Scottish Court of Session Decisions

You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Liffe Administration and Management v. Scottish Ministers [2003] ScotCS 357 (04 December 2003)
URL: http://www.bailii.org/scot/cases/ScotCS/2003/357.html
Cite as: 2004 SCLR 228, [2003] ScotCS 357

[New search] [Help]

Liffe Administration and Management v. Scottish Ministers [2003] ScotCS 357 (04 December 2003)

OUTER HOUSE, COURT OF SESSION

P1006/03

OPINION OF LORD MACFADYEN

in the Petition of

LIFFE ADMINISTRATION AND MANAGEMENT,

Petitioners;

against

THE SCOTTISH MINISTERS,

Respondents;

for

An order in terms of section 1 of the Administration of Justice (Scotland) Act 1972.

________________

Petitioners: Ross, Shepherd & Wedderburn, W.S.

Respondents: Lake, R Henderson

4 December 2003

Introduction
[1] The petitioners ("LIFFE") are a company incorporated under the Companies Acts and have been recognised by the Financial Services Authority as an investment exchange pursuant to section 290 of the Financial Services and Markets Act 2000 ("the 2000 Act"). The respondents, the Scottish Ministers, are called as representing the Scottish Executive Environment and Rural Affairs Department ("SEERAD"). The petitioners seek an order under section 1 of the Administration of Justice (Scotland) Act 1972 ("the 1972 Act") for recovery of certain documents held by SEERAD which relate to work undertaken for LIFFE under an inspection contract by potato inspectors employed by SEERAD.

The contractual background
[2] The exchange operated by LIFFE is the London International Financial Futures and Options Exchange ("the Exchange"). One of the contracts traded on the Exchange was Exchange Contract No. 402, a Bulk Potato Futures Contract ("the Potato Contract"). LIFFE are not parties to the Potato Contract. Clause 11 provides, however, that the quality of potatoes traded under the Potato Contract "shall be determined by an inspector approved by the Exchange". It is averred that LIFFE do not themselves employ inspectors for that purpose. Instead, historically they have contracted with the government for this task to be performed in Scotland by inspectors employed by the government. The petitioners aver that on 7 September 2001 LIFFE entered into a contract ("the Inspection Contract") with SEERAD under which SEERAD agreed to undertake quality inspections. In terms of Clause 3.1 of the Inspection Contract, they undertook to do so "as laid down in the Contract Terms and Administrative Procedures of [the Potato Contract]". Clause 8 of the Terms and Conditions attached to the Inspection Contract further provided that "SEERAD shall comply with and follow any procedures at any Quality Inspections as set out in the Terms and Procedures".

The origin of the complaints
[3] The petitioners aver that between July and December 2002 four named buyers who had bought potatoes under the Potato Contract complained that the inspection procedure was not being carried out properly. It is averred that the complaints related to inspections carried out in April 2001 and 2002 at certain identified grading stations. (I would observe that I find the reference to April 2001 difficult to understand, when the Inspection Contract founded on was not entered into until September 2001. Mr Ross, who appeared for the petitioners, indicated in any event that the reference to April 2001 might have to be deleted, and that the main focus of the issue was on the April 2002 inspections. I shall proceed on that basis.) The petitioners aver that the underlying basis of the complaints was that the SEERAD inspectors had failed properly to carry out the inspections. In particular when potatoes were being peeled to check them for faults, they were peeled too deeply, contrary to the BPC ware standard referred to in Clause 11.02 of the Potato Contract. As a result potatoes were passed as good when they were not. It is averred that these complaints, if well founded, would constitute breach of SEERAD's obligations under Clause 3 of the Inspection Contract. The petitioners' averments then set out the buyers' complaint that they have as a result of the defective inspections suffered loss, and identify the amounts of compensation which the four buyers respectively claim from LIFFE.

Statutory immunity and the Complaints Ombudsman scheme
[4] LIFFE has statutory immunity from certain liability in damages. That immunity is conferred by section 291 of the 2000 Act, which provides inter alia as follows:

	"(1)	A recognised body and its officers and staff are not to be liable in damages for anything done or omitted in the discharge of the recognised body's regulatory functions unless it is shown that the act or omission was in bad faith.
	(2)	...
	(3)	"Regulatory functions" means the functions of the recognised body so far as relating to, or to matters arising out of, the obligations to which the body is subject under or by virtue of this Act."

