England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		30 June 2005

Mr. Justice Cooke:

Introduction

1. This is an application for leave to appeal under Section 69 of the Arbitration Act 1996. The Award which is the subject of the appeal is dated 16^th August 2004 and the Arbitrators were Mr. Kenneth Rokison Q.C., Mr. Jonathan Gilman Q.C. and Mr. Jan Paulsson, a partner in Freshfields and the current president of the LCIA. The panel was thus a distinguished panel of lawyers with extensive knowledge and understanding of contract and insurance law. The Award ran to 229 pages with appendices constituting two ring binders full of documents. The Arbitrators considered 222 sample cases on an individual basis where it was alleged that the company (Interlife) which had been sold by the Claimants (the Sellers) to the Defendant (the Buyer) had mis-sold pensions to individuals in circumstances where those individuals had either failed to join or opted out of the occupational pension schemes which were available to them. The sums in issue are said to be of the order of £40 million.
2. The grounds of appeal take up twenty pages of single spaced type with a Schedule listing seven questions of law upon which the Sellers sought permission to appeal. That Schedule is attached. Not to be outdone, the Buyer served thirty-three pages of submissions which led to the Sellers' answer of a further forty pages. Not satisfied with this, the Court was presented with a sixty-three page skeleton argument on one side and a nineteen page skeleton argument on the other with substantial appendices to each. If the appeal was to succeed, most of the individual sample cases would fall to be reviewed, but there are approximately a further 2700 cases which the Arbitrators have not yet considered.
3. In mounting its application for permission to appeal, the Sellers initially accepted that the test they had to satisfy was that the Arbitrators were "obviously wrong" in the conclusions they had reached. Later they sought to say that there were matters of public importance involved and that some of the Arbitrators' conclusions were "open to serious doubt" even if not "obviously wrong".
4. The Buyer's approach was to say that the prime areas of complaint raised by the Sellers (issues 1 and 2) did not give rise to questions of law within the meaning of Section 69 of the Arbitration Act 1996, that no questions of general public importance were raised and that the Arbitrators' decisions were correct. As a fallback position, the Buyer argued that, if the Arbitrators' were obviously wrong on some of the points raised by the Sellers, then the Arbitrators' were also obviously wrong on the twelfth issue which the Arbitrators' decided, a matter of construction of the Deed of Indemnity in relation to the financial limitation set by a particular clause on the sums recoverable for breach. That contingent application, which was made out of time and without a formal application, does not arise because I have concluded that permission to appeal should not be given to the Sellers.
5. Although, as appears from the terms of the judgment, I have determined the issues on the basis of the "obviously wrong" test, for reasons which appear, my conclusions would have been no different had I adopted the less stringent test put forward by the Sellers.

Jurisdiction

6. The Buyer submitted that the Court had no jurisdiction to entertain the Sellers' application because the right to appeal had been excluded by the terms of the Arbitration Clause in the Purchase Agreement and the Deed of Indemnity in respect of the sale of the shares in Interlife because it provided for any dispute to be "finally settled by Arbitration in accordance with rules of the Arbitration Institute of the Stockholm Chamber of Commerce". Whilst, as a matter of logic, this point should be determined in priority to any others, it is a point which is not without difficulty, and, as I have come to the conclusion that the application must fail for a number of other reasons, I do not need to decide this issue.

Questions of law

7. Section 69 of the Arbitration Act, insofar as relevant, provides as follows;

"69. – (1) Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings. An agreement to dispense with reasons for the tribunal's award shall be considered an agreement to exclude the court's jurisdiction under this section.

…

(3) Leave to appeal shall be given only if the court is satisfied –

(a) that the determination of the question will substantially affect the rights of one or more of the parties,

(b) that the question is one which the tribunal was asked to determine,

(c) that, on the basis of the findings of fact in the award –

i. the decision of the tribunal on the question is obviously wrong, or

ii. the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and

(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question.

(4) An application for leave to appeal under this section shall identify the question of law to be determined and state the grounds on which it is alleged that leave to appeal should be granted.

(5) The court shall determine an application for leave to appeal under this section without a hearing unless it appears to the court that a hearing is required."

The first 2 questions of law in the Schedule – Issues 1 and 2 in the Award

8. Issues arose between the parties as to the characterisation of an issue as a question of law. The first two questions of law set out in the Schedule to the Application referred to the finding of the Arbitrators of mis-selling of pensions by Interlife and of gross negligence in a large number of individual sample cases, asserting that such findings were based on inferences, referred to in the body of the Award, which no reasonable Arbitrator could have made. The exact terms of the question of law, as set out in the Schedule, bear examination, although I do not set them out here in the body of the judgment.
9. The Sellers maintained in their second set of submissions that the Arbitrators made four crucial errors which they say are errors made in respect of questions of law: -

i) First, it is said that the Arbitrators wrongly decided in the Defendant's favour without any evidence before them from any of the Investors to whom the policies had allegedly been mis-sold, except for two particular Investors. It is said that to find a case of mis-selling in any of the sample cases without hearing from the Investor is wrong in principle and that this is a matter of law because a Court would be compelled to decide as a matter of fairness and justice that there had been no mis-sale.

ii) Secondly, it is argued that the Arbitrators, having correctly stated in paragraph 10.206 of the Award the test to be that "it was not appropriate to sell a personal pension policy to an Investor who appeared at the time of sale to be a "stayer" (over the long-term) in his or her current OPS employment", then applied, from paragraph 10.207 onwards, a different test, namely that a sale would be held to be inappropriate unless there was evidence at the time of sale that the Investor appeared not to be a "stayer". This effectively reversed the burden of proof and this also gave rise to a question of law.

iii) Thirdly, the Sellers maintained that whilst the Arbitrators had considered the question of whether a particular leaflet used in sales interviews (the Choice in Pensions leaflet) itself gave rise to a breach of duty owed to a potential Investor, they failed, having decided that there was no such breach in the leaflet itself, to take it into account in a positive way in deciding whether or not an interview with an Investor did give rise to a mis-sale.

iv) Fourthly, the Arbitrators are criticised because they drew no inference from the fact that the Investor had taken out a personal pension and given up his or her OPS pension. It is said that this fact was evidence from which an inference should be drawn that the Investor was not a "stayer" in his or her OPS employment.

