Nobiskrug GmbH v Valla Yachts Ltd

On an appeal under section 69 of the Arbitration Act 1996, a purchaser’s reservation of rights does not, by itself, establish a restitutionary entitlement to recover payments made to suppliers. The decisive question is whether the tribunal’s findings establish a legal basis for recovery, including liability of the builder, breach of project-management obligations, causation, or unjust enrichment. An award should be remitted where the tribunal has made material findings supporting possible restitutionary or damages claims but has not completed the necessary analysis. The appeal may therefore succeed because the premise of the certified question is mistaken, while the underlying issues remain open for determination by the tribunal.

Nobiskrug, the builder of a superyacht, appealed under section 69 of the Arbitration Act 1996 against a Fifth Partial Final Award dated 24 April 2018. The arbitration concerned Valla Yachts’ recovery of payments made to subcontractors, including Ismotec and other suppliers.

The tribunal held that purely voluntary payments were not recoverable unless Nobiskrug was obliged to make them under an Approved Contract. It nevertheless considered that payments made under a reservation of rights could be recovered, and found that Nobiskrug had breached project-management obligations. Nobiskrug challenged the tribunal’s approach on the question whether a reservation of rights alone entitled Valla Yachts to restitution. The central issue was whether that premise accurately represented the tribunal’s decision and whether the outstanding restitutionary and damages issues should be remitted.

1. Appeal allowed and issues remitted. The certified question proceeded on the false premise that the tribunal had decided that Valla Yachts could recover supplier payments solely because they were made under a reservation of rights. The tribunal’s statements at paragraphs 50(2) and 145 had to be read with its conclusion that purely voluntary payments were not recoverable unless Valla Yachts established that Nobiskrug was obliged to make them under an Approved Contract.
2. The tribunal had made material findings relevant to a possible liability of Nobiskrug. It found breaches of Nobiskrug’s project-management responsibilities, including failures to investigate supplier claims and to manage their resolution effectively. It also found that Ismotec’s threatened suspension of work placed Valla Yachts in an extremely difficult position.
3. The first Ismotec payment was made pursuant to an agreement that liability would be determined later, including in arbitration. The subsequent payments were made against the background of that agreement. Nobiskrug had not referred the dispute to the applicable dispute-resolution procedure. These findings did not, however, complete the legal analysis or establish that reservation of rights alone created a cause of action.
4. Valla Yachts’ alternative case was that its payments discharged or mitigated Nobiskrug’s project-management responsibilities and unjustly enriched Nobiskrug. That argument had considerable force, but the tribunal had not fully stated the analysis on the face of the Award. Nor had it found that Nobiskrug’s project-management failures caused the additional costs claimed. Its damages reasoning had expressly left causation for later consideration.
5. Under section 69(7) of the Arbitration Act 1996, remission was presumed over setting aside. The restitution and damages issues were therefore remitted to the tribunal for further consideration.

• Arbitral Tribunal: Fifth Partial Final Award issued on 24 April 2018. The tribunal determined various supplier-cost claims and counterclaims.
• High Court (Commercial Court): Permission was granted on one question of law. The appeal was allowed, and the restitution and damages issues were remitted to the Tribunal.