[5] The petitioners aver, however, that as part of the recognition requirements under which LIFFE qualified as a recognised investment exchange, procedures required to be put in place for investigating complaints. The relevant requirement is to be found in paragraph 9 of Part I of the Schedule to the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses) Regulations 2001 (S.I. 2001 No. 995) ("the Regulations"). Paragraph 9 provides inter alia as follows:

"(1)	The exchange must have effective arrangements for the investigation and resolution of complaints arising in connection with the performance of, or failure to perform, any of its regulatory functions.
(2)	...
(3)	The arrangements must include arrangements for a complaint to be fairly and impartially investigated by a person independent of the exchange, and for him to report on the result of his investigation to the exchange and to the complainant.
(4)	The arrangements must confer on the person mentioned in sub-paragraph (3) the power to recommend, if he thinks it appropriate, that the exchange ―
	(a)	makes a compensatory payment to the complainant,
	(b)	remedies the matter complained of,
	or takes both of those steps."

[6] The provisions required by paragraph 9 are contained in Section 11 of Book II of LIFFE's Rules. Section 11 lays down a three-stage procedure. First, a complaint is to be considered by or on behalf of the Market Secretary (Rule 11.2.3). Secondly, if he cannot resolve the complaint to his and the complainant's mutual satisfaction, he must refer the matter to the Membership, Rules and Trading Committee ("the Committee") (Rule 11.2.3), and they must consider the complaint (Rule 11.2.4). Thirdly, if the Committee concludes that the complaint cannot be resolved to the mutual satisfaction of the Exchange and the complainant, the complainant may request that the complaint be referred to the Complaints Ombudsman (Rule 11.2.4). Rule 11.3.2 provides that:

	"In considering the complaint, the Complaints Ombudsman shall consider whether or not the performance of, or failure to perform, the specified regulatory functions by the Exchange amounts to:
	(a)	a failure to act fairly; and/or
	(b)	a failure to perform its regulatory functions within a reasonable time; and/or
	(c)	a lack of care or a mistake; and/or
	(d)	bad faith,
	which has had a significant impact upon the complainant.

Rule 11.3.4 gives the Ombudsman a discretion to refuse to accept a referral of a complaint in a variety of circumstances. In terms of Rule 11.3.5 the Ombudsman, if he accepts the referral, must give the complainant and the Exchange an opportunity, and may require them, to make written submissions and to attend a hearing and give evidence. Rule 11.3.6 requires the Ombudsman to report his findings to the complainant, the chairman or deputy chairman of the Committee and the Financial Services Authority, and empowers him to make recommendations of the sort mentioned in paragraph 9(4) of the Schedule to the Regulations. Rule 11.3.7 confers on the Committee an absolute discretion to determine what course of action to take upon the Ombudsman's report. Their decision is final.

[7] Section 11 of Book II of the Rules is supplemented by a Complaints Procedure laid down pursuant to Rule 11.6.1. To some extent the Procedure is repetitive of material contained in the Rules. Procedure 5.2, however, provides as follows:

	"In submitting a complaint, the complainant shall explain:
	(a)	how the alleged misconduct by the Exchange arose from the way in which the Exchange has performed, or failed to perform, its regulatory functions;
	(b)	why the alleged misconduct amounts to one of the four categories in procedure 4.1 above [which reiterates Rule 11.3.2]; and
	(c)	how it has resulted in a significant impact upon the complainant."

Procedure 6.1 stipulates that complaints "should" be made within twelve months of the occurrence of the circumstances giving rise to the complaint, and indicates that complaints made later than this will only be investigated if the complainant can show reasonable ground for the delay. Procedure 10.1 (reflecting in somewhat different language the broad effect of Rule 11.3.4) confers on the Ombudsman an absolute discretion to determine whether a complaint falls within the scope of the scheme and, if so, whether to conduct an investigation. Procedure 10.3 empowers the Ombudsman to "conduct an investigation in whatever manner he considers appropriate". Procedure 12.1 sets down a number of factors normally to be taken into account by the Exchange in deciding how it should respond to recommendations made by the Ombudsman.