10. In their third set of submissions and orally before me, the Sellers' focus was different. Whilst maintaining that the issues raised were the same, the Sellers formulated the matter as follows: -

"1. Was it, between 1989 and 1992, a breach of the duty of care which a pensions sales representative owed to a potential Investor, who, at the time of sale, was in OPS employment for the representative to sell a personal pension to that Investor, without first being informed by the Investor that the Investor was uncertain about his or her future employment plans (even though, ex hypothesi, the Investor was willing to take out a personal pension, and, in the case of an NHS employee, had read or had read to him or her the Choice in Pensions leaflet, and still wanted to take out a personal pension)? In particular 1.1 is it a requirement of the duty of care that unless there was evidence of such uncertainty at the time of sale there was a breach of the duty of care even in the case of an Investor who had not been a member of his or her OPS for more than two years at the time of sale and 1.2 is it to be (rebuttably) presumed that a 1^st or 2^nd year student nurse is not usually able to be sufficiently uncertain for this purpose?

2. If so, then, during the 1989 – 1992 period, was the breach of the duty of care which a representative owed to a potential Investor one that could fairly be described as a breach of duty so aberrant or exceptional in character as to merit the description "gross negligence", if it was made in a market, which was in itself appropriate, but made to a person in that market who had not given sufficient information to the representative to enable him to know whether or not the Investor intended to stay in his or her OPS employment? Is the test the same in the case of an Investor who (1) is a 1^st or 2^nd year student nurse and/or (2) has not been a member of an OPS for 2 years.

3. If an Investor was given an informed view of the advantages and disadvantages of a personal pension, did the salesman have to do more in order to justify a sale to [1] an Investor who was in OPS employment but at the time of sale had not joined the OPS [2] an Investor who was a member of an OPS but had not been a member for 2 years [3] an Investor who was a member of an OPS and had been for more than 2 years but did not inform the salesman that he/she intended to make a career out of working in the OPS employment?

4. Did the Arbitral Tribunal have before it any of the evidence necessary for it fairly and/or reasonably to make a finding of fact in any sample case that there was a breach of the duty of care and a fortiori the clear and convincing evidence required to prove such an aberrant or exceptional breach of duty as amounted to gross negligence? Did it entertain a view of the facts that could reasonably be entertained, and in particular was it entitled to make the generalisations which it made in Paras 10.218 and 10.221? In particular in the case of an NHS employee could it fairly and/or reasonably make such a finding of fact having regard to its own findings in relation to the Choice in Pensions leaflet and Interlife's sales philosophy? And in every case could it fairly and reasonably make such a finding of fact in the absence of direct evidence from the Investor? Was it fair and/or reasonable for it to entertain the views on the experience and intelligence of 1^st and 2^nd year nurses which it obviously did entertain? Was it fair and/or reasonable for it to find grossly negligent mis-sales on in effect no evidence at all save that a sale had taken place to a young Investor?"

11. These questions can conveniently be summarised in the following manner: -

i) What facts constitute breach of duty or mis-selling?

ii) What facts constitute gross negligence?

iii) What facts justify sales?

iv) What evidence was required for the Arbitrators to find mis-selling or gross negligence?

12. In his oral submissions, Mr. Driscoll Q.C. for the Sellers said that there were essentially two questions, the first of which fell into two parts: -

(i)(a) What is a mis-sale?

(i)(b) What is a grossly negligent mis-sale?

(ii) What does a Court or Arbitrator need by way of facts in order to find a mis-sale or grossly negligent mis-sale?

13. Mr. Driscoll said that his first question in both its forms was a question of law. So far as the first sub-question is concerned, it involved a question of law inasmuch as it involved the issue of the ambit of the duty owed by Interlife to potential Investors. Insofar as the second sub-question was a question of law, it involved delineating the characteristics of "gross negligence" which was a concept of law. With regard to the third question, this raised an issue of law of the kind which arose in the decision in the House of Lords in Edwards v Bairstow [1956] AC 14 and Lord Diplock's reference thereto in the Nema [1982] AC 724 at page 742 B-E.
14. Whilst there was overlap between the different ways in which the Sellers put their case on questions of law, I am unable to see that the issues raised in the first submissions, the issues raised in the second submissions, the issues raised in the third submissions and in oral submissions are all the same. The diffuse and varied nature of what the Sellers put forward is an indication of the difficulties they have in identifying clear questions of law "arising out of" the Award.
15. The Arbitrators set out most of the relevant regulatory framework in which Interlife operated. This consisted of the LAUTRO Rules themselves, a Code of Conduct which appeared as a Schedule to those Rules and Enforcement Bulletins that were issued from time-to-time. LAUTRO members were obliged to comply with the Rules and under Rule 3.4 were obliged to ensure that their representatives complied with the Code of Conduct. Rule 3.11 required the LAUTRO member to maintain records of each transaction under which an investment contract was sold by that member to an Investor and in particular, where an Investor purchased an investment contract on the recommendation of a representative and in connection with that, cancelled or converted another investment contract, to keep a record of the reason for that cancellation or conversion.
16. The Code of Conduct contained a number of principles which could be described as "fair dealing", "know your customer" and "best advice" or "acting in the customers' best interests". The Arbitrators referred to these at paragraphs 8.10 – 8.12 of the Award. The LAUTRO member's representative had to exercise due skill, care and diligence in his business dealings and to deal fairly with Investors. The Code then set out particular ways in which these obligations were to be met and, in the context of "opt-outs" where the Investor took out an investment on the advice of the representative and cancelled an existing investment, required the representative to make a comprehensive study of the Investor's needs and financial resources and to disclose to the Investor all relevant advantages and disadvantages of switching from one investment to another. Advice to switch was not to be given unless the representative held the bona fide belief that it was in the best interest of the Investor to do so. Moreover he had to use his best endeavours to ensure that he recommended only an investment which was suited to the Investor.
17. The Arbitrators at paragraph 10.138 described the duty of the Company representative to exercise due skill care and diligence in his/her business dealings as the contractual equivalent of the Common Law duty owed when giving professional advice. The duty of fair dealing was different insofar as the Arbitrators saw this as directed primarily to whether the representative had dealt fairly in the transaction as a whole and given a fair presentation to the investor.
18. What the Arbitrators did was to examine each of the 222 individual cases of mis-selling and to come to conclusions in relation to them on the material which was presented. In the Award itself they explained their general approach in deciding whether or not there had been a breach of duty on the part of Interlife and did so, as explained in paragraph 10.1, much as if it was the individual investor making the claim and having to establish breach of the principles of fair dealing and best advice. The Arbitrators made it plain throughout that the burden of proof was upon the Buyer to establish that there was a breach of duty in order to show that there was a liability in respect of which the Sellers were obliged to indemnify the Buyer under the Purchase Agreement and Deed of Indemnity.
19. At section 10(B) the Arbitrators set out the key arguments advanced by the parties in the arbitration – "The Young Standard" on the one hand and "The Uncertain Nurse" argument on the other. They referred to the different categories of cases involved in the sample and the different factors which applied to those cases (section 10(C)). At section 10(D) they drew attention to the burden of proof which rested upon the Buyer in showing breaches of the LAUTRO Code and the inferences which the Buyer asked the Arbitrators to draw on what was "more or less incomplete material" in the sample cases. They pointed out that the consequences of the inadequacies in Interlife's record keeping were, to say the least, complex.

