Archive for December, 2011

Obviously wrong or not so obvious?

A reviewed rent is very often agreed between the parties.  However, on occasions, the matter might be referred to a third party for determination.  Many leases state an independent expert be appointed but some parties require the appointment of an arbitrator believing his/her decision easier to appeal to the courts.

S69 of the Arbitration Act 1996 states that a party cannot appeal an arbitrator’s decision without the consent of the other party or the leave of the court.  Leave will only be granted it the appealing party can show either that the arbitrator’s decision was obviously wrong or that the question is of general public importance and the decision was open to serious doubt.  Finally, the appealing party must, under s69, show that it is just and proper for the court to determine the issue.

In HMV UK Ltd v Propinvest Friar Ltd Partnership [2011] CofA 1193, a well known and well respected landlord and tenant QC was appointed Arbitrator to determine a legal issue which arose between the parties at rent review.  The Tenant, disappointed  with the decision, applied to the courts for leave to appeal stating that the Arbitrator was ‘obviously wrong’.

The Court of Appeal held rights to appeal under the 1996 Act are severely restricted and it was not sufficient to show that a judge might or even would have come to a different decision.  To be obviously wrong, the Arbitrator’s error should be obvious to the judge on a perusal of the Award itself.  An oral hearing should not generally be necessary.  Further, in an obiter comment, the Court of Appeal stated there was authority for the view that it was not just and proper for the court to determine a question where the parties had chosen it be determined by their own appointee.  The Tenant’s appeal was dismissed.

If you wish to hear more, why not contact Hatherleigh Training?