J v K

Where a contract provides that an expert determination is final and binding but also states that any determination still in dispute is subject to further arbitration, the latter provision permits the arbitral tribunal to determine the disputed matters afresh. It is not confined to review for fraud, excess of instructions, contractual misinterpretation or manifest error, and does not necessarily require remission to the expert. “Final and binding” wording does not exclude supervisory or arbitral oversight where the contract provides for it elsewhere. A tribunal’s interpretation of its own earlier award does not ordinarily concern substantive jurisdiction merely because a party disputes that interpretation.

The Builder applied under sections 67 and 68 of the Arbitration Act 1996 in relation to a sixth arbitration award concerning an expert determination under a yacht construction agreement.

The expert had determined the method and cost of rectifying defects concerning the yacht’s lightship weight and draught. The expert had made a calculation error and declined to revisit the determination. The arbitral tribunal held that it had jurisdiction to hear the Purchaser’s application but that it could not remit the matter to the expert; it would instead rehear the disputed issues. The central questions were whether the tribunal had jurisdiction to intervene and, if so, whether its jurisdiction was limited to review or extended to a full rehearing.

1. The applications under sections 67 and 68 of the Arbitration Act 1996 were dismissed.

2. The reference in clause 22.2.1(b) to “any other matters specifically mentioned in this Agreement in this regard” extended the Independent Expert’s remit to every matter for which the agreement specifically provided for reference to that expert. This included determinations under clause 9.3 concerning the method and cost of rectifying defects.

3. The clause 9.3 provision that the expert’s determination was “final and binding” did not exclude further arbitration. Clause 22.2.1(b), particularly its opening words “For the avoidance of doubt”, made clear that a determination still in dispute was subject to further arbitration notwithstanding apparently inconsistent contractual wording.

4. The words “any determination” and “still in dispute” indicated a broad reference of the underlying disputed matters, rather than a confined challenge arising only from the expert’s determination. The further arbitration was to be conducted under clause 22.2.1(c), which contemplated that the tribunal would settle the disputes. It therefore permitted a full rehearing of the matters remaining in dispute, rather than merely a limited review or remission to the expert.

5. The tribunal’s interpretation of its fourth award did not exceed its substantive jurisdiction. The fourth award had found that the yacht could not attain its design draught at level trim without limiting that finding to the departure condition. The tribunal’s interpretation was cogent and persuasive, and did not cause substantial injustice to the Builder.

First-instance decision. No prior appellate history is stated in the judgment.