Mr Driscoll QC's first question of law- Mis-selling.

20. In the context of the arguments put forward by the Sellers in relation to the first two questions, as set out in the Schedule to the Grounds of Appeal and the first crucial error alleged in their second submissions, paragraphs 10.49 and 10.50 of the Award assume great importance. These read as follows: -

"The Claimants put at the forefront of their arguments the bold submission that the only acceptable evidence of a mis-sale should be the direct oral evidence of the investor concerned. The Arbitral Tribunal rejects that submission. It has no justification in legal principle, and it is wholly impractical to suggest that evidence should be required from over 200 witnesses none of whom would be likely to have clear recollections of such conversations taking place over ten years ago, and whose ability to recollect would inevitably be challenged by the Claimants (as indeed occurred with respect to the two investor-witnesses who did give evidence in the arbitration).

"The Arbitral Tribunal considers that there is no reason to depart from the usual approach that a party is entitled to prove its case by any admissible evidence, direct or circumstantial, and by whatever inferences can properly be drawn from the materials to hand. Given the scale of the sample, the massive amount of documentation produced in the arbitration, and the proliferation of points that have to be assessed, there is every reason to regard the entirety of the material before the Tribunal as potentially legitimate sources for drawing such inferences as may be appropriate. How much weight is to be given to different aspects of that material is another matter".

