Eric Wright Group Ltd v Council of the City of Manchester

A challenge to an arbitral award under section 68 of the Arbitration Act 1996 requires more than an arguable procedural imperfection. The applicant must show an irregularity within the statutory categories, unfairness, and substantial injustice. In a challenge based on failure to allow evidence, the question is whether the process as a whole denied a reasonable opportunity to present the case and whether the evidence might realistically have produced a materially more favourable result.

An arbitrator has substantial procedural and evidential autonomy. A construction issue may be decided on the material available where the parties had a fair opportunity to present their cases. Section 69 permission will not be granted where the proposed question is procedural, the decision is not obviously wrong, or intervention would undermine the parties’ agreement to arbitrate.

The claimant landlord and defendant tenant were parties to a long lease containing rent review provisions. A preliminary rent review award adopted the tenant’s construction of the phrase “Best Rental Value” and treated the characteristics of the premises as relevant to identifying comparable prime office accommodation.

The claimant challenged the award under sections 68 and 69 of the Arbitration Act 1996. It argued that the arbitrator had acted unfairly by refusing late evidence about the factual and commercial background to the lease, including evidence intended to show that the premises could not be “prime office accommodation”. It also argued that the arbitrator had determined a question of construction without first determining the relevant facts.

1. Section 68 challenge dismissed. The statutory scheme is a longstop remedy requiring deference to the parties’ choice to arbitrate. The claimant had to establish an irregularity under section 68, a failure to comply with the arbitrator’s duty of fairness under section 33, and substantial injustice.
2. The duty to give a reasonable opportunity to present a case can, where appropriate, extend to evidence as well as submissions. An arbitrator may, however, determine the case on a basis not expressly adopted by either party provided the parties have notice and a proper opportunity to respond. Here, the claimant had two opportunities to address the legal assessor’s implied-term reasoning and did so.
3. The proposed factual and expert evidence concerned the claimant’s existing construction case. The issue whether “prime office accommodation” was qualified by reference to premises “like” the property had been central from the outset. The later implied-term reasoning did not create a new evidential issue.
4. The arbitrator was entitled under sections 33 and 34 to control the time, manner and form of evidence and submissions. Refusing a late attempt to change an agreed submissions-led process was fair, proportionate and consistent with avoiding delay and expense. The application was characterised as opportunistic rather than demonstrating substantial injustice.
5. Substantial injustice required a realistic possibility that, had appropriate procedures been followed, the arbitrator might have reached a conclusion favourable to the claimant. The court did not need to retry the construction issue, and the claimant had not shown that the proposed evidence would have affected the outcome.
6. Section 69 permission refused. The proposed question was procedural rather than a question of law. In any event, the statutory criteria were not met: the issue was not shown substantially to affect the parties’ rights, the decision was not obviously wrong, it was not a matter of general public importance, and it was not just and proper for the court to intervene.

The claimant’s challenges to the award were dismissed.