A decision reached by an adjudicator can be overturned in court, one reached by an arbitrator cannot – unless the claimant establishes that he is incompetent
Counsel who appeared on behalf of the claimants didn’t pull any punches in his criticisms of the arbitrator. His award was, he said, “confused and contradictory”, it “answered the wrong questions” and “was one big ambiguity from beginning to end”.
That’s what he told the High Court judge.
He wanted the arbitrator’s award set aside and the arbitrator removed from his post. And, if at the end of all those complaints someone had shouted from the back of the court “What do you think of the show so far?” The judge might have been tempted to shout back: “Rubbish”. Instead, of course, he put it far more politely, “I consider that the claimants’ criticisms of the award are wholly incorrect.”
The claimants were Mr and Mrs Duncan Sinclair. They live in Hertford. Their building work had not gone well. They deserve some sympathy. They decided to build a swimming pool, for which the contract sum was £307,334, not counting professional fees. “Extensive defects manifested themselves,” said the judge. They were put right at a cost of £225,000. Some pool – some defect! The claimants began an arbitration against the builder, Woods of Winchester. An arbitrator was duly appointed. He made an award in February, that left the claimants even more down in the dumps. They didn’t like what the arbitrator decided. But why should that lead to an attack on the arbitrator?
Let me explain things in slightly wider terms. Arbitration, unlike adjudication is binding forever. An arbitrator’s award is cast in stone. Serious stuff. And, if the arbitrator has accepted an argument in law that is wrong, or accepted as good evidence evidence that is poor, well that’s too bad. Trying to get an appeal up and running on the basis that the arbitrator has chosen wrong arguments and accepted half-baked explanations of the law or duff evidence is hopeless. So, it is not at all surprising if the disappointed party begins to explore other ways of trying to have the award set aside.
It is this bit that is controversial; some begin an attack on the conduct of the arbitrator.
Let’s put the Sinclair case to one side for a moment and look at the tactics that are sometimes used by parties wishing to overturn an arbitrator’s decision. Some lay minefields and tank traps for the arbitrator on the voyage through the arbitration. A finger is pointed at a procedural error or oddity, another at the odd delay, another at the odd remark, another at the odd moment of inflexibility, tone or irritability. Missing from the chronology is the fact that the arbitrator has been teased, bullied or pushed to his wits’ end. Bullying really is a serious point. Do you see what is happening? Since it is almost impossible to appeal an arbitrator’s “wrong” decision, the arbitrator has to be shown up as an incompetent half-wit who is not to be trusted to take a binding decision.
Some lay minefields and tank traps for the arbitrator on the voyage through the arbitration. A finger is pointed at a procedural error or oddity
Okay, let’s get back to this Sinclair and Woods case. There were three heads to the complaint about the arbitrator: conduct prior to the hearing, at the hearing and the award. I won’t itemise the points but there were a lot.
What counsel for the claimant was doing was to add up all these so-called irregularities into a supermarket trolly load. Snag was, the judge, picked them off one by one: the complaints were “risible”, “hopeless”, “not even arguable”, “grotesquely unfair to the arbitrator”; in short, “no legitimate criticism can be made of the award”. The judge concluded, “I generally
regard the criticisms of the arbitrator as very unfair and the applications relying on those criticisms as misconceived.”
The trouble is that in times past some judges have not taken such a supportive line. Arbitrators have been removed, reputations ruined. Worse still, arbitrators read about all this and can easily become over-cautious. On the one hand they are encouraged to actively get on with the arbitration only to find that they face the thick end of a personal attack for conduct inconsistent with due process.
The system of bringing removal proceedings, as happened here, in the middle of an arbitration may easily cause arbitrators to spend time looking over their shoulder. It is a flaw in the 1996 Arbitration Act.