Mount Wellington Mine Ltd v Renewable Energy Co-Operative Ltd

This is a section 67 Arbitration Act 1996 challenge to an arbitrator's award on jurisdiction in a dispute arising from a roof/airspace lease. The court held that (i) conversion of the original tenant company into a registered society under the Co-operative and Community Benefit Societies Act 2014 did not operate to create a new, separate legal person for the purposes of the lease; the converted entity remained the same legal person in a different legal regime, so the society was treated as party to the lease; (ii) registration at HM Land Registry (Land Registration Act 2002, s 58) vested the lease in the society in any event; (iii) a Part 36 settlement of court proceedings for relief from forfeiture that was expressly limited to relief from forfeiture and costs did not extinguish or compromise the other issues then the subject of an arbitration; and (iv) the arbitrator had jurisdiction to determine the original matters referred to him but lacked jurisdiction to determine additional matters raised later that were outside the original reference.

Nature of the claim/application: An application under section 67 of the Arbitration Act 1996 challenging an arbitral award on jurisdiction. The claimant (MWML) sought declarations that the arbitrator lacked substantive jurisdiction; the defendant (REC Soc) sought to uphold the arbitrator's award that he had jurisdiction.

Background and procedural posture:

• MWML owned the freehold of an office building. A lease dated 2012 purportedly granted roof/airspace for photovoltaic panels to Renewable Energy Cooperative (a company, REC Co).
• The company later converted into a registered society (REC Soc) under the Co-operative and Community Benefit Societies Act 2014; REC Soc asserted it was the tenant under the lease.
• An arbitrator was appointed under a dispute resolution provision. REC Soc commenced arbitration; MWML challenged the arbitrator's jurisdiction on multiple grounds. Separately, REC Soc sought relief from forfeiture in the county court; those proceedings were later compromised by acceptance of a Part 36 offer limited to relief from forfeiture and costs.
• MWML brought this court claim under s 67 to challenge the arbitrator's award on jurisdiction.

Issues framed by the court:

• Whether conversion of the company into a registered society meant the society was a different legal person and therefore not a party to the lease.
• Effect of registration at HM Land Registry on ownership of the lease.
• Whether MWML was estopped from denying REC Soc's tenancy.
• Effect of admissions in the county court and the Part 36 settlement on the arbitrator's jurisdiction (res judicata / Henderson v Henderson / abuse of process).
• Whether the arbitrator's reference extended to additional matters raised after the original reference.

Court's reasoning (concise):

• On conversion: the court concluded that the legislative scheme contemplates a change of legal regime rather than creation of a wholly new person whose assets and liabilities are disconnected from the predecessor. The court relied on the structure and provisions of the 2014 Act (including ss 115 and 117) and on authority (Re London Housing Society's Trust Deeds [1940] Ch 777) to hold that assets, rights and liabilities continue to attach to the converted entity.
• On registration: in any event, registration under the Land Registration Act 2002 (s 58) vested the lease in the society; by privity of estate the society succeeded to tenant rights.
• On estoppel and admissions: the alleged representations were not sufficiently unequivocal to found equitable estoppel; admissions and the county court order granting unconditional relief from forfeiture were consistent with the lease subsisting as between the parties.
• On Part 36 / compromise: the Part 36 settlement was expressly limited to relief from forfeiture and costs; the court held that the compromise did not, on its terms and context, extinguish other disputes that were the subject of the arbitration.
• On scope: the arbitrator had jurisdiction to decide the matters actually referred to him in the original reference, but not the additional matters advanced later that fell outside the wording and scope of that reference.

Disposition and further directions: The court concluded the arbitrator has jurisdiction in respect of the original reference but not for the later matters; consequential matters to be dealt with on paper with a timetable for written submissions.

The claimant's section 67 challenge was allowed in part. The court rejected MWML's central challenges that conversion created a new legal person and that the Part 36 compromise extinguished the arbitrator's jurisdiction. The judge held that the converting company and the registered society are the same legal person in substance so the society is party to and owns the lease (and, in any event, registration would have vested the lease). The arbitrator therefore had jurisdiction over the original matters referred to him but did not have jurisdiction to determine subsequent issues that were not within the original reference. The judge directed written submissions on consequential matters.