IN THE MATTER OF THE ARBITRATION ACT 1996

An application under CPR 3.3(5) to set aside an order dismissing an arbitration challenge without a hearing involves a rehearing. The applicant must show a real prospect of success or a good reason to proceed to an oral hearing.

There is no right to an oral rehearing of a refusal of permission to appeal under section 69 of the Arbitration Act 1996. A section 68 challenge requires both serious irregularity within the statutory categories and substantial injustice. A tribunal may decide a case on a point that was not formally pleaded if the issue was sufficiently in play for the parties to address it.

WSB applied under CPR 3.3(5) to set aside an order made by Moulder J DBE on paper under CPR 3.3(4) and CPR 23.8(c). That order dismissed WSB’s challenges to a JAMS arbitration award under sections 67 and 68 of the Arbitration Act 1996 and refused permission to appeal under section 69.

WSB sought an oral hearing of its section 67, section 68 and section 69 applications. It argued that the arbitrator had erred in construing contractual information and interference provisions, decided an issue without giving WSB a fair opportunity to address it, and lacked jurisdiction to decide forfeiture and costs issues.

1. Application dismissed. WSB had not shown a real prospect of success or a good reason to set aside Moulder J DBE’s order in relation to the section 67 or section 68 challenges.
2. Section 69 was different. Section 69(5) ordinarily required permission applications to be determined without a hearing. Once the application had been determined on paper, CPR 3.3(5) could not be used to obtain an oral rehearing. The proper recourse was an appeal, requiring leave under section 69(6).
3. The section 68 challenge could not be used to conduct a detailed inquiry into the arbitrator’s reasoning or to determine whether the arbitrator reached the correct conclusion. The applicant had to establish a serious irregularity falling within a closed statutory category and substantial injustice. A point was sufficiently in play where the evidence and arguments made it reasonably apparent that the tribunal might rely upon it. Formal pleading was not decisive.
4. The arbitrator had not erred in concluding that information sought under clauses 5.5 and 5.8 of the Securities Loan Agreement was not reasonably necessary to consummate the transaction after WSB had decided not to proceed because of due-diligence concerns.
5. Clause 5.9, properly construed in context, prohibited interference directed at invalidating, suspending, impeding, terminating or restricting the agreement. FOL’s communications with the custodian were found to enforce, rather than invalidate or restrict, the agreement.
6. Because there was no event of default, the cure-period and forfeiture issues were irrelevant. The arbitrator’s observations on forfeiture were obiter and did not substantially affect the parties’ rights.
7. The pre-dispute contractual provisions requiring FOL to bear arbitration costs were invalid under section 60. The applicable agreement under section 61 was found in the JAMS International Arbitration Rules, which empowered the tribunal to allocate costs.
8. WSB was ordered to pay FOL £50,000 in respect of the costs of the applications.

The judgment concerned an application to set aside an order made at first instance by Moulder J DBE. No appeal from that order was determined in the present judgment.