TRUSTEES OF THE EDMOND STERN SETTLEMENT V LEVY (NO 2)

[2008] EWHC 14 (TCC), Queen’s Bench Division, Technology and Construction Court, Mr Justice Akenhead, 13 January 2009

Arbitration – Arbitrator assessing damages at date of termination of contract – Respondent seeking to adduce evidence of later developments – Arbitrator refusing to admit evidence – Whether error of law – Whether serious irregularity – Arbitration Act 1996, sections 68 and 69

In November 2003 the parties entered into a contract under which the respondent was to provide project administration services in respect of the refurbishing of a property owned by the trustees. In October 2004 the trustees terminated the contract for alleged breach, and the respondent commenced an arbitration seeking payment of invoices and also damages for wrongful termination. The total sum sought was around £30,000. The arbitrator ruled in an initial award as to the meaning of the contract, and an application for permission to appeal against that ruling by the trustees were dismissed. Subsequently, the arbitrator ruled in a second award that evidence as to the cost of the works after the date of termination was inadmissible because damages were to be assessed at the date of the termination. In a final award the arbitrator assessed damages on that basis. The trustees sought permission to appeal against the final award under section 69 of the Arbitration Act 1996, and also appealed against the award on the ground in section 68(2)(a) of the 1996 Act that the arbitrator had failed to allow them to present their case. The court refused permission to appeal: although the question was one of law, the contract was one-off and the arbitrator was not obviously wrong. Further, some £200,000 had been incurred in legal costs by the respondent, and it would not have been just and proper to allow further sums to be expended by granting permission to appeal. The appeal under section 68 was dismissed on the primary ground that in the absence of any error of law in the award on the admissibility of the evidence, it could not be said that the trustees had been deprived of the opportunity to present relevant evidence.