The Court of Appeal has handed down judgment in this case, concerning an application by Frontier Agriculture to enforce an arbitration award against Bratt Brothers. The case raises interesting questions concerning what constitutes participation in arbitration proceedings, and also in relation to enforcement proceedings under section 66 of the Arbitration Act 1996.
The dispute arose out of two contracts for the supply of wheat. Frontier commenced arbitration proceedings under the Agricultural Industries Confederation (AIC) rules following Bratt Bros’ failure to deliver under these contracts and obtained an award for damages. It subsequently sought to enforce that award via the summary enforcement procedure provided for in section 66.
Bratt Bros’ primary case was that it had never entered into the second contract. At first instance Blair J accepted Frontier’s argument that Bratt Bros had participated in the arbitration proceedings on both contracts by agreeing to the appointment of a sole arbitrator, and that having not disputed the existence of the second contract sooner, it was now too late to do so under section 73 of the Act.
The Court of Appeal gave permission to appeal on the question of whether Bratt Bros had participated in an arbitration on the second contract, and therefore whether it was too late (by reason of section 73) to dispute the existence of the second contract.
The Court of Appeal accepted (very shortly, and obiter) that participation in appointment of an arbitrator could constitute participation in the arbitration for the purposes of sections 72 and 73 of the Act, and the requirements which they impose on parties to raise objections to arbitral proceedings promptly. However, on itself construing the email correspondence, on the basis of which the arbitrator and Blair J had concluded that Bratt Bros had participated in an arbitration in relation to both contracts, the Court reached the view that Bratt Bros had not participated in the arbitration relating to the second contract. Bratt Bros was therefore not too late to dispute the existence of that second contract.
Frontier also contended that Bratt Bros had not done enough to discharge the burden of proof which it bore under sub-section 66(3), to show at least a real prospect of success on the question of whether it had entered into the second contract. The only evidence before the Court was a denial, contained in Bratt Bros’ statements of case, that the second contract had been entered into, and some very limited evidence adduced only after the first instance hearing before Blair J. Notwithstanding this “evidentially sparse situation”, the Court of Appeal concluded that Bratt Bros had done enough to establish a real prospect success.
The Appeal was therefore allowed, and the matter remitted to the Commercial Court for determination of the question of whether the second contract was in fact agreed between the parties.
Rupert Hamilton appeared for the Respondent (instructed by Reed Smith LLP)