Jersey Unreported Judgments

Arbitration- appeal against decision of the Deputy Bailiff dated 8th January, 2016.

[2016]JRC081A

Royal Court

(Samedi)

13 April 2016

Before     :		T. J. Le Cocq, Esq., Deputy Bailiff, sitting alone
Between	Public of the Island of Jersey		Applicant
And	Jersey Electricity Company		Respondent

Advocate J. M. Dann for the Applicant.

Advocate M. W. Cook for the Respondent.

judgment

the deputy bailiff:

1.        This is an application brought by the Jersey Electricity Company ("JE") concerning an appeal against my judgment of 8^th January, 2016, Public of the Island of Jersey-v-Jersey Electricity Company [2016] JRC 006 ("the Judgment") in which I granted leave to the Public of the Island of Jersey ("the Public") to appeal against an arbitration award made by Mr Stephen Downham on 24^th July, 2015, ("the Downham Award").  

2.        In the Judgment I decided, firstly, that a provision in the lease between the Public and JE which contained an exclusion provision preventing an appeal to the Royal Court was not applicable.  Secondly, on usual principles, I gave the Public leave to appeal against the Downham Award. 

3.        The present application is restricted to the first part of the Judgment.  In other words JE wish to appeal on the basis that there was an effective exclusion clause and therefore that the Public cannot appeal.  JE do not wish to appeal on the basis that the Public should not have been granted leave if there were no effective exclusion clause. 

4.        Article 21(7) of the Arbitration (Jersey) Law 1998 ("the 1998 Law") is in the following terms:-

"No appeal shall lie to the Court of Appeal from a decision of the Court on an appeal under this Article unless -

(a)       the Court or the Court of Appeal grants leave; and

(b)       it is certified by the Court that the question of law to which its decision relates either is one of general public importance or is one which for some other special reason should be considered by the Court of Appeal."

5.        This application is somewhat unusual as JE does not in fact immediately apply for leave to appeal.  It applies for leave only if, on a proper construction of Article 21 of the 1998 Law, leave is required.  JE does not believe that such leave is required. 

6.        Advocate Cook, for JE, argues that Article 21(7) does not apply in the circumstances.  There has been no "decision of the Court on an appeal under the Article" because the Judgment was a decision on leave to appeal and not a decision on the appeal itself.  Whilst he does not therefore formally ask for leave, if I am not with him in his argument, he submits that, if leave is needed, it should be granted under Article 21(7)(b) because a decision on the applicability of the exclusion clause is one of general public importance or is one which for some other special reason should be considered by the Court of Appeal. 

7.        JE further argue that the Judgment, in so far as it related to the exclusion clause, amounts to a final determination of the question of leave to appeal against the Downham Award and, if leave to appeal to the Court of Appeal were necessary but not granted, leaves open the question of whether or not I was right in the Judgment on that aspect.  Advocate Cook points out that there will be future rent reviews and therefore there is an ongoing relevance to the matter and, further, his client is now faced with a full Royal Court arbitration appeal which, if my decision on the exclusion clause is wrong, they should not be faced with. 

8.        Advocate Dann, for the Public, argues that the issues before me are whether or not leave is needed and, if so, what the test for that leave should be.  He argues that Article 21(7) applies to the Judgment.  He argues that the Judgment clearly does fall within the description of "a decision of the Court on an appeal" as it does not matter whether the decision is one of whether or not leave should be granted or the final determination by the Royal Court of the arbitration question.  They are both, so Advocate Dann would argue, decisions of the Royal Court "on an appeal under this Article". 

9.        The first question for me is, therefore, whether or not the Judgment was a decision within the terms of Article 21 of the 1998 Law. 

10.      Article 21(2) of the 1998 Law provides:-

"Subject to paragraph (3), an appeal shall lie to the Court on any question of law arising out of an award made on an arbitration agreement; and on the determination of such an appeal the Court may -

(a)       confirm, vary or set aside the award; or

(b)       remit the award to the reconsideration of the arbitrator...."

11.      Article 21(3) limits that more general permissive statement and is in the following terms:-

"An appeal under this Article may be brought by any of the parties to the reference -

(a)       with the consent of all the other parties to the reference; or

(b)       subject to Article 23, with the leave of the Court."