21. To say that this approach of the Arbitrators was obviously wrong is a bold submission. In my judgment it is not only bold, it is wrong. The Arbitrators recognised that there was a question of what weight was to be given to any material before it, but in principle it is right that the Arbitrators could have regard to any material to show that there was a mis-sale in any particular case. In the context of an arbitration between the Sellers and the Buyer in relation to alleged misdoings by representatives of the Company which had been sold (Interlife), any suggestion that adverse inferences should be drawn against the Buyer from failing to produce such evidence (see Wisniewski v Central Manchester Health Authority [1997] PIQRB 324) is a difficult submission to make with any degree of force for the reasons set out by the Tribunal, let alone any suggestion that the claims of mis-selling could not succeed in the absence of such evidence.
22. As emerges from any examination of the Award, the Tribunal proceeded to examine the evidence before it with great care and, as can be illustrated by the table of contents at the front of the Award, a copy of which is attached hereto, considered what inferences could be drawn from inadequate record keeping, what could be expected from records such as a "Fact Find", which constituted one of the sales documents, and concluded that the individual sales documents, had to be the primary source for deciding what the reasons were for the sale. They rightly inferred that where a reason was recorded for the sale of the pension in question, in circumstances where the representative was obliged to record reasons in order to justify the sale, no reasons other than those which were set forward in the primary sales documents were likely to have been given (see paragraph 10.51, 10.73 and 10.222). That is no more than common sense.
23. The Tribunal had material before it in relation to the "sales pitch" taken by the sale representative in the form of the contemporary documents, namely the Application Form, the "Fact Find" form and the Verification form. In these documents, in accordance with LAUTRO requirements, the representatives set out information about the Investor and the reasons for recommending the purchase of a pension from Interlife, as opposed to participation in the available OPS. The Buyer called only two Investors. The Sellers chose not to call any of the sales representatives to give evidence, with the result that the material before the Arbitrators was essentially limited to the contemporaneous documents, the wider picture revealed by evidence as to the policy of Interlife and its agents (including in particular one agent, Richardsons) and materials which emerged at a later stage when investigations were carried out into mis-selling, when complaints and information were obtained from the Investors.
24. The Arbitrators' approach, as set out in paragraphs 10.49 and 10.50 of the Award involves no error of law and the criticism made does not give rise to any question of law for the purpose of the 1996 Act. The criticism amounts to saying that there was insufficient evidence before the Arbitrators for them to reach the conclusion of mis-selling in the sample cases in which they did arrive at that conclusion. Not only is it not open to the Sellers to contest the finding of fact thus involved by saying that there was no evidence to support it, but it is clear that there was evidence upon which they could properly and reasonably reach that conclusion.
25. The Tribunal were very careful in examining what inferences could and could not properly be drawn from inadequate records, from pensions review documents at a later stage and from "the wider picture" as they described it and the evidence relating to the pattern of sales by particular individuals or particular agents, the use of "catchwords" in the sales documentation, the training methods used by agents and the direct evidence of Ms. Foster and Ms. Harvey of sales interviews and compliance procedures. The Arbitrators examined in detail what the Code of Conduct required at section 10(E) and set out general principles to be applied in non-joiner cases, transfer cases and opt-out cases at section 10(F) – 10(H). The approach to each type of case was different because of the different positions of the investors in each category but what is clear from the Award is that each case had to be judged on its individual facts (see e.g. paragraph 10.60, 10.810, 10.200 10.220 and 10.233). The Tribunal was prepared to set out general principles, guidelines and rules of thumb to show its general approach to such cases but these were not principles of law which they sought to apply but part of their reasoning in arriving at findings of fact. Inferences are no more than common sense conclusions arrived at on the basis of evidence which is accepted as reliable.
26. Whatever the position is with regard to the availability of an appeal from an Arbitration Award on the basis that there is no evidence to support a particular finding or that the finding is one which no Arbitrator properly directing himself on the law could reach, the position in this case is that there was a considerable quantity of material which was available to the Arbitrators to justify the conclusion that mis-selling and breach of the duties set out in the Code of Conduct had taken place. On a detailed examination of the Award as a whole, there is simply no room for the suggestion that the terms of the Award show that any of the findings of mis-selling in any of the 222 individual cases were ones which no Arbitrator, properly directing himself could reach or that any one of them was reached on the basis of a mis-direction in law or without any evidence to support it.
27. The essence of the complaint advanced by the Sellers in relation to mis-selling is that they dislike the Arbitrators findings of fact – namely that there were breaches of duty in some of the 222 cases, most notably in the opt-out cases as opposed to the non-joiner cases. On a proper reading of the Award as a whole and not taking individual paragraphs in isolation, as the Sellers did in argument, there is in reality no question of law which arises out of the Award which the Court could decide. The abstract nature of the questions which were posed by Mr. Driscoll in argument illustrate this and the attempt to create issues in relation to the Arbitrators' indications of their approach in relation to the two-year point (paragraphs 10.214) and the "Stayer/non-Stayer" points at paragraphs 10.21, 10.22, 10.73. 10.175, 10.77 – 8, 10.185 and 10.206 – 207 of the Award fail to recognise that these were merely part of the process by which the Arbitrators reached findings of fact and explained those findings without constituting principles of law which were applied. They do not give rise to questions of law which arise out of the Award at all.
28. As to the second criticism in the second submissions, it is abundantly clear that the Arbitrators applied the appropriate test and burden of proof. They required the Buyer to show in each individual sample case that it was not appropriate to sell a personal pension policy to an Investor, whether or not that person appeared at the time of the sale to be a "stayer" over the long-term in his current OPS employment. At no stage did they adopt a different test. At paragraph 10.126 and 10.127 they made the important point that, on the evidence, most student nurses would go on to make their careers in the NHS, most qualified nurses in the NHS would remain there and that as the NHS was the largest employer of nurses in the country, most individuals pursuing a career in nursing would be likely to do so at least predominantly within the NHS. The Arbitrators considered that those general considerations were relevant in evaluating whether best advice was given. The Sellers accept the Arbitrators' approach in paragraph 10.206 that it was not generally appropriate to advise a young Investor to opt out from a sound OPS scheme if he/she appeared to be a "stayer" and that in broad terms the question was whether the Investor appeared to be a "stayer" over the long-term.
29. In paragraph 10.207, the Arbitrators then said that the general observations they had previously made pointed to the conclusion that in assessing whether opt out advice was appropriately given to a young Investor, there were two questions which might have to be considered. The first was whether what the Investor had to say about his or her future plans could reasonably have afforded a sufficient basis for concluding that the individual did not appear to be a "stayer" in OPS employment. The second was whether the Investor may have made an informed choice for legitimate reasons in switching from OPS membership to a private pension.
30. There was no reversal of the burden of proof because the Arbitrators found that the vast majority of nurses did stay with the NHS which was the predominant employer of nurses and therefore there had, in practice, to be some reason to think that a nurse was likely to be a "non-stayer". In reality therefore what the Arbitrators were doing was to evaluate the evidence in considering those two questions and arriving at conclusions as to whether or not the Buyer had satisfied the burden of proof in establishing the inappropriateness of the relevant sale of a personal pension policy. There is no question of reversal of the legal burden of proof- at most the evidential burden shifted in some cases as a result of the Arbitrator's findings of fact. The Arbitrators were clear throughout that the ultimate burden of proof rested upon the Buyer to show a breach of duty by Interlife.
31. In the context of the "Stayer/non-Stayer" argument, the Arbitrators found that statistically the vast majority of nurses made their career in the NHS. They also found that for a nurse who pursued a NHS career, the NHS scheme was "hard to beat". The "Stayer/non-Stayer" approach was effectively accepted by the Sellers (paragraph 10.206) and in circumstances where the Interlife representative was under a duty to make a comprehensive study of the pros and cons of opting out, advise the taking of action in the best interest of the investor and to record the reasons for any investment, the Arbitrators rightly, as a matter of evidence, pointed out the need for the representative to know of the investor's future plans and whether he/she was likely to be a "Stayer" in the NHS or equivalent OPS employment. Since most nurses stayed in the NHS there had to be some reason for thinking that the nurse would not stay, if the individual was to be treated on that footing. The second crucial error relied on by the Sellers is no error at all.
32. As to the third crucial error in their second submissions, the Sellers' criticism amounted to saying that the Arbitrators failed to take into account one particular piece of evidence in the context of all the material which they considered. Whether or not this is a justified criticism is neither here nor there in the context of leave to appeal which only arises on a question of law arising out of the Award. It is for the Arbitrators to weigh the evidence. In fact the point is baseless, inasmuch as the issue before the Arbitrators was whether or not there had been mis-selling in interviews which had been conducted where the application of the Choice of Pensions leaflet material to the individual case depended upon what was said by the representative to the investor. The fact that the use of the leaflet was not in itself negligent and that the leaflet in itself was not unfair does not mean that any interview in which it was used must have been fair. The point made by the Sellers is a non sequitur.
33. As to the fourth crucial error in the second submissions, once again, at best, the point raised by the Sellers is a point on the weight to be given to one particular piece of evidence which the Arbitrators had to consider in making findings of fact. Further, the argument is entirely circular. The fact that an individual investor took out a personal pension and gave up the OPS Pension does not mean that any inference can be drawn that the investor would not be a "Stayer" in the OPS employment. It is hard to see how any inference could be drawn from the fact that an investor had taken out a personal pension plan and given up an OPS pension because the very question which the Tribunal had to decide was whether or not inappropriate advice had been given to do that. The Tribunal was free to conclude that improper advice had been given. No question of law arises out of the Award in respect of it and the Defendants rightly characterised the submission as no more than a "bootstraps" argument.

Mr Driscoll's First Question of law- Gross Negligence

34. As to the issue of gross negligence, there is little to be said because the Arbitrators treated this as a question of fact in relation to each individual sample case, applying the "jury test" to which Mance J referred in The Hellespont Ardent [1997] 2 Lloyds Report 547 – see paragraphs 11.25 and 11.29 of the Award. No criticism is made of the test as such and in reality no separate argument was advanced orally by Mr. Driscoll in relation to this whilst maintaining that, if he was right in relation to questions of law about mis-selling, he must also be right in relation to questions of law in relation to gross negligence.

