Ravfox Limited v Bexmoor Limited

Section 63(4) of the Arbitration Act 1996 concerns assessment of recoverable costs, not their allocation between the parties. The court therefore cannot use it to make a costs order where the tribunal has made none.

A tribunal that has jurisdiction to rule on its own substantive jurisdiction may also award costs incurred in determining that jurisdictional issue, even if it concludes that it lacks jurisdiction over the merits. A short communication declining to make a costs award is not itself an award capable of appeal or challenge.

The claimant, a management company, was respondent to an arbitration commenced by the defendant concerning service charges and related matters. The claimant challenged the arbitrator’s substantive jurisdiction. The arbitrator upheld that challenge but declined to determine costs, considering that he lacked jurisdiction to do so.

The claimant sought an order from the court under section 63(4) of the Arbitration Act 1996, permission to appeal under section 69, and relief under section 68. The central issues were whether the court could allocate the costs, whether the arbitrator had power to award costs of the jurisdictional challenge, whether the arbitrator’s response was an award, and whether the claimant’s appeal or challenge was in time.

1. Section 63(4) claim. The claim was dismissed. Section 61 concerns allocation of arbitration costs between the parties. Section 63 concerns which allocated costs are recoverable and their assessment. It does not confer on the court a power to allocate costs where the tribunal has not done so [13]-[16].
2. Arbitrator’s jurisdiction. The arbitrator was wrong to conclude that he lacked jurisdiction to award the claimant its costs of successfully challenging jurisdiction. Proceedings under sections 30 and 31 are valid arbitral proceedings because the tribunal has statutory power to rule on its own substantive jurisdiction. Section 61 permits an award allocating the costs of the arbitration, and section 59 defines those costs broadly enough to include the parties’ costs of a jurisdictional challenge [17]-[25]. Rollitt v Ballard was treated as materially supporting that conclusion. The later statutory amendment was regarded as clarifying, rather than changing, the law [19]-[25].
3. Section 69 appeal. The Costs Award was not an award. The arbitrator was declining to make a costs award, by an informal email and without determining an application or hearing representations. The only award was the Main Award [28]-[32].
4. The appeal was out of time because the 28-day period under section 70(3) ran from the date of the award, not its later release. The claimant had not validly engaged section 57(3), and no extension application had been made under section 79 [33]-[36]. Applying the guidance in Rollitt v Ballard, the court refused an extension because the delay was substantial and unreasonable, the procedural defaults were serious, and the application had not been properly notified [37]-[38]. Leave would also have been refused because the error was not obviously wrong, the question was not one requiring determination on an appeal from an award, and section 69(3)(d) was not satisfied [39]-[41].
5. Section 68 challenge. There was no challenge to the Costs Award because it was not an award. The Main Award did not contain a serious irregularity under section 68(2)(d): although it did not expressly address costs between the parties, its reasoning showed that the arbitrator had decided that he lacked jurisdiction to award them [42]-[44].
6. The section 63 claim and section 68 challenge were dismissed. Time was not extended and leave to appeal was refused. The proceedings were dismissed [45]-[48].

First-instance decision. No prior appellate decision is stated in the judgment.