The need for recovery of documents
[8] The basis on which the petitioners seek to justify their application for recovery of documents from SEERAD is set out in statements 5 and 6 of the petition. It is averred that the buyers have indicated that they intend to invoke the Complaints Ombudsman scheme. It is averred that the buyers' complaints proceed on the basis that they relate to matters done or omitted to be done in the exercise of LIFFE's regulatory powers. The petitioners further aver that they have "a statutory obligation to ensure that business conducted by means of their facilities is conducted in an orderly manner and so as to afford protection to investors". That is a reference to paragraph 4(1) of Part I of the Schedule to the Regulations. The petitioners further aver that in order to "deal with" the buyers' claims in the anticipated proceedings before the Committee and the Complaints Ombudsman, they require the documents described in the Annex to the petition, which are in the hands of SEERAD. They aver that SEERAD has been asked to produce the documents, but refuses or delays to do so. The application is therefore made under section 1 of the 1972 Act on the basis that it is incidental to civil proceedings which are likely to be brought.

The documents sought
[9] In the Annex to the petition the documents which the petitioners seek to recover are described as "All ...documents held by or on behalf of [SEERAD] ... relating to the work of their inspectors under the Inspection Contract". Recovery is sought in order that excerpts may be taken from the documents at the sight of a commissioner of all entries showing or tending to show:

the allocation of inspectors to the Grading Stations during April 2001 and April 2002;
training and instruction on the inspection process provided to the inspectors;
any amendments, changes or alterations to the inspection process;
complaints made about the conduct of the inspections;
correspondence between SEERAD and the buyers or their representatives concerning the inspection process;
correspondence between SEERAD and the petitioners concerning the inspection process;
notes, records or reports made by the inspectors of, or relating to, the inspections; and
reviews of the inspection process conducted after its completion.

The issues debated
[10] The respondents plead (1) that the petition is incompetent, and (2) that the petitioners' averments are irrelevant et separatim lacking in specification, and that on these grounds the petition should be dismissed. The petition was appointed to the procedure roll in respect of those two pleas. Although the interlocutor of 24 October 2003 appointing the petition to the procedure roll did so for the additional purpose of considering the petitioners' argument that the answers should be repelled and the prayer of the petition should be granted, it was accepted by both parties in the course of the discussion on the procedure roll that, if I took the view that the respondents' first and second pleas-in-law should both be repelled, I should put the petition out By Order for the purpose of considering further procedure.

Competency

(a) The statutory provision
[11] Section 1 of the 1972 Act, on which the petitioners found their application, provides inter alia as follows:

"(1)	Without prejudice to the existing powers of the Court of Session and of the sheriff court, those courts shall have power, subject to the provisions of subsection (4) of this section [privilege and confidentiality], to order the inspection, photographing, preservation, custody and detention of documents and other property ... which appear to the court to be property as to which any question may relevantly arise in any existing civil proceedings before that court or in civil proceedings that are likely to be brought, and to order production and recovery of any such property, the taking of samples thereof and the carrying out of any experiment thereon or therewith.
(1A)	...
(2)	Notwithstanding any rule of law or practice to the contrary, the court may exercise the powers mentioned in subsection (1) ... of this section―
	(a)	where proceedings have been commenced, on the application, at any time after such commencement, of any party to or minuter in the proceedings, or any other person who appears to the court to have an interest to be joined as such party or minuter;
	(b)	where proceedings have not been commenced, on the application at any time of a person who appears to the court to be likely to be a party to or minuter in proceedings which are likely to be brought;
	unless there is special reason why the application should not be granted".

(b) The respondents' submissions
[12] Mr Lake, who appeared for the respondents, pointed out that section 1 of the 1972 Act applied originally only where civil proceedings had been, or were likely to be, raised in Scotland (Iomega Corporation v Myrica (UK) Limited 1998 SC 636 per Lord President Rodger at 639D-E). Where proceedings have been or are likely to be brought outwith Scotland, the court's power to make an order under section 1 is regulated by section 28 of the Civil Jurisdiction and Judgments Act 1982. So far as material for the purposes of the present application, section 28 provides inter alia as follows:

"When any proceedings have been brought, or are likely to be brought, ... in England and Wales ... in respect of any matter which is within the scope of the Regulation [i.e. Council Regulation (EC) No. 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters] as determined in Article 1, the Court of Session shall have the like power to make an order under section 1 of the Administration of Justice (Scotland) Act 1972 as amended ... as if the proceedings in question had been brought, or were likely to be brought, in that court."