Mr Driscoll QC's second question of law- Findings without the necessary Evidence

35. With regard to the second supposed question of law in relation to the evidence required to find a mis-sale, the problem with the Edwards v Bairstow approach is that the terms of section 69 (3)(c) of the 1996 Arbitration Act has changed the position from that which previously obtained. Leave to appeal is only to be given if the Court is satisfied "that on the basis of the findings of fact in the Award" the decision of the Tribunal on the question of law which arises out of the Award is obviously wrong or, if the question is one of general public importance, is at least open to serious doubt. There is no room for any appeal under section 69 against the findings of fact in the Award itself since these have to be accepted for the purpose of any application for permission to appeal.
36. The legislative intent behind the form of words used in the Act was made clear in the DAC Report of 1996 at paragraph 286 (iii) in the following words: -

"There have been attempts, both before and after the enactment of the Arbitration Act 1979, to dress up questions of fact as questions of law and by that means to seek an appeal on the Tribunal's decision on the facts. Generally, these attempts have been resisted by the Courts but to make the position clear, we propose to state expressly that consideration by the Court of the suggested question of law is made on the basis of the findings of fact in the award."

37. Furthermore, section 34 (2)(f) of the 1996 Act, under the heading of "Procedural and Evidential Matters" provides that it is for the Tribunal to decide all procedural and evidential matters which include "whether to apply strict rules of evidence (or any other rules) as to the admissibility, relevance or weight of any material (oral, written or other) sought to be tendered on any matters of fact or opinion and the time, manner and form in which such material should be exchanged and presented." Although there is no suggestion that the Arbitrators made any specific ruling in relation to relaxation of rules of evidence, and there is some insistence in the award on the need for convincing evidence if gross negligence is to be found, the DAC Report at paragraph 170 throws light on the provision in stating that "Clause 34 (2)(f) helps to put an end to any arguments that it is a question of law whether there is material to support a fact".
38. In the Baleares [1993] 1 Lloyd's Report 215 at page 232 column 1, Steyn LJ stated that an appeal on the Edwards v Bairstow principle did not constitute an appeal on a point of law under the Arbitration Act of 1979. Whilst there was some debate about this position under the 1979 Act because of the decision of Millett J in Capital & Counties PLC v Hawa [1991] 2 EGLR 133, in my judgment it is clear from the terms of the 1996 Act itself that there is no room for an appeal on this basis under that Act.
39. The leading text books on Arbitration are unanimous in saying that it is not open to a party to an arbitration to appeal on the basis that the question whether the Tribunal was right to find a fact on the basis of the evidential material before it is a question of law. The parties have chosen the tribunal which is to decide the facts and its conclusions cannot be questioned.
40. Mustill and Boyd on Commercial Arbitration 2^nd ed., 2001 Companion states at p. 357: -

"The guidelines for granting leave to appeal derived from the decision in the House of Lords in The Nema [1981] 2 Lloyd's Reports 239 are now set out in the Act itself: subsection 69(3)(c). They are that (i) the decision of the tribunal is at least open to serious doubt: subsection 69(3)(c). This must be demonstrated on the basis of findings of fact in the award: one effect of this is that it is now clearly impossible to challenge the findings of fact in an award on the ground that there was no evidence to support them. (Even under the old law this kind of challenge was strongly discouraged…"

41. Russell on Arbitration 22^nd Ed. At pp. 394 – 5 states: -

"The tribunal's findings of fact are conclusive…the parties will not be allowed to circumvent the rule that the tribunal's findings of fact are conclusive by alleging that they are inconsistent, or that they constitute a serious irregularity, or an excess of jurisdiction, or on the basis that there was insufficient evidence to support the findings in question. Consequently, the argument that it is a question of law whether there is material to support a finding of fact is no longer available. (This is a consequence of s.34 (2)(f) of the Arbitration Act 1996 (see the DAC report Para. 170)."

42. Merkin on Arbitration Law, 2004 deals with the position in more detail at Paras. 15.42 to 15.44 and 21.9 to 21.11. In essence, he states that, whilst it is now clear that an award cannot be challenged on the basis that there was insufficient evidence to support the arbitrator's factual findings, it may be possible to challenge it on the basis that there was no evidence at all (which could not be alleged in this case, where it is said that the evidence there was did not justify the inferences drawn).
43. I have been referred to Guardcliffe Properties Limited v City & St. James [2003] 2 EGLR 16 in which Etherton J expressed the view, obiter, that an error of law within the Edwards v Bairstow principle could be an error of law under section 69 of the 1996 Act. He relied upon the earlier decision of Millett J and considered a decision of Evans Lombe J in Secretary of State for the Environment v Reed International [1994] 1 EGLR 22 as decided per incuriam, in ignorance of Millett J's decision. I regret that I am unable to agree with him and respectfully note that the point does not appear to have been argued before him by reference to the opening words of s 69(3) (c), nor to the wording of the DAC report. The learned judge did not have, in the event, to consider the scope of section 69 because the challenge under section 68 succeeded, but he drew no distinction between the 1979 Act and the 1996 Act, whereas the terms of section 1(2) of the earlier Act do not include the words to which I have drawn attention with which section 69 (3)(c) commences. For the same reasons I disagree with the decision of HH Judge Thornton QC in Fence Gate Ltd v NEL Construction Ltd [2001] 82 Con LR 41.
44. Under the terms of the 1996 Act therefore Steyn LJ's dictum in relation to Arbitrations under the 1979 Arbitration Act, with which Neill LJ was impressed, without agreeing, takes full force and effect.
45. In the same decision, Steyn LJ, at page 228 said: -

"The Arbitrators are the masters of the facts. On an appeal the Court must decide any question of law arising from an Award on the basis of a full and unqualified acceptance of the findings of facts of the Arbitrators. It is irrelevant whether the Court considers those findings of fact to be right or wrong. It also does not matter how obvious a mistake by the Arbitrators on the issues of fact might be, or what the scale of the financial consequences of the mistake of fact might be. That is of course an unsurprising position. After all, the very reason why parties conclude an arbitration agreement is because they do not wish to litigate in the Courts. Parties who submit their disputes to arbitration bind themselves by agreement to honour the Arbitrator's Award on the facts. The principle of party autonomy decrees that a Court ought never to question the Arbitrator's findings of fact."

Conclusions on the First 2 Questions of law in the Schedule or elsewhere.