12.      Article 21(4) indicates that the Court should not grant leave under Article 21(3)(b) unless it considers that, having regard to all the circumstances, the determination of the question of law concerned "could substantially affect the rights of one or more of the parties to the arbitration agreement...".  Article 23 of the 1998 Law sets out the restrictions on any appeals if the parties have entered into an exclusion agreement. 

13.      I have not found this an easy point of construction.  In my judgment, however, the better view is that the application for leave to appeal against the Downham award gave rise to a decision of the Royal Court on an appeal and accordingly it is a decision in respect of which leave is required for a further appeal to the Court of Appeal.  

14.      Were I to be wrong on this, however, it seems to me that a decision on the matter of leave to appeal, particularly when leave has been granted, is otherwise preliminary or interlocutory in nature and leave would be required for a further appeal to the Court of Appeal in any event. 

15.      Having decided that leave is required, the next question is to consider the test for the grant of leave to appeal. 

16.      Neither counsel suggested that the test applicable in determining whether or not I should grant leave to appeal against the Judgment is other than that set out in Article 21(7)(b) of the 1998 Law.  Because I have not been addressed on other applicable principles arising out of the general jurisdiction to grant leave to appeal against interlocutory non-final determinations and as in my view this application does fall within Article 21(7) I have restricted my consideration to those matters.  Nor have I been addressed in detail on the basis for the suggestion that the Judgment was erroneous and therefore I do not express any view on that question. 

17.      Article 21(7) is in very similar terms to the provisions of Section 17 of the Arbitration Act 1979 ("the 1979 Act") which is in the following terms:-

"No appeal shall lie to the Court of Appeal from a decision of the High Court on an appeal under this Section unless -

(a)       the High Court or the Court of Appeal gives leave; and

(b)       it is certified by the High Court that the question of law to which the decision relates either is one of general public importance or is one for which some other special reason might be considered by the Court of Appeal."

18.      This provision is considered by Mustill and Boyd in the Law on Practice of Commercial Arbitration in England (Second Edition).  After referring to that part of the 1979 Act that I have set out above the learned authors say:-

"These conditions are cumulative, not alternative.  The parties seeking to appeal may obtain a certificate but fail to obtain leave to appeal:  or he may obtain leave to appeal but fail to obtain a certificate:  in either case he is barred from recourse to the Court of Appeal."

19.      Whether or not a certificate should be granted by the lower court that the question for the Court of Appeal is one of general public importance is addressed by the learned authors by reference to the test laid down by Lord Diplock in Pioneer Shipping Limited v BTP Tioxide Limited (The Nema) (1982) AC 724 in which the authors characterise that part of the test as follows:-

"(1)     The most important characteristics for question of general public importance are

(a)       that it has recurred or is likely to recur with a fair degree of frequency; and

(b)       that it raises a point of legal principle of general application.

(2)       A question is not of general public importance if it arises out of construction or application of a "one off clause". 

(3)       Even a question arising out of a standard clause is not of general public importance unless it turns on the application of the clause to "events of a kind that it is not unlikely maybe produce themselves in similar transactions between other parties engaged in the same trade".

(4)       The expression "public" is used in contrast private and does not connote the public at large.  A question may be of general public importance although its impact is limited to persons engaged in a particular trade or other section of the public; but not if its importance is limited to the parties to a particular private transaction, even though they may, as a class, include more persons than the parties to the actual arbitration from which the question has arisen.

(5)       A mixed question of fact and law will rarely, if ever, give rise to a question of general public importance."

20.      To apply those principles to the question before me it seems to me that it is impossible to characterise the Judgment, insofar as it relates to the existence or otherwise of the exclusion clause in the arbitration process between these parties as a matter of "general public importance".  The circumstances are likely to be unique, or very nearly so, to the parties in the instant case.  It may not very often be the case that where parties elect to opt out of a contractually agreed arbitration mechanism they would do so in a manner that left in doubt how the revised arbitration mechanism would work.  It is likely that this issue is an interpretation of a "one off" clause or, even if it should be viewed as relating to a standard clause, it is doing so in circumstances that are unlikely to be reproduced in similar transactions between other parties engaged in the same trade.  In my view the decision on the exclusion clause does not amount to a point of general public importance.  The arrangements between JE and the Public are applicable to the instant arbitration alone and not for future arbitrations between them under the lease. 

