Michael Wilson & Partners Ltd v John Forster Emmott

Where an arbitration agreement incorporates the Arbitration Act 1996, the statutory procedure for transferring costs jurisdiction from the arbitral tribunal to the court remains applicable even if the tribunal later ceases to function.

The court’s jurisdiction under section 63(4) is not invoked automatically. A party must make an application to the court on notice. A Notice of Commencement, Request for Detailed Assessment or request for a Default Costs Certificate does not satisfy that requirement.

The claimant sought detailed assessment of arbitration costs in the Senior Courts Costs Office. The arbitration tribunal had originally retained jurisdiction over costs but later declined further involvement. The claimant argued that the tribunal’s loss of capacity meant that jurisdiction had automatically passed to the SCCO.

The defendant maintained that sections 63(3) and 63(4) of the Arbitration Act 1996 continued to govern the transfer of jurisdiction and that no compliant application on notice had been made.

1. The claimant’s costs had not been properly brought within the SCCO’s jurisdiction. The arbitration agreement incorporated the Arbitration Act 1996, including section 63.
2. Section 63(3) preserved the tribunal’s primary jurisdiction over recoverable arbitration costs. Section 63(4) provided the route by which the court could assume jurisdiction where the tribunal did not determine those costs. That statutory procedure did not cease to apply merely because the tribunal later became unwilling or unable to act.
3. The claimant had made no application to the SCCO, on notice to the defendant, seeking the court’s assumption and exercise of the tribunal’s jurisdiction. The Notice of Commencement dated 18 January 2019 was not such an application. Nor could the request for a Default Costs Certificate or the later Request for Detailed Assessment be construed as compliance with section 63(4), because neither was an on-notice application enabling the court to determine or direct the means of determining the recoverable costs.
4. The court respectfully agreed with Master Whalan’s decision of 7 November 2019 that the claimant’s assertion of jurisdiction was fundamentally defective and that the Notice of Commencement was invalid. The subsequent refusal of permission to appeal did not justify departing from that decision.
5. The claimant’s argument that the defendant had waived the jurisdictional objection was not accepted. The issue had not been properly advanced for determination at this hearing, and the claimant’s late service of its bundle and skeleton argument impeded fair consideration.
6. The claimant lost on the issue before the court. The general rule under CPR 44.2 was engaged, but written submissions were directed on the incidence and basis of the costs of the hearing.

The judgment records earlier decisions in the same dispute:

• High Court: HHJ Pelling KC, [2023] EWHC 1005 (Comm), refused permission to appeal Master Whalan’s decision.
• Court of Appeal: Popplewell LJ refused permission to appeal and a stay on 23 April 2024.
• Senior Courts Costs Office: the present court followed Master Whalan’s decision and found that the claimant had not invoked SCCO jurisdiction.