46. On analysis, in my judgment, it is clear that each of the first two grounds put forward in the Grounds of Appeal, each of the "four crucial errors" in the Second set of Submissions, the four questions of law set out in the Skeleton (Third submissions) and the two/three questions raised by Mr Driscoll QC in oral argument are all issues which arise in relation to the Arbitrators' findings of fact and fall foul of the principles enunciated by Steyn LJ, being findings of fact made on the evidence which was before them.
47. For these reasons the first and second Orders sought which relate to the first and second issues decided by the Arbitrators give rise to no question of law for the Court to decide under section 69 of the Arbitration Act 1996. They do not therefore give rise to any relevant question of law for the purpose of the 1996 Arbitration Act. Not only is it not now open to appeal an Arbitration Award under the 1996 Act on the basis that there is no evidence to support a finding, but there was in this Arbitration evidence upon which the Arbitrators could and did come to their conclusions about mis- selling and gross negligence.
48. This is not a case where it is said that there is no evidence to support the findings made but it is said that there is insufficient evidence or an absence of a particular form of evidence or other contrary evidence which means that such findings are not justified. The challenge is plainly to the findings of fact, to which the conclusions of law, as to breach and "gross negligence" relate. Such an approach is impermissible under the Act where there was a basis for the Arbitrators' findings which can plainly be seen in the extensive and thoughtful consideration they gave to the issues. The sample cases were looked at individually and decisions were made in relation to the available material in respect of each, in order to decide whether or not there was evidence to support the Buyer's case, whether it be of mis-selling or gross negligence. There is no way in which this Court will interfere with the findings of fact made in those respects.

The Remaining Questions of law- Issues 3,6,7,10 and 11 of the Award

49. In contrast to the first and second supposed questions of law, the third, fourth, sixth and seventh questions raised are matters of construction of the Purchase Agreement and the Deed of Indemnity. The fifth ground relates to the Tribunal's decision that it was "not open to the Claimant to complain" about the lack of details given in notification to them by the Buyer under the Purchase Agreement and/or Deed of Indemnity. It is said that the Arbitrators reached a conclusion that must be wrong and failed to make it clear whether they were relying upon a form of election or estoppel. It is accepted that this point does not matter if the Arbitrators were right in their construction of the notification provisions in the two documents, which arise in relation to the fourth ground and the sixth issue decided by the Arbitrators.
50. I turn then to the questions of construction.
51. In the witness statement of Mr. Clark submitted in support of the application for permission to appeal no evidence was put forward to suggest that there were matters of public importance involved in any of the construction issues. In paragraph 23 of that statement the submission was made that the decision of the Arbitrators on the issues raised was "obviously wrong" for the reasons given in the claim form. That was also the test adopted in the claim form insofar as any test was put forward at all other than an assertion that the Arbitrators were wrong.
52. Whilst the mis-selling of private pensions following the Social Security Act 1986 which opened up the market and the Financial Services Act of 1986 (effective from 29^th April) which required self regulation of those permitted to sell such pensions, was a matter of considerable public interest in the 1990's, it is not suggested that the form of words used in the Purchase Agreement or the Deed of Indemnity take a common form or that questions of construction which arise here will arise elsewhere. The appropriate test is therefore the test of "obviously wrong" in section 69 (3)(c)(i). Nonetheless my conclusions would be no different if the less stringent test was applicable.

The Third Question – Issue 3 in the Award

53. The Sellers maintain that the expression "any law, Regulation or Order" in Clause 2.01 of the Deed of Indemnity does not extend to a breach of the LAUTRO Rules or Code of Conduct. The Arbitrators dealt with this matter very briefly in paragraph 12.01 – 12.10, having set out the terms of Clause 2.01 at paragraph 6.16. So far as relevant, it provided that: -

"The Sellers shall fully indemnify, defend and hold the Buyer harmless from and against any demands, claims, actions, liabilities, assessments, losses, damages, fines, penalties, costs and expenses…(hereinafter referred to as Losses) that the Buyer or Company…may incur or suffer at any time resulting from or otherwise related to: -

(I) The failure prior to the Closing of the company to comply with any law Regulation or Order applicable to the Company in connection with or with respect to the assets or operations of the company."

54. The Arbitrators set out the parties' respective contentions and agreed with the Buyer in saying that breaches of the LAUTRO Rules which gave rise to "Losses" within the meaning of Clause 2.01 were failures to comply with Regulations. The Arbitrators found, and I agree, that the words "Rules" and "Regulations" are virtually interchangeable and that it is plain that the parties intended to cover liabilities arising from breaches of Regulations applicable to the Company, the principal Regulations being those set out in the LAUTRO Rules. As the Buyer pointed out, it was hard to see what other Regulations the parties had in mind if it were not the LAUTRO Rules which bound any company authorised to sell pensions.
55. My attention was drawn to the decision of Rix J in J Rothschild Assurance v Collyear [1999] LRIR 6 at page 13 where he described the operations of SIB and of SRO's and the enforcement of their respective rules, together with the rights or remedies which were given to private Investors who had suffered loss as a result of contravention of such rules under section 62 and 62 (A). I agree that the position is, as the Arbitrators remarked, reinforced by section 62 (2) of the Financial Services Act 1986 which provided a statutory foundation for the investors' claims giving them a remedy for breach of the Rules.
56. The Arbitrators were not obviously wrong in their reasoning. In my judgment they were plainly right.

The Fourth question - Issue 6 in the Award

57. This issue relates to the contractual provisions relating to the notification to be given under section 3.03 (d) of the Deed of Indemnity and/or section 10.03 of the Purchase Agreement. The Arbitrators dealt with the question of notification at section 15 of the Award in 76 subparagraphs which occupy twenty-two pages. The key provisions however are as follows: -

i) Section 3.03 (d) of the Deed provides: -

"The Sellers shall have no liability with respect to any Losses unless the Buyer shall have notified the Sellers of the Losses within five years from the date of this Deed and any Losses which shall have been notified on or prior to such date may continue to be asserted until resolved…"

ii) Section 10.03 (d) of the Agreement contains similar terms: -

"None of the parties hereto shall have any liability for any breach of any of the representations contained in this Agreement unless the non-breaching party shall have notified the breaching party of the Claim within five years from the date of this Agreement and any Claim which shall have been notified on or prior to such date may continue to be asserted until resolved."

