Punch Taverns Ltd & Anor v Swan Hospitality Ltd

Permission to appeal an arbitration award under section 69 of the Arbitration Act 1996 requires the court to be satisfied that the proposed point is obviously wrong, or raises a question of general public importance and the decision is at least open to serious doubt. In assessing a statutory trigger event, reasonably foreseeable must be distinguished from what was actually foreseen and from what it would be fair to treat a party as able to foresee. A development already in existence before a tenancy was granted cannot itself be a relevant change occurring for the purposes of the applicable condition. Interim relief may be made subject to a condition preserving a later opportunity to compensate loss caused by the relief.

Punch Taverns Limited and Punch Partnerships (PML) Limited sought permission to appeal an award made by the Pubs Code Adjudicator in statutory arbitration proceedings against Swan Hospitality Limited. The arbitrator had found that the opening of a competing public house was a trigger event under the Small Business, Enterprise and Employment Act 2015 and the Pubs Code Regulations 2016. The arbitrator also held that the opening of the relevant business park was a qualifying local-area change.

The application concerned whether the proposed questions satisfied the statutory test for permission to appeal and whether the existing stay of enforcement should carry an immediate obligation to pay Swan’s costs and losses.

1. Permission to appeal was granted under section 69 of the Arbitration Act 1996. The statutory test was satisfied because the question of reasonable foreseeability under the Pubs Code was of general public importance and the arbitrator’s approach was open to serious question. It potentially conflated reasonable foreseeability with actual foreseeing and with what it would be fair to treat Swan as able to foresee.

2. The court was also satisfied that the arbitrator was obviously wrong in treating the opening of the Adanac Park business development, which preceded the grant of Swan’s lease, as a relevant change for the purposes of condition D in regulation 7 of the Pubs Code Regulations 2016.

3. The application for an immediate order that Punch pay Swan’s costs and losses arising from the stay was refused. Where interim relief may ultimately prove unjustified, the usual protection is a cross-undertaking or equivalent mechanism addressing loss after the relevant contingencies have occurred, rather than a premature determination of liability.

4. Permission was therefore granted subject to a condition that, if the stay caused Swan loss and the court later decided that compensation was appropriate, Punch would comply with any resulting order.

The Pubs Code Adjudicator made an award dated 16 February 2018 in statutory arbitration proceedings. The High Court granted Punch permission to appeal the award under section 69 of the Arbitration Act 1996, subject to a condition concerning compensation for loss caused by the stay of enforcement.