and the evidence did not establish urgency. In a non-urgent case, section 44(4) required the tribunal’s permission or the written agreement of the other parties, neither of which existed.

5. Section 44(5) reinforced the court’s limited role: it could act only where the tribunal had no power or was unable for the time being to act effectively. The arbitrator would have ample powers under section 48, with enforcement available under section 66. The court therefore declined to remove the dispute from the arbitral process.