The practice in the Commercial Court for one judge to hear applications for leave to appeal from an arbitrator's award and for the substantive appeal then to be heard by another judge is justified on the ground that there is a strong bias against interfering with awards by giving leave to appeal and the judge giving leave will necessarily have formed his own, albeit provisional, views on the merits. The case for the application for leave and the substantive appeal being heard by different judges is, however, stronger in the case of one-off contracts than in the case of standard contracts where there is a need in the trade for an authoritative decision on their construction. Moreover there will be exceptional cases, such as where there is urgency or where the matter has been fully deployed and the answer in the judge's view is totally and unanswerably clear, where it will be right for the same judge to hear the appeal. Ultimately, however, it is a matter for the judge's discretion (see p 145
b to
g and p 147
f g, post).
Where the Court of Appeal has given leave to appeal to the House of Lords on the question whether the judge of the Commercial Court had power to give leave from an arbitrator's interim award and further stages in the arbitration are in abeyance pending a final decision on whether arbitrator's interim award was correct, the appropriate procedure is for the Commercial Court judge to proceed with the hearing of the appeal from the arbitrator's award and to record a judgment in writing which he should sign and place in a sealed envelope to be opened in the event of the House of Lords deciding that there was jurisdiction to hear the appeal rather than for the matter being adjourned pending the decision
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of the House of Lords. In the event of the judge dying or retiring before the envelope is opened, his written decision will still be a valid judgment made at the time he signed it but taking effect only when the envelope is opened (see p 146
e f and p 147
f g, post).
We did not consider the question of what should happen if leave to appeal to the High Court was granted. That has now happened and the parties are back with two disputes. The first dispute is whether the appeal should go ahead at all pending a decision by the House of Lords. The second is whether Hirst J, who granted leave after a hearing which lasted some two days, should himself hear the appeal.
If I could deal with the second questions first, there has grown up a practice in the Commercial Court of one judge hearing applications for leave to appeal and another judge hearing the appeal itself. For my part, I can understand the practice, although I was not aware of it, because there is a strong bias against interfering with awards by giving leave to appeal and the judge granting leave will necessarily have formed and expressed his, albeit provisional, views on the merits. The bias is in favour of finality rather than legality, to use the phraseology which was used by Lord Diplock (see
Pioneer Shipping Ltd v BTP Tioxide Ltd, The Nema [1981] 2 All ER 1030 at 1037, [1982] AC 724 at 739-740). The bias is less strong in cases of standard contracts where there is a need in the trade for an authoritative decision on their construction. The justification for this bias would be much stronger in a 'one-off' case where the judge has to be fairly sure that the arbitrator is wrong before he gives leave to appeal.
Might I add parenthetically that 'fairly sure' is not now to be used as a new test. It merely represents my recollection of the effect of the authorities. For my purposes it is sufficient to say that the argument for a different judge hearing the substantive appeal is stronger in the case of one-off contracts than it is in the case of standard contracts.
On the other hand, there must be exceptional cases where it would be quite right that the same judge should hear the appeal. One case is that of urgency. There may be no other judge immediately available and it may save a great deal of time to go straight on. The other is where, contrary to
Pioneer Shipping Ltd v BTP Tioxide Ltd, The Nema [1981] 2 All ER 1030, [1982] AC 724 and no doubt despite the best efforts of the judge, the matter has been very fully deployed and the answer in the view of the judge is totally and unanswerably clear. In such a case there would be a considerable waste of costs in having a further substantive hearing. That was the case which confronted Bingham J in
Tor Line AB v Alltrans Group of Canada Ltd, The TFL Prosperity [1982] 1 Lloyd's Rep 617 at 626-627. He decided to go ahead and himself hear the appeal. Ironically, having granted leave, he decided that there was nothing in the point, but that is not directly relevant.
Ultimately it must be a matter for the judge's discretion. But in this particular case, for reasons which I will revert to in a moment, I think that we are justified in interfering with the decision of Hirst J.
I then turn to the first question, which is: should the appeal be heard at all before the House of Lords has given judgment? We are told that the House of Lords will take nine to twelve months before it can get around to this appeal. It is not for me to interfere with listing in the House of Lords. It is for their Lordships' House to decide upon relative priorities, but I would make it clear, for my part, that, if there were a system whereby the Court of Appeal certified expedition, I have little doubt that we would have certified-certainly I would have certified-a need for a high degree of expedition in this case. There are very large sums of money involved, and not only the parties but other people do not know where they stand. This cannot be in the interests of the insurance market as a whole, let alone those who are directly concerned. Furthermore, this matter has arisen in the middle of an arbitration and if, as I think inevitable, there are knock-on effects on the remainder of the arbitration this compounds the difficulties which have already arisen. So I express the personal view that I hope that their Lordships will
145 give this matter the highest degree of priority which is consistent with competing claims by other appeals and, if it is possible, will hear the appeal long before the suggested time of nine to twelve months.