58. It was common ground that the purpose of these notice provisions was to bring in an element of finality between the parties in respect of Claims and Losses where the Sellers might be liable to indemnify the Buyer.
59. The Arbitrators decided that Clause 3.03 (d) of the Deed required the Buyer to notify the Sellers of the events falling within the definition of "Losses" within five years at the risk of the Sellers' liability in respect of such Losses being excluded.

i) Under Clause 2.01 of the Deed, an individual claim made by an investor would constitute a "Loss" within the Clause so that if notice had been given of that claim within the five-year time limit an indemnity was available in respect of it under the Deed, if other conditions were met.

ii) Equally the Arbitrators concluded that where no claim had been made by an investor but a decision had been made by Interlife that there had been a mis-sale and it was ultimately found that there was such liability, the acceptance of that liability by Interlife meant that there was a liability within the meaning of Clause 2.01 which amounted to a "Loss" for the purposes of that Clause. It did not matter that the liability, accepted by Interlife or the Buyer at that stage, as between themselves and the Investor was only established to be a true liability at the arbitration itself, as between the Sellers and the Buyer.

60. As a matter of construction of the word "Losses", I consider that the Arbitrators were plainly right in this.
61. The Buyer pointed out that there is a marked contrast between the detailed terms for the notification of claims in Clause 10.02 of the Purchase Agreement and Clause 3.01 and 3.02 of the Deed on the one hand and the terms of the cut off Clauses which I have just set out. The latter simply refer to notification of the Loss or the Claim as the case may be. Both Clause 10.02 of the Purchase Agreement and Clauses 3.01 and 3.02 of the Deed related to the giving of notices for the purpose of defending any third party claim- a different purpose from the giving of notice in order to avoid a cut-off of Sellers' liability.
62. In their earlier Provisional Answers to Preliminary Issues, the Arbitrators found that Clause 3.03(d) of the Deed was effectively "decoupled" from Clauses 3.01 and 3.02 so that breach of the latter, which were held by them to be innominate terms, would sound only in damages and would not amount to a bar upon pursuit of the claim for an indemnity.
63. The difference between the terminology of Clause 3.03(d) of the Deed which refers to a cut- off if "Losses" are not notified within the prescribed time limit and Clause 3.01 and 3.02 of the Purchase Agreement which refer to a notice of a third party claim and defence of it is striking. The Arbitrators' conclusion on construction as expressed in its Provisional Answers and in the Award is, in my judgment, right.
64. Clause 10.02 of the Purchase Agreement provided, under the heading "Notice and Defence of Claim" for the non-breaching party to notify the breaching party in writing as soon as practicable after the non-breaching party had obtained knowledge of the facts constituting the basis for any Claim. The notice was to specify all facts known to the non-breaching party giving rise to the Claim and the amount or an estimate of the amount of the liability arising there from. Further provisions followed, obliging the party not in breach not to admit liability or settle any Claim without reference to the party in breach and for the party in breach to take over the claim if it so wished. The parties were under a duty to co-operate in relation to any such claim.
65. Here the Arbitrators found that a Claim under Clause 10.03, which was a Claim by the Buyer against the Sellers for breach of warranty or representation under the Purchase Agreement had to be a Claim which complied with the requirements of Clause 10.02 and proceeded in the Award to examine the correspondence to see if there had been compliance, as a matter of fact.
66. The Sellers submissions in support of their application for leave to appeal are all directed at the absence of particularity of the notification within five years which could prevent the operation of the cut off under the Deed as well as the Purchase Agreement.
67. The Arbitrators conducted a detailed examination of the correspondence which had passed between the parties and the notifications given thereby. The only paragraphs which were challenged by the Sellers in their grounds for appeal in relation to the Deed were paragraphs 15.47 – 15.50. At paragraph 15.47, the Arbitrators concluded that by the two letters of 28^th August 1997 and 27^th January 1998, the Buyer's lawyers had given sufficient notice, for the purpose of the Deed, in respect of all the cases which were comprised within the figures set out in those letters, although no details of those cases were set out. In the correspondence which had passed between the parties, it had been made clear that the Buyer was going to have to compensate a large number of Investors in respect of alleged mis-sales and that in compensating Investors it would follow PIA guidelines. It was made clear that the expected losses would exceed the unpaid balance of the purchase price and notice of increasing reserves in respect of such liabilities was given from time-to-time. In short, the Buyer was saying that Interlife expected to pay and intended to pay compensation to those identified in the first, second and third priority categories identified to the PIA and in the non-priority category. The Arbitrators concluded that this was good enough for the purpose of section 3.03 (d) of the Deed.
68. Equally the Arbitrators found that in the course of correspondence culminating in the letter of 28^th August 1997 the Buyer was clearly notifying the Sellers that it was pursuing a Claim against them for breach of representation or warranty contained in Clause 7.06 of the Purchase Agreement, that being the Claim to which Clause 10.03 (d) referred. The Arbitrators then examined the terms of section 10.02 which set out the details the notice required in respect of timing and content. The notification had to be given "as soon as practicable after the non-breaching party has obtained knowledge of the facts constituting the basis of the claim" so that what governs the timing of the notice was the time at which the Buyer became aware of facts sufficient to found a claim for breach of representation or warranty. The Arbitrators found that there was no basis upon which they could conclude that the Buyer had delayed in advancing a claim against the Sellers after it realised that there were sufficient grounds to do so. Furthermore, so far as content of the notification was concerned, the Buyer could only give details of the facts of which it was aware at the relevant time in circumstances where Clause 10.02 envisaged the possibility that the non-breaching party might have sufficient knowledge to ground a claim but was not aware of the amount of the liability and could therefore only give an estimate thereof.
69. The Arbitrators found that sufficient notice was given in the letter of 3^rd June 1994 of the Claim under the Purchase Agreement for breach of Clause 7.06, namely the representation and warranty that the company had in all material respects complied with any relevant Regulation or code of practice in relation to its business in the United Kingdom. That letter stated in clear terms that there had been non-compliance with applicable laws, Regulations and Practices in connection with the selling of insurance policies although it was not yet possible to determine the final numbers and that Interlife was going to suffer substantial losses, although it was not then possible to estimate the cost of reinstatement at that point. A contingency reserve was mentioned at £1,350,000 but the Buyer stated that it would provide an estimate after publication of SIB's Reports.
70. The Arbitrators found that it was hard to see what further information could have been provided at that stage and none indeed was sought by the Sellers. The Sellers did not reply for three and a half months and even then their only complaint was of alleged over-compensation of Investors. Regular updates and details of the scheme of compensation were provided thereafter and the Tribunal between paragraphs 15.60 and 15.69 set out the exchanges between the parties including any request made by the Sellers and the answers given by the Buyer including in particular the invitation to examine all the files which was in reality the only practical way in which the Sellers could have come to grips with the details of the claims.
71. At paragraphs 15.70 – 15.76, the Arbitrators also concluded that in a case such as the present which involved a consistent course of conduct whereby Interlife sold pensions in a manner which was in breach of LAUTRO Rules, the Buyer's Claim against the Sellers for breach of the representation/warranty in section 7.06 of the Purchase Agreement constituted or could be treated as constituting a single claim for breach of the relevant representation/warranty and that therefore there was no need to give notice in relation to each and every individual Investors claim.
72. In those circumstances the Arbitrators concluded that there had been adequate notification for the purpose of Clause 7.06 of the Purchase Agreement.
73. The Arbitrators' construction of the different terms of the Deed and the Purchase Agreement is not obviously wrong and the findings as to compliant notice, after examining the correspondence in detail, reveal no error of principle and constitute findings of fact so that no question of law arises at all in relation to the findings of actual notice, let alone one where the Arbitrators are obviously wrong.

