Sterling v Rand & Anor

Under the Arbitration Act 1996, the court may enforce an unchallenged domestic award, but section 66 confers a judicial discretion rather than an automatic or administrative rubber stamp. Enforcement may be refused where the order would be contrary to the interests of justice, public policy, third-party rights, arbitrability or practical workability.

A choice of religious procedural law may displace a non-mandatory statutory provision governing arbitral remedies. Accordingly, where the parties chose Jewish procedural law and Jewish law empowered the Beth Din to order transfer of land, section 48(5)(b) did not prevent the order. Nevertheless, enforcement of a property-transfer award was refused because new evidence suggested material inconsistencies about the contracting parties and possible improper housing-benefit claims.

The claimant sought summary enforcement under section 66 of the Arbitration Act 1996 of an award made by the London Beth Din concerning the transfer of a property. The parties had agreed to binding arbitration under the Act, with the Beth Din’s procedure governed by Jewish law.

The Beth Din found that the claimant was entitled to have the property transferred to him or his nominee after discharge of the mortgage. The defendants resisted enforcement, raising issues concerning the tribunal’s remedial powers, waiver, workability, arbitrability, third-party interests and new evidence about the transaction and housing-benefit payments. The central questions were whether the Beth Din had power to order specific performance relating to land and whether enforcement would be just and appropriate.

1. The application for enforcement was refused, although it was not dismissed. The claimant remained entitled to restore the application after the relevant concerns had been addressed.

2. The objection based on section 48(5)(b) was raised too late. By participating in the arbitration without objection, the defendants had lost the right to rely on the tribunal’s alleged excess of power under section 73. The wider wording of section 73 covered an objection that the tribunal had exceeded its powers.

3. Alternatively, the Beth Din had power to order transfer of the property. Section 48(5)(b) was non-mandatory. The parties had chosen London as the seat but had expressly agreed that Jewish law governed the procedure and that other laws could be applied where Jewish law required. Under section 4(5), that choice could displace a non-mandatory provision. Jewish law gave the Beth Din power to order specific performance relating to land, so section 48 did not apply to that remedy.

4. The court also indicated that, even if the Beth Din lacked that power, section 66 could confer jurisdiction on the court to give effect to the award, although the court could only enforce the award and could not ordinarily order something materially different.

5. An unchallenged award is ordinarily binding and enforceable. However, section 66 requires a judicial determination. The discretion is particularly important where the award involves declaratory or mandatory relief, land ownership, public policy, arbitrability, practicality, workability or the rights of non-parties.

6. The dispute was arbitrable and the award was not unworkable on its face. The award could be implemented by requiring the defendants to cooperate in discharging the mortgage and by suitable wording addressing existing interests on the title.

7. Enforcement was nevertheless contrary to the interests of justice. New evidence materially conflicted with the case presented to the Beth Din about whether the claimant or Mr Stern was the true contracting party and owner. It also suggested that housing benefit may have been claimed on an incomplete or false basis. An order transferring the property could prejudice Hackney LBC, raise public-policy concerns and damage the integrity of the Beth Din process.

8. The parties could ask the Beth Din to reopen the matter on the basis of new evidence or agree to remit it. The court was not satisfied that it had power under the Act to order remission.

First-instance decision. The judgment records earlier Commercial Court proceedings, struck out by order dated 3 May 2018, with directions that any further enforcement proceedings be issued in the Chancery Division.