There are obvious advantages in the meantime in hearing the appeal to the High Court. There is bound to be some pause before the House of Lords hears this appeal and the time would be better spent hearing the appeal to the High Court now rather than waiting until their Lordships have decided the matter and then, if it is appropriate, going ahead with the appeal.
However, there is a problem and the problem arises in this way. Mr Colman QC's clients want the judge's judgment on this appeal for use in a subsequent phase of the arbitration when the arbitrator will be dealing with what are apparently known as CCR claims, CCR standing for the Center for Claims Resolution. The House of Lords may affirm this court's decision, in which case a judge will have ruled in relation to this particular award in a way which will no doubt assist Mr MacCrindle QC when he comes to the CCR award.
If, on the other hand, the House of Lords were to reverse our decision, we should have the undesirable situation that Mr MacCrindle was being referred to and invited to follow a judgment which should never have been given, because on that hypothesis the House of Lords would have decided that this was a Convention award and that there was no jurisdiction in the High Court to hear an appeal from it. But I think that it is possible to prevent it happening and at the same time to make progress pending the appeal to the House of Lords.
It cannot be right that that should happen. I would order that the Commercial Court judge be at liberty to go ahead with hearing the appeal from Mr MacCrindle's award and that he should give a judgment in writing, which should be signed by him and placed in a sealed envelope to be opened only in the event of the decision of the House of Lords being that there was jurisdiction to hear that appeal. I would add that every eventuality should be covered because this is an arbitration in which every eventuality happens. Without wishing the judge, whoever he may be, who hears this appeal any ill, I think it should be made clear that, if he dies or retires before the envelope is opened, his written decision would still be a valid judgment, made at the time he signed it but taking effect only when opened.
I come back to the question of the reason why the appeal should I think be heard by a different judge. Hirst J has expressed reasonably strong views upon the meaning of a particular clause. This is not a case of extreme urgency. We have a little time in hand before the House of Lords can give judgment. It may well be that any other judge would reach the same conclusion but it would be more satisfactory if another judge heard the appeal. I recognise that the judge's decision was discretionary, But I think that we are entitled to interfere because in my judgment he erred in principle. It appears that he accepted the proposition that it was desirable that there should be a judgment in any event in order to assist with the later phase of the arbitration in relation to the CCR claim. That cannot be right. Any judgment given at this stage ought to be contingent upon the House of Lords dismissing the appeal from this court, and the way in which the judge contemplated that his judgment should be used was inconsistent with that approach.
Accordingly, I would order that the appeal to the High Court be heard by a different judge and that the appeal should go ahead.
Let me add one other thing. It has become apparent in the course of this hearing that it would be open to Mr MacCrindle in the CCR tranche of the arbitration to consent to an application under s 2 of the Arbitration Act 1979, which is in these terms:
So it would appear that Mr MacCrindle, in the context of the CCR part of the reference, could consent to the High Court determining the question of law which, as Mr Colman says, has arisen in the present appeal and will arise in the CCR tranche.
That in itself discloses a further complication. It was common ground that the only reason why Mr MacCrindle's award was a Convention award was that after that phase of the arbitration was concluded he signed the award in Paris. It must follow that the powers of the High Court, as supervising court, were fully exercisable throughout the course of the arbitration up to the moment when the award was signed. Thereafter, in the view of the majority of this court, they ceased to be exercisable. This leads to the conclusion that an arbitrator appointed to conduct an arbitration in London under English curial law can by signing his award in another Convention country execute an 'exclusion award' having in some respects an even wider effect than an exclusion agreement executed by the parties under s 3 of the Arbitration Act 1979, since it extends to, for example, s 22 of the Arbitration Act 1950. I only wish that I had thought of the point originally, but I now have an opportunity of adding an addendum to my judgment of 11 March.
For the reasons that I have expressed somewhat inadequately-and I mean that because it has been very much an extempore judgment-I, for my part, would say that another judge should hear this appeal, the appeal should go ahead and the decision on the appeal, that is to say the reasons, should be sealed until such time as the House of Lords has decided the appeal from this court, which I hope will be in the very near future.
