| Date | 9 May 1996 |
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| Judgment | Tarmac Construction Ltd -v- Colt International Ltd, 4 March 1996 15 |
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| The Issue | The use of legal assessors in arbitration and the removal of arbitrators for misconduct. |
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| Implication |
Section 23 (1) of the 1950 Arbitration Act provides for the removal of an arbitrator for misconduct. Where it has been agreed to use a legal assessor the rbitrator was entitled to assistance at every stage in formulating questions to be put to that assessor. |
printAs a means of resolving construction disputes quickly and commercially, arbitration continues to receive an extremely bad press. Arbitrators are generally powerless to prevent the proceedings from becoming enmeshed in legal complexity. All too often of course this arises as a result of the complexity of the issues themselves, and it will be instructive indeed to see the results of the current debate on the adjudication provisions which the industry are to adopt as a result of the 'construction' bill, and whether these will result in speedy dispute resolution or simply arbitration by another name. The case of Tarmac Construction Ltd and Colt International Ltd provides an example of the type of difficulties arbitrators face. Colt were sub-contractors to Tarmac for the erection of a roof structure on a new assembly hall for the National Exhibition Centre in Birmingham. Tarmac argued that the work done by Colt was incompetent and that nearly £400,000 would have to be expended to repair leaks in the roof. Colt argued that the defects were down to poor design and that this was not their responsibility. Tarmac of course were caught in the classic dilemma of the main contractor. In their endeavour to settle this and no doubt other matters with their client, they were forced to take expert and legal advice and adopt a commercial stance in the resolution of the various accounts up the line. Once in arbitration with the sub-contractor however, there arose an issue as to the extent to which any such settlement arrangements between Tarmac and the Employer might have an impact on the arbitration. This is where arbitration can start to become hopelessly bogged down in legal argument. During the course of pleading the case, Colt recognised that there may be documents in the "custody, possession or power" of Tarmac which might cast some light on the issues in their arbitration. Complex legal questions of privilege (the right to non-disclosure of documents), and whether by reason of the nature of the proceedings Tarmac had waived their entitlement to privilege in certain documents, were put before the arbitrator, Mr Christopher Dancaster. Mr Dancaster, a chartered surveyor without legal qualifications, recognised that it would be improper for him to decide these matters of law, and accordingly he advised the parties that he would wish to take advice from Queen's Counsel. All of this was of course not being made any easier by the legal representatives of both parties, who by this stage appeared to be unable to agree on the time of day. One party wanted the arbitrator to sit with the QC at an interlocutory hearing; the other responded that the advice sought could easily be obtained by a telephone call. In the event the arbitrator agreed to an interlocutory hearing without a lawyer in attendance, during which he would hear the various representations of the parties and decide whether further advice was needed. The day arrived and before lunchtime it became clear to everyone that the arbitrator could not answer the questions which were being put before him without obtaining legal advice. It was resolved that the arbitrator would produce a draft request for legal opinion based upon the various representations and exchanges which had taken place between the parties, and invite the parties to agree its contents. Once more the parties representatives could not agree. Tarmac's solicitors considered that the questions being put to Counsel went too far, mixing fact and law. Two days later Colt's solicitor joined in the complaint, whinging about the arbitrator having failed to instruct leading counsel and that the trial date was now in jeopardy. The following day Colt's solicitors notified the arbitrator that they intended to seek his removal due to misconduct under Section 23 (1) of the 1950 Arbitration Act. Mr Justice Morison indicated that the test to be applied on an application this sort is whether the circumstances are such that a reasonable man would think that there was a real likelihood of bias. He added that there were also allegations being made against the arbitrator that he was so incompetent that he could not be trusted to adjudicate impartially between the parties. The judge said that it was entirely unclear to him precisely what the suggestion of bias and incompetence was. He held that the general picture he had formed from the papers in the case was that throughout the arbitrator had endeavoured to meet the reasonable aspirations and wishes of the parties as to how he should proceed, and that the arbitrator had endeavoured to do justice between the parties in any decision that he had been called upon to make. He dismissed the application to remove the arbitrator, saying that not only did he think that the application was groundless, but that in his view it should never have been made. Arbitration is intended to be a commercial forum for the resolution of disputes often concerning complex technical issues. Allowing the matter to become bogged down in legal complexity brought a stinging rebuke from Mr Justice Morison "I would simply add this. It would be better, I think, if solicitors and Counsel who are taking part in an arbitration before a single arbitrator (who has no legal qualifications), if they sought to give him assistance at every stage in formulating questions which he might need to put to a legal adviser, rather than making adverse comments about the way he initially thought of deciding to deal with the matter.
CJ-9617
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