[13] Mr Lake pointed out that, in the domestic application of section 1, where the proceedings for the purpose of which the application was made were existing proceedings, the language of the section made it plain that the section applied exclusively to proceedings in court ("... any existing civil proceedings before that court..."). He recognised, however, that it had been held that, where an application was made in connection with civil proceedings that were likely to be brought, the expression "civil proceedings" was not confined to proceedings in court. In Anderson v Gibb 1993 SLT 726 Lord Penrose held (at 729F) that the expression should receive "its general, wide, meaning, namely that it applies to proceedings of a civil character irrespective of the court or tribunal before which they may be raised". In that case the proceedings in question were a statutory arbitration under the Agricultural Holdings (Scotland) Act 1991. Whatever the position might be in a domestic section 1 application, however, section 28 could not apply to arbitration. That was because section 28 applied only to "proceedings ... in respect of any matter which is within the scope of the Regulation as determined in Article 1", and Article 1 expressly excludes arbitration from the scope of the Regulation. Mr Lake suggested that the exclusion of arbitration left section 28 concerned exclusively with court proceedings. Given that arbitration was not within the scope of the section, it would be anomalous if less formal proceedings such as an investigation by the Complaints Ombudsman did come within its scope.

[14] In any event, Mr Lake submitted, an investigation by the Complaints Ombudsman was of a different character from the sort of proceedings contemplated in Lord Penrose's "general, wide, meaning" of the expression "civil proceedings". In particular, (i) the Ombudsman's investigation was inquisitorial, not adversarial (see Rule 11.3.5 and Procedure 10.3); (ii) it did not determine the legal rights and liabilities of the complainants and LIFFE inter se, but might merely result in a recommendation that LIFFE make a compensatory payment which, by virtue of their immunity under section 291(1), they had no legal obligation to make; and (iii) it was not binding on the parties, in that LIFFE had an absolute discretion as to whether to implement the Ombudsman's recommendation (Rule 11.3.7). Even Lord Penrose's wide meaning of "civil proceedings" involved a determination of a dispute between parties, based on their legal rights and obligations, and binding upon them. The Ombudsman's investigation and recommendation was not in that sense "civil proceedings".

[15] Mr Lake sought to draw further support for the submission that section 28 could be invoked only in support of court proceedings from the fact that the section was enacted pursuant to Article 24 of the Brussels Convention. In that connection he referred to Union Carbide Corporation v BP Chemicals Limited 1995 SC 398, per Lord President Hope at 402A-C:

"The purpose of the extension of the power under section 1 of the 1972 Act by section 28 of the 1982 Act is clear. It is to enable the Scottish court to make available to parties who are litigating or are likely to litigate in a contracting state such measures for the preservation, detention, production and recovery of documents and other property as are available under section 1 to those who are litigating or are likely to litigate in this country. That this was the purpose of section 28 ... in regard to measures which are provisional, including protective, in character ... can be seen from Article 24 of the Convention, which is in these terms:

'Application may be made to the courts of a Contracting State for such provisional, including protective, measures as may be available under the law of that State, even if, under the Convention, the courts of another Contracting State have jurisdiction as to the substance of the matter.'"

It was thus plain, Mr Lake submitted, that section 28 was intended to be ancillary to litigation. The Ombudsman's investigation would be of a different character from litigation.

[16] Mr Lake sought to rely, in further support for his contention, on authorities concerned with the proper scope of "civil and commercial matters" within the meaning of Article 1 of the Convention. Section 28 applies to "any proceedings ... in respect of any matter which is within the scope of the Regulation as determined in Article 1". Article 1 applies to "civil and commercial matters whatever the nature of the court or tribunal", and does not apply to "administrative matters". The concept "civil and commercial matters" must not be interpreted by reference to the law of one of the states concerned, but was an independent concept which must be construed with reference to the objectives and scheme of the Convention and to the general principles which stem from the corpus of the national legal systems (LTU v Eurocontrol [1976] ECR 1541 at 1552; Netherlands v Rüffer [1980] ECR 3807). In the latter case the European Court of Justice observed (at 3819):

"... the Court has specifically held ... that whilst certain judgments given in an action between a public authority and a person governed by private law may come within the area of application of the Convention that is not the case if the public authority is acting in the exercise of its public authority powers".

