R v K

Challenges to family arbitration awards are subject to the statutory framework in the Arbitration Act 1996. Permission to appeal on a question of law is available only where the award is obviously wrong, or raises a question of general public importance and is seriously doubtful. The court must not use an appeal or serious-irregularity application to reopen factual findings or substitute its own discretionary assessment. The court retains an overriding discretion under the Matrimonial Causes Act 1973, but will ordinarily give effect to an award unless something has gone so seriously wrong that the defect is plain and extreme. That discretion is not a route to a rehearing. A party seeking correction should generally use the limited power under section 57 of the 1996 Act, but need not do so where the complaints fall outside that provision.

The applicant challenged an arbitration award concerning financial arrangements following divorce. The parties had agreed at short notice to arbitrate under the IFLA Scheme after a court hearing was adjourned. The award provided for a substantial lump-sum payment, periodical payments, pension sharing and payment of the arbitrator’s fees by the applicant.

The applicant sought permission to appeal under section 69 of the Arbitration Act 1996, set aside the award for serious irregularity under section 68, and asked the court not to approve an order reflecting the award under section 25 of the Matrimonial Causes Act 1973. The central issues were the applicable thresholds, the extent of the court’s supervisory discretion, and whether the arbitrator had acted unfairly or failed to give adequate reasons.

1. Permission to appeal. Permission under section 69 of the Arbitration Act 1996 was refused. The statutory test was not displaced by the more general appeal test in FPR Part 30. In a discretionary financial remedy decision, the question was whether the arbitrator had misdirected himself in law or reached a decision which no reasonable arbitrator could reach. The award had to be read fairly and as a whole. The arbitrator had identified the relevant principles under section 25 of the Matrimonial Causes Act 1973, and the criticisms largely sought to reopen factual findings and invite a fresh discretionary assessment.
2. The award was not obviously wrong. It was a needs case involving limited assets and a marked disparity in income. The arbitrator was not required to set out every statutory factor separately, produce a balance sheet, calculate a percentage division, or explain every evidential inference. His treatment of earning capacity, housing needs, non-matrimonial property and pension sharing fell within the reasonable range.
3. Serious irregularity. The section 68 application was dismissed. Section 68 concerns due process, not whether the tribunal reached the correct result. Even if, exceptionally, overlooking important evidence could engage the provision, no such exceptional failure was shown. The arbitrator had considered the material evidence. He was not required to invite further submissions before adopting the joint expert’s evidence on the pension percentage, because the evidence had been fully available to both parties and the applicant was not taken by surprise.
4. The arbitrator should have given reasons for departing from the usual equal sharing of fees under the Scheme. That omission was capable of falling within section 68(2)(d), but the amount involved was insufficient to constitute a serious irregularity causing substantial injustice. A request for clarification circulated on a draft award was not a vehicle for reopening the decision. A further request after the final award is generally safer where a correction within section 57 remains sought.
5. Approval of the award. The court retained its overriding discretion under section 25, but that discretion had to respect the arbitration agreement, the award and the statutory safeguards in the 1996 Act. It was not equivalent to the treatment of a settlement or pre-nuptial agreement. Intervention would be appropriate only in rare and extreme circumstances where the defect effectively leapt off the page. The award was fair and within the range of right outcomes. The court therefore approved an order giving effect to it.
6. The applications under sections 68 and 69 were dismissed, permission to appeal was declined, and the respondent was entitled to an order reflecting the award.

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