The Fifth Question – Issue 7 in the Award

74. In such circumstances, the 5^th ground and 7^th Issue in the Award do not arise, so that any decision would not substantially affect the rights of the parties.

The 6^th question – issue 10 in the Award

75. This issue is again one of construction arising out of Article VII of the Purchase Agreement and in particular the part which reads: -

"The Sellers shall not be deemed to be in breach of any representations or warranty contained in this Article VII with respect to any matter disclosed in this Agreement, including the Schedules hereto or in the Disclosure Letter…"

76. Schedule 7.15 to the Agreement, under the heading "Litigation and other Disputes" listed "the LAUTRO Proceedings" and "the Watsons Review", "(both referred to elsewhere)". The LAUTRO Proceedings were defined in the Purchase Agreement as a particular set of Proceedings initiated by and pending before LAUTRO, being case number 11 of 92.
77. The disclosure letter, as the Arbitrators remark, is unusual insofar as it appears to disclose nothing additional to the Schedules but in paragraph 1.04 the following appears: -

"Where brief particulars only of a matter are set out or referred to in this letter, or a document is referred to herein but not attached, or a reference is made to a particular part only of such document, full particulars of the matter and the full contents of the document are deemed to be disclosed and it is assumed that the Purchaser does not require and (sic) further details."

78. The Sellers maintained before the Arbitrators and before this Court that the effect was to disclose the fact of mis-selling in all its variant forms as revealed by the LAUTRO Report in those LAUTRO proceedings even though the proceedings related to a specific number of individual cases (which may overlap with some of the sample cases) (the wider construction), so as to bar all claims for indemnity for mis-selling, whereas the Buyer maintained that the disclosure was limited to the proceedings themselves and their direct or immediate consequences such as fines or penalties resulting from them (the narrow construction).
79. In Clause 1.02 (b) of the Purchase Agreement, it was provided that "all warranties and representations of the Sellers herein shall be subject to the LAUTRO Proceedings and any fines, penalties or costs payable under or as a result of such proceedings."
80. The Arbitrators summarised the issue of construction at paragraph 19.11 of the Award and then proceeded to deal with the "deeming exception" in Article VII of the Purchase Agreement as an exemption clause which had to be construed strictly against the party for whose benefit it was included in the Agreement and by whom purported reliance upon it was placed. They found it was not sufficiently clear to exclude all the Sellers' prima facie liability for the mis-selling which was the subject matter of the Buyer's counterclaim and that the narrower construction had therefore to apply. They found that this was consistent with Clause 1.02 and/or 7.06 (1) of the Agreement in relation to the "results of the review to be carried out" by Watsons.
81. Moreover, such a construction is consistent with the terms of the Deed. In Clause 3.03 (c)(4), the Sellers are to have no liability with respect to any Losses "which have been disclosed in any Schedules to the Purchase Agreement, except as regards the LAUTRO Proceedings", thus creating an exception to the exclusion of liability for that which was disclosed. In Clause 3.04 (2), it is provided that the Sellers shall be fully liable with regard to Losses "arising in connection with the LAUTRO Proceedings, including any penalties, fines and LAUTRO fees and attorney's fees payable in connection therewith". If both of these provisions are given the narrow construction, it makes sense for the similar provisions in the Purchase Agreement also to be given a narrow construction. If however the provisions of Article VII of the Purchase Agreement are given a wide construction, Clause 3.03 (c)(4) might equally be given such a wide construction thus presenting an exception to the exclusion of liability for that which had been disclosed in the Schedules to the Purchase Agreement.
82. Whilst the Arbitrators have made it plain, and it is clear from any detailed examination of the provisions of the Purchase Agreement and the Deed, that the documents are ill drafted, the Arbitrators' conclusions makes sense of the provisions and, in my judgment, their construction cannot be said to be obviously wrong.

The 7^th question – issue 11 in the Award

83. This raises a short question of construction of Clause 3.03
    (c)(2) of the Deed. This provides that "the Sellers shall have no liability with respect to any…Losses…arising in consequence of any voluntary transaction carried out by the Company after the Closing".
84. The Arbitrators dealt with this question at paragraph 20.01 – 20.16 of the Award. The Sellers argued that the "Losses" which the Buyer sought to recover in the arbitration did not arise out of any breach of warranty or indeed any request made by LAUTRO or any complaint of significance under the LAUTRO Rules. The compensation paid to its investors was a result of requirements imposed by the PIA and it was the Buyer's decision that Interlife should apply in 1994 for membership in the PIA. It was the result of Interlife's voluntary membership of the PIA that exposed it to a greater liability than under the LAUTRO Rules.
85. At paragraph 20.07, the Arbitrators decided that Interlife's application to join the PIA was not aptly described as a "transaction" even if, as the Arbitrators accept was the case, membership created a contractual relationship between Interlife and the PIA. Their conclusion that the word "transaction" was more apt to describe some form of commercial engagement is beyond challenge. Moreover, they pointed out that the purpose of section 3.03 (c)(2) is clear, namely to limit the application of the Deed to Losses, whether "claims" "liabilities" or otherwise, arising out of commercial engagements entered into before Closing and to exclude Losses arising from commercial engagements entered into thereafter.
86. I cannot see that it can properly be said that the Arbitrator's conclusion on construction of the words "voluntary transaction" is obviously wrong.

Conclusion

87. For all these reasons the Sellers' application for leave to appeal fails and must be dismissed with costs, subject to any peculiarities arising on this issue on which the parties can address me.