Jolyon Thomas Roy Limbrick v Thomas Stephen Roy Limbrick

A court of coordinate jurisdiction may revoke or vary an earlier order under CPR rule 3.1(7), but that jurisdiction is not an appeal jurisdiction. For an interim order, reconsideration ordinarily requires a material misstatement of fact or a material change of circumstances.

Where a stay has been granted under section 9 of the Arbitration Act 1996, an applicant seeking to lift it bears the burden of showing that section 9(4) is satisfied. Mere evidence that the parties may have agreed to abandon an arbitration is insufficient. The court must be satisfied that they expressly or impliedly agreed to terminate the reference. Impecuniosity alone does not render an arbitration agreement incapable of performance.

The defendant applied to set aside an order made on the papers by Master Brightwell. That order had lifted an earlier stay of the claimant’s High Court proceedings, permitted amendments and transferred the litigation from London to Bristol.

The stay had been imposed by Deputy Master Hansen under section 9 of the Arbitration Act 1996, because disputes between the parties were subject to an arbitration clause. The claimant contended that subsequent correspondence, the resignation of the proposed arbitrator and the defendant’s financial difficulties amounted to an implied abandonment of the arbitration. The central issues were the proper approach under CPR rule 3.1(7), the burden of proof, and whether section 9(4) made the arbitration agreement inoperative or incapable of performance.

1. The application was granted. The stay was re-imposed. The order’s other provisions, including the transfer to Bristol and permission to amend the pleadings, remained undisturbed.

2. Under CPR rule 3.1(7), the power to make an order includes power to revoke or vary it. The jurisdiction is not an appeal jurisdiction. Consistently with Tibbles v SIG plc [2012] 1 WLR 2591 and Allsop v Banner Jones [2021] EWCA Civ 7, a final order will ordinarily be revisited only in exceptional circumstances, such as fraud. For an interim order, the usual grounds are a material misstatement of fact or a material change of circumstances.

3. The court approached the application by returning to the original application to lift the stay. The claimant bore the burden of showing that the jurisdiction to vary or revoke the order was satisfied. The relevant question was the obverse of the stay application: would the court now grant a stay under section 9(4)?

4. On the facts, the claimant had to establish that events after the original stay rendered the arbitration agreement inoperative, including by showing that the parties had expressly or impliedly agreed to rescind or abandon the arbitration reference. An arguable agreement was insufficient. The correspondence did not establish any concluded agreement.

5. The court distinguished Hashwani v Jivraj [2015] EWHC 998 (Comm) because that case involved ten years of inactivity and communications agreeing that nothing further remained to be done. The present facts showed only reluctance to proceed with the proposed arbitrator at his proposed rates.

6. The court accepted the principle in Paczy v Haendler Natermann [1981] FSR 250 that an arbitration agreement is incapable of performance only where it could no longer be performed even if both parties were ready, able and willing. Impecuniosity did not satisfy that test.

7. The court accepted that a reference may be terminated without terminating the underlying arbitration agreement, as explained in Trunk Flooring v HSBC [2015] NICA 68. No agreement to terminate even the reference had been proved.

The judgment concerned a first-instance application to set aside an order made on the papers by Master Brightwell. The court re-imposed the earlier stay under section 9 of the Arbitration Act 1996, while leaving the transfer and pleading orders in place.