At 3821 the Court added:

"... the area of application of the Convention is essentially determined either by reason of the legal relationships between the parties to the action or of the subject-matter of the action".

Mr Lake submitted that the Ombudsman's investigation was into a complaint by the buyers that related to matters done or omitted to be done by LIFFE in the exercise of their regulatory powers. LIFFE exercised those powers as a public authority authorised by the Financial Services Authority to regulate a particular market. The buyers' claims were not based on legal rights against LIFFE, but were a complaint about the manner in which LIFFE had exercised their public regulatory powers. Applying the European jurisprudence, the Ombudsman's investigation was not concerned with "civil and commercial matters". It therefore fell outside the scope of section 28.

[17] There is one innovation on the effect of section 28 which requires to be considered, if only in order to enable it to be set aside. The Civil Jurisdiction and Judgments Act 1982 (Provisional and Protective Measures) (Scotland) Order 1997 (SI 1997 No. 2780) provides inter alia as follows:

"2.	The Court of Session shall have power to do anything mentioned in section ... 28 ... in relation to proceedings of the following descriptions, namely:-
	(a)	proceedings commenced otherwise than in a Brussels or Lugano Contracting State;
	(b)	proceedings whose subject-matter is not within the scope of the 1968 Convention as determined by Article 1 thereof.
3.	The Court of Session shall have power:-
	(a)	to grant interim interdict under [section 27(1)(c)];
	(b)	to act as described in section 28 of that Act,
	in relation to proceedings which are to be commenced otherwise than in a Brussels or Lugano Contracting State".

Mr Lake submitted that the Order had no effect on his submissions. Paragraph 2 related to cases where proceedings had already been commenced. Here, although the petitioners averred that complaints had been made, the petition proceeded on the basis that proceedings before the Ombudsman were proceedings that were "likely to be brought". Paragraph 3 dealt with proceedings which were likely to be brought, but sub-paragraph (b) did not modify the application of section 28. In the event, Mr Ross did not seek to rely on the Order. I do not consider that it is necessary to say anything more about it.

The petitioners' submissions
[18]

Mr Ross submitted in the first place that proceedings before the Complaints Ombudsman were of such a character that they would fall within the scope of the phrase "civil proceedings" in section 1. He referred to Anderson v Gibb, per Lord Penrose at 729F, where his Lordship concluded that "civil proceedings" meant proceedings of a civil character irrespective of the court or tribunal before which they might be raised, and at 729L, where his Lordship said:

"In the whole circumstances I am of opinion that the expression 'civil proceedings' is intended in this context to describe the character of the proceedings envisaged in the legislation rather than to circumscribe the operation of the provision by reference to the tribunal or court before which such proceedings arise".

The proceedings before the Ombudsman would be of a civil character, concerned as they were with a complaint that the buyers had suffered loss as a result of the defective potato inspections, and that a recommendation should be made that LIFFE should on that account make a compensation payment to them.

[19]

Mr Ross accepted that the application depended on section 28, since the anticipated proceedings before the Ombudsman would be brought in England. He submitted that it was of no moment that arbitration fell outwith the scope of section 28 by virtue of the terms of Article 1. There was a particular reason for the exclusion of arbitration, namely a concern about possible overlap between the Brussels Convention and other international agreements (Anton and Beaumont's Civil Jurisdiction in Scotland paragraph 3.23). The same consideration did not apply to the Ombudsman's investigation. It was wrong to argue that because arbitration was excluded, any other more informal proceedings must also be regarded as excluded. Article 1 referred to civil and commercial matters "whatever the nature of the court or tribunal". That meant that the fact that the Ombudsman's investigation was inquisitorial did not disqualify it. Nor did the fact that the Ombudsman did not decide matters of legal right. He had to decide whether there had been a failure in the performance of LIFFE's regulatory function and, if so, whether a compensatory payment or some other remedial measure should be recommended. Nor did it matter that the Ombudsman's recommendation was not binding. The expectation was that only rarely and for good reason would LIFFE decline to implement the Ombudsman's recommendation. Procedure 12.1 indicated the proper approach to that question. The Ombudsman could properly be regarded as a "tribunal" within the meaning of Article 1.

[20]

So far as the restriction in Article 1 to "civil and commercial matters" was concerned, Mr Ross submitted that, applying the European cases cited by Mr Lake, the Ombudsman's investigation should be regