Rashid v Oil Companies International Marine Forum

A private disciplinary body exercising contractual or equivalent disciplinary powers must act fairly and within the scope of the allegations notified to the person concerned. A general assurance that the hearing will address specified matters may limit the matters on which adverse findings can fairly be based, unless an unexpected matter emerges and a fair opportunity to respond is given. The court’s role remains supervisory. It does not substitute its own assessment for that of the primary decision-maker, but it must set aside a decision reached through procedural unfairness, error of law or an impermissible exercise of discretion. A sanction may be unlawful where the process denied a fair opportunity to answer the matters relied upon.

The claimant was an accredited ship inspector under the defendant’s SIRE programme. Following an investigation into the timing and conduct of four inspections, a disciplinary committee recommended permanent withdrawal of his accreditation. The claimant contended that the defendant had breached an implied contract and the principles of natural justice by exceeding the agreed scope of the hearing, relying on matters for which he had inadequate notice, and imposing an unlawful sanction. The defendant denied liability and argued that its expert committee had acted within its discretion. The central issues were whether a contractual relationship existed, whether the disciplinary process was fair and lawful, and what remedies and losses followed.

An earlier application for an interim mandatory injunction had been dismissed by a Deputy High Court Judge.

1. Contract. The claimant and the defendant were parties to an implied contract. The defendant’s rules created a sufficiently certain framework of reciprocal rights and duties concerning accreditation, inspections, compliance with the rules and disciplinary procedures. The claimant’s submission to the rules and jurisdiction, together with the defendant’s agreement to operate the scheme and permit inspections, supplied consideration. The reasoning in Modahl v British Athletic Federation Limited [2001] 1 WLR 1192 applied.
2. Supervisory jurisdiction. The court’s function was supervisory, not to rehear the substantive allegations or select the sanction afresh. It had to examine procedural fairness, errors of law and whether the decision fell within the decision-maker’s lawful discretionary area. The approach endorsed in Bradley v The Jockey Club [2005] EWCA Civ 1056 applied.
3. Natural justice. The principle of audi alteram partem required reasonable notice of the matters under consideration and a fair opportunity to answer them. The requirements were flexible and fact-sensitive. Having confined the hearing to specified allegations, the defendant could not fairly base its decision on wider issues such as fatigue, back-to-back inspections, general report quality or alleged dishonesty without proper notice and an opportunity to prepare evidence. The guidance in Dymoke v Association for Dance Movement Psychotherapy UK Limited [2019] EWHC 94 (QB) and Re Lo-Line Electric Motors Ltd [1988] Ch 477 supported that conclusion.
4. The committee failed to determine the notified allegations in a properly reasoned way and relied on matters outside their agreed scope. The process was deeply flawed and wholly unfair. The withdrawal of accreditation was therefore unlawful and a breach of contract.
5. The claimant was entitled to a declaration and damages of £126,841, including proven expenses and assessed loss of income. The claim for loss of reputation failed. A mandatory injunction was refused, but the claimant was given liberty to apply if the defendant did not reinstate the accreditation.

• High Court (Queen’s Bench Division): the claim was upheld. The defendant’s withdrawal of accreditation was declared unlawful and in breach of contract. Damages of £126,841 were awarded, while a mandatory injunction was refused.
• Interim application: an earlier application for a mandatory injunction was dismissed by a Deputy High Court Judge.