| Date | 12 September 1996 |
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| Judgment | Community Integrated Care -v- Riaz Afzal. 5 June 1996 |
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| The Issue | Appeal on arbitrator's award based upon procedural misconduct. |
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| Implication |
Reluctance of the courts to remit or set aside arbitrator's awards in cases of alleged misconduct, unless there is clear evidence that the award would be substantially affected. |
printIt is to be hoped that the 1996 Arbitration Act will free arbitrators from over pedantic attention to legal ritual, but one should never under-estimate the guile of lawyers to thwart this objective. Certainly it is the case that arbitrators currently work constantly under the spectre of an appeal against their awards for procedural irregularities. The case of Community Integrated Care Ltd -v- Riaz Afzal concerned an appeal against an arbitrator's award. Mr Afzal commenced arbitration proceedings against CIC claiming breach of contract in the termination of his employment to act as architect in the construction of a nursing home at Nantwich. In addition, he claimed infringement of copyright in his design drawings and other documents in the construction by CIC of another project at Sandbach. The arbitrator upheld both those claims save for the copyright claim in relation to mechanical and electrical specifications and awarded Mr Afzal approximately £20,000 together with all the costs of the arbitration. CIC sought to appeal this award in respect of two matters. Firstly, they sought remission or setting aside of the award on liability because of an alleged procedural irregularity in the course of the reference. Secondly, they considered that the arbitrator had misdirected himself in the exercise of his discretion as to costs in that he had failed to take account of written, without prejudice, offers made to Mr Afzal for more than the amount awarded in the arbitration. Dealing quickly with the second matter, Mr Justice Waller in the Commercial Court said that the only method of challenge was by obtaining leave to appeal and to do so they would need an extension of time as CIC had failed to lodge such application within the prescribed time limit. In the circumstances he was not prepared to give leave for appeal, nor would he give reasons for his refusal, and that was that. On the first question of procedural irregularity, the matter was more contorted. At the outset of the reference to arbitration, CIC had suggested, and it had been directed by the arbitrator, that no expert evidence would need to be called. Some twenty-odd months later, CIC having by this stage appointed alternative solicitors, they took the view that they ought to call an independent expert in order to concentrate the mind of the arbitrator on, as they saw it, the lack of objective similarities between the two sets of designs. They had in fact obtained a report from an independent expert, one Mr Salisbury, who was obviously prepared to give evidence which suited CIC to this effect. Thus a letter was written requesting the arbitrator to admit the evidence of Mr Salisbury. Not surprisingly, those acting for Mr Afzal opposed the idea. In order to resolve this impasse, the arbitrator decided to read the report to determine whether it should be allowed in, or kept out. A hearing was held and subsequently the arbitrator directed that the other side, that is Mr Afzal, should be given the opportunity to cross-examine Mr Salisbury. What was not clear was whether the arbitrator was saying that he would wait for the cross-examination and then rule on whether the report and that examination was admissible evidence, or whether he was in fact saying that he now accepted the report as evidence and in so doing would allow it to be submitted to cross-examination. In the event the judge on appeal held that the latter was the correct interpretation of the arbitrator's direction. Of considerable importance, however, was that the arbitrator had also said in his letter that he was not greatly helped by the report in that he did not find any great difference from what he had already noted in observing the drawings himself. Against this background matters now took a surprising turn. Through a mix up of diaries, the arbitrator and counsel for both parties found themselves in each other's company in the arbitrator's office in the absence of solicitors and clients. They decided it would be an appropriate use of their time if they came to some agreement as to how Mr Salisbury's expert report should be dealt with. In the event counsel acting for Mr Afzal appears to have obtained the upper hand, suggesting that the report should be 'chucked in the bin', and it appears that the arbitrator took that suggestion literally and accepted that this was in effect what he would do. Counsel for CIC, on the other hand, whilst maintaining that the report should remain in, appears to have put up only a token defence. No doubt it was felt that the key points which might be contained in Mr Salisbury's report could in any event be conveyed in his closing submission, and that nothing substantial would be lost if Mr Salisbury's report was refused as evidence. Whilst all these circumstances might be said to be rather unique, Mr Justice Waller did not consider that they amounted to misconduct on the part of the arbitrator. In consequence to all of this, the court decided that it simply would not be justified to remit the matter back to the arbitrator and accordingly the application for remission or setting aside of the arbitrator's award was refused.
CJ-9630
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