21.      I now therefore turn to consider whether or not it might be said that there is some "other special reason" that means that this point on the exclusion clause should be considered by the Court of Appeal. 

22.      Mustill and Boyd go on, at page 629, to consider the question of "some other reason".  They say:-

"The second ground on which a certificate may be granted is that "for some other reason" the question "should be considered by the Court of Appeal".  This is a catch all provision for which it is difficult to extract any single guiding principle:  indeed it is probably undesirable even to attempt to do so.  The philosophy underlying the 1979 Act, as explained in The Nema, plainly requires that "some other reason" should be an important reason and sufficient to oust the prima facie presumption in favour of finality; beyond that, however, one can only say that the discretion must be exercised according to the facts of each case.  It is unlikely that any one factor will be decisive.  So, for example, the mere size of the sum in issue would not be sufficient reason; nor, we suggest, the mere fact that the judge has overruled the arbitrator's decision, or has done so only with considerable hesitation.  But the cumulative effect of these and other factors could on occasion justify a certificate being granted on this ground.  It has to be borne in mind that in the great majority of cases where no point of general public importance is involved, the judge will not have granted leave to appeal to the High Court unless there was a very strong probability of the award being reversed.  In practice this is likely to mean that most "one off" cases which reach the stage of a hearing on the merits will result in the arbitrators decision being reversed and a certificate of general public importance being refused.  In the long term this is likely to give rise to a risk that the reputation of the arbitrator and appellate process will be harmed, unless from time to time the occasional "one off" case finds its way to the Court of Appeal so that it can be ruled upon with the authority which that Court commands.  The decision of the High Court to refuse to grant a certificate is not open to challenge by way of appeal because it is not a "judgment or order" ..."

23.      It seems to me that questions relating to "the finality of the award" are significantly less persuasive where, as here, one party has been granted leave to appeal.  At this point, therefore, the question of finality is largely irrelevant as the award is not final.  In fact it may be argued that the contrary is true.  In granting leave I have in effect overridden the presumption in favour of finality and JE wish to test that decision by reference to the Court of Appeal.  If successful then the appeal will be at an end and the arbitrator's decision, the Downham award, will be final.  If unsuccessful then there will have been some delay to the proceedings for the Royal Court dealing with the appeal itself but, in the context of the period that it has taken these parties to reach the stage of concluding an arbitration that delay seems to me to be of relatively minor consequence.  As far as I am aware this is the first occasion in Jersey that parties to a lease containing a clear arbitration provision have elected to depart from that provision and have not in doing so provided absolute clarity about whether it was intended that any of the principles enshrined in the arbitration provision in the lease should be read across to their new arrangements.  I have ruled that they should not but it may be, in terms of the circumstances of this case and the consequences of my judgment, that this narrow point should be tested before the Court of Appeal. 

24.      Is it, however, a question of law?  It is, in reality, a question either of construction of the provision in a lease or of a contract outside the lease between parties.  In my view, this is a question of law and therefore it does to my mind fall within Article 21(7)(b). 

25.      In summary, therefore, in my view JE needs leave to appeal against the Judgment.  The issue on which they wish to appeal is the interpretation either of the exclusion provision within arbitration clause in the lease or the new contractual arrangement outside the lease.  This is it seems to me, a point of law.  Whilst not a matter of public importance it is to my mind a matter of consequence to the parties and one on which a decision of the Court of Appeal would be valuable. 

26.      Accordingly, in my view the question of the applicability of the exclusion clause is a matter which might be considered by the Court of Appeal and I grant leave to appeal to JE on that point. 

Authorities

Public of the Island of Jersey-v-Jersey Electricity Company [2016] JRC 006.

Arbitration (Jersey) Law 1998.

Arbitration Act 1979.

Mustill and Boyd in the Law on Practice of Commercial Arbitration in England (Second Edition).

Pioneer Shipping Limited v BTP Tioxide Limited (The Nema) (1982) AC 724.