Kier were the main contractor for the construction of access roads to the Neath River Bridge. Ledwood were their subcontractor for part of the Works.

The court accepted Ledwood’s submission that the hearing leading to the arbitrator’s award was conducted by reference to a Scott Schedule, and both parties intended and expected that the arbitrator would express his award by reference to it. Following the Court of Appeal decision in King v. Thomas McKenna [1991] 1 All ER 654 the Court possessed the jurisdiction to remit the matter to the arbitrator to frame his award in such a way as to enable the parties to see what his decision had been on each item. In Lord Donaldson’s words in King "Some aspect of the dispute had not been adjudicated upon as fully as or in a manner which the parties were entitled to expect."

The Claimant sought to have the arbitrator removed on the grounds of misconduct since it was apparent to a reasonable man that there was a real danger of bias, because:

The arbitrator also took exception to the Claimant’s representative whom he considered to be making difficulties and wrote two letters to him which the judge considered to be intemperate.

The judge held that in the circumstances the arbitrator did misconduct the proceedings within the meaning of S.23 of the 1950 Act and the right course was removal. The Respondent’s attitude throughout was entirely reasonable and sensible and they did not oppose the application. Since there was no reason why costs should not follow the event the arbitrator should pay the costs of the motion for his removal, including those of the Respondent.

The discretion given to the court by section 19(1) of the Arbitration Act 1950 to appoint the arbitrator was completely unfettered. Inordinate and inexcusable delay by a party to an arbitration agreement in applying for an appointment to be made, in the absence of prejudice, was a proper ground for refusing to exercise discretion in that party’s favour.

The parties to the action, whose vessels had collided, were entitled to adduce evidence on the reconstruction of the collision. Although it was established practice that expert evidence on matters of navigation and seamanship could not be adduced before a court which was assisted by nautical assessors, the parties had prepared their respective cases on the basis of an exchange of the experts’ reports containing or commenting on reconstructions and therefore expert evidence on the reconstruction of the collision was admissible.

The courts had jurisdiction to order a liquidator as a non-party personally to pay the costs of litigation initiated by him on behalf of the company, but given the public interest in liquidators being able to act for companies without being exposed to personal liability for costs, it would only be in exceptional cases that the jurisdiction would be exercised, and impropriety would be a necessary ingredient. The primary remedy of a defendant facing a company in liquidation was to ask for security for costs.

Editor’s Notes

Regarding the Birthey Case mentioned above, we note with approval the discontinuance of the word "misconduct" from the new Act, which always had unfortunate connotations in view of its euphemistic use by the News of the World in days when the style of reporting was less salacious. However, arbitrators need to be aware that the new Act will not save them from having to pay costs of one or both parties in the case of an application to the court for removal.

Consequential loss means loss over and above that which arose as a direct result of such breaches as the plaintiff might prove in accordance with the rules laid down in Hadley v Baxendale ((1854) 9 Ex 341)

Mr Justice Alliot so held in the Queen’s Bench Division on December 20 when determining as a preliminary issue the proper construction of a term of a contract between British Sugar plc and NEI Power Projects Ltd.

HIS LORDSHIP said that the contract was worth £106,000 but the plaintiffs claimed damages totalling £5,009,637.

Having considered Millars Machinery Co Ltd v David Way & Son ((1935) Com Cas 204); Saint Line Ltd v Richardsons, Westgarth & Co Ltd ([1940] 2 KB 99) and Croudace Construction Ltd v Cawoods Concrete Products Ltd ([1978] 2 LI LR 55) and making allowance for the fact that every case of construction would turn upon the particular contract or term, his Lordship said he found those authorities applicable, binding and helpful.

He concluded that "consequential loss" meant such loss as the plaintiffs could prove over and above that which arose as a direct result of such breaches as the plaintiff could prove in accordance with Hadley v Baxendale.

Where the material facts on whose basis a civil action had been conducted were known by the plaintiff to have altered, he was under a duty to disclose the fact to the defendant and the judge.

It was the duty of every litigant not to mislead the court or his opponent, not just by giving evidence known to be untrue, but also by leading the court to believe a certain state of affairs, once believed to be true, but now no longer so. That duty continued until the judge had given judgment.

But where the case had been conducted on the basis of certain material facts which were an essential part of the case, in this case the plaintiff’s condition at the time of the trial and the prognosis, which were discovered before judgment to be significantly different, the court was being misled, not by the defendant’s failure to put before it material of which she could or should have been aware, but by the plaintiff’s and his advisers’ failure to correct an incorrect appreciation which the court would otherwise have.

Where a provincial firm of solicitors was more specialised than was the norm for the area, a taxation of costs made in relation to its work could be calculated at a higher hourly rate than the local norm. The fixing of local rates for taxation could be used in most cases but that should not be allowed to render taxation a formality by displacing the exercise of discretion in each case.

The disputes between the parties relating to the shipment of a cargo were referred to arbitration. An award was made in the owners’ favour for the full freight for the intended journey to Turkey plus damages calculated by reference to the period during which the vessel was detained in Durban. The charterers were granted leave to appeal, and this part of the award was remitted to the arbitrator to reconsider the quantification of the owners’ loss caused by the detention.

The charterers argued that the savings made by the owners in not having to undertake the journey to Turkey should be taken into account in the assessment of damages. The owners challenged the arbitrator’s jurisdiction to consider this issue, and the arbitrator concurred that he did not have the jurisdiction to consider the new arguments put forward by the charterers. The charterers sought leave to appeal on the ground that the arbitrator had erred in declining the jurisdiction. They also sought leave to appeal out of time against the first award, maintaining that the arbitrator had erred in not giving credit for the savings made by owners in not having to undertake the journey to Turkey.

Held:

1. Once an arbitrator has made an award, he is functus officio, and his jurisdiction is only reinstated to the extent that the courts remit the award. A limited remission would prima facie be a remission for him to reconsider matters on the issues pleaded or otherwise before him at the original hearing only, otherwise a party might change the scope of the arbitration.

2. On the facts of the case, the arbitrator did not have the jurisdiction to entertain the new issue of the saving of the expense of the journey to Turkey. The court declined to grant leave to appeal against the arbitrator’s first award.

3. The court also declined to grant leave to appeal out of time against the arbitrator’s first award. Whilst it possessed the jurisdiction under the Arbitration Act 1979, the instant case was not one where it was appropriate to exercise it. To grant leave to appeal so long after the making of the first award would be contrary to the finality of arbitration awards.

We regret the death of Lord Roskill (obituary in The Guardian, 7 October 96) of Junior Books fame. Although much criticised at the time, his opinion has endured so far.