Environment Agency v High Speed Two (HS2) Limited

Section 44(3) of the Arbitration Act 1996 permits urgent orders only where the order sought concerns a matter within section 44(2) and is necessary to preserve evidence or assets. Urgency must be assessed in the context of the particular order sought. The court’s role is limited and it must avoid determining substantive disputes reserved for arbitration. The concept of an asset may be interpreted broadly, including statutory interests connected with an arbitral regime, but the applicant must still establish necessity. Where proposed works are subject to effective controls and the evidence does not show that the works themselves are likely to affect the protected interests, an injunction is not necessary merely because later, more extensive works may require consent.

The Environment Agency applied under section 44(3) of the Arbitration Act 1996 for an interim injunction preventing High Speed Two (HS2) Limited and its contractor from carrying out earthworks at two railway cuttings. The works formed part of a proposed two-stage excavation, comprising a dry dig followed by a wet dig.

The Environment Agency contended that the dry and wet works could not be disaggregated and that the works required approval under Schedule 33 to the High Speed Rail (London - West Midlands) Act 2017. HS2 maintained that the dry dig could proceed separately under controls designed to avoid groundwater. The central issue was whether the court had jurisdiction under section 44(3), including whether the application was urgent and whether the injunction was necessary to preserve assets.

1. Application dismissed. The Environment Agency failed to surmount the jurisdictional threshold in section 44(3) of the Arbitration Act 1996.
2. Following Cetelem SA v Roust Holdings Ltd [2005] 1 WLR 3555, the court’s role in support of arbitration is limited. Section 44(3) permits an order concerning a matter listed in section 44(2) only where the court considers it necessary for preserving evidence or assets. The possibility that an order may incidentally involve a preliminary determination does not remove jurisdiction, but the court must avoid usurping the arbitral process.
3. Urgency is assessed by reference to the order sought. The commencement of works could make the application urgent in a general sense, but that did not establish that an injunction was urgently necessary to preserve assets.
4. The court was inclined to construe “assets” broadly. In the circumstances, the relevant asset could potentially comprise the Environment Agency’s statutory interests under the Water Environment (Water Framework Directive) (England and Wales) Regulations 2017 and Schedule 33 to the High Speed Rail (London - West Midlands) Act 2017. It was unnecessary to decide that issue finally.
5. The evidence concerned the dry dig currently proposed, rather than the ultimate wet works. The controls required trial pits, exclusion of wet areas, cessation of excavation if groundwater was encountered, monitoring and inspection. The evidence did not establish that the dry dig itself was likely to cause deterioration, affect groundwater, or affect the conservation, distribution or use of water resources. The fact that the eventual works might require consent did not make the injunction necessary.
6. It was therefore unnecessary to consider the serious-issue and balance-of-convenience arguments, which remained matters for the arbitrator. Costs were provisionally to follow the event.