| Date | 10 October 1996 |
|
|
| Judgment | Ledwood Construction Ltd -v- Kier Construction Ltd. 11 July 1996 |
|
|
| The Issue | Use of Scott Schedules in Arbitration. |
|
|
| Implication |
Where the interlocutory history shows the parties intended the arbitration to follow a Scott Schedule format in his award, the matter may be remitted to the arbitrator where each aspect of the dispute has not been adjudicated upon. |
printThe case of GMTC Tools -v- Yuasa Warwick in 1995 decided that a judge was wrong in ordering parties to a construction dispute to plead their case in the form of Scott Schedules. This was considered to be too much of a straight jacket for the parties, and providing they pleaded their case in such a way that the other party was able to respond effectively to the case it had to answer, the pleadings should not be forced into any particular format. The case of Ledwood Construction -v- Kier Construction has looked at this question from a completely different angle: namely where the parties had agreed to use a Scott Schedule in the presentation and hearing of their dispute, would an arbitrator be obliged to follow that Scott Schedule in the presentation of his award and, if he failed to do so, would a court be entitled to remit the matter back to the arbitrator under Section 22.1 of the 1950 Arbitration Act? This arbitration is obviously one of those which gives arbitration a bad name. The arbitrator had to date made four interim awards of which the first was procedural and the fourth corrected minor errors in the third. Each party had made application for leave to appeal and for other relief under the Arbitration Acts in relation to the substantive third award. Section 22.1 of the 1950 Act provides in simple and unqualified terms that in all cases of reference to arbitration the court may from time to time remit the matters referred or any of them to the reconsideration of the arbitrator. On the face of it, that gives the court complete discretion, but previous cases have shown that the courts accept limits to its exercise of this discretion. In practice the power to remit has been confined to certain recognised categories, namely: 1. An award bad on its face 2. Misconduct on the part of the arbitrator 3. A mistake admitted by the arbitrator 4. Additional evidence It had been suggested that the 1991 case of King -v- McKenna showed that an additional category of 'procedural mishap' might also be considered. In this case, Lord Donaldson had said: "In my judgment the remission jurisdiction extends beyond the four traditional grounds to any cases where, notwithstanding that the arbitrators have acted with complete propriety, due to mishap or misunderstanding some aspect of the dispute which has been the subject of the reference has not been considered and adjudicated upon as fully as or in a manner which the parties were entitled to expect and it would be inequitable to allow the award to take effect without some further consideration by the arbitrator." The Courts have been reluctant to allow Section 22.1 to be used as a general means of correcting errors on the part of the arbitrator and, in particular, to ensure that it could not be used where the appropriate remedy, if any, would be an appeal under Section 1(1) of the 1979 Act. Returning to our Scott Schedule, this was a daunting document of some 165 A3 and A4 pages. The trial of these issues had taken place over two periods lasting 36 and 24 days. Ledwood's case was that the hearing leading to the third award was conducted by reference to the Scott Schedule and indeed in Kier's closing submission they had invited the arbitrator to make his awards by reference to the Scott Schedule items. His Honour Judge Hicks QC, an official referee, felt that this was the central issue: "There is really no room for doubt in my mind that both parties intended, expected and understood that the arbitrator would express his award by reference to the Scott Schedule." "In my judgment a failure on the part of the arbitrator in the circumstances of that interlocutory history and of the conduct of the hearing to frame his award in such a way as to enable the parties to see what his decision had been on each Scott Schedule item would mean that, in Lord Donaldson's words, some aspect of the dispute had not been adjudicated upon as fully as or in a manner which the parties were entitled to expect". In conclusion he held that there were a number of heads in the Scott Schedule upon which there were no adequate findings in the arbitrator's award and thus was satisfied that he should exercise his discretion in favour of remitting the matter as identified in his judgment to the reconsideration of the arbitrator. Of course Section 22 of the 1950 Act will soon be a thing of the past. Section 68 of the new 1996 Arbitration Act provides that a party can apply to the court challenging an award on the ground of serious irregularity carrying substantial injustice to the applicant. Included in this will be a failure by the arbitration tribunal to deal with all the issues that are put to it and failure to comply with any requirements as to the form of the award. Although intended to narrow down the occasions when remission may occur, the various cases and categories which previously applied under Section 22 of the 1950 Act will no doubt continue to provide guidance in the application of the new Arbitration Act.
CJ-9634
|
|||
|
© Brewer Consulting |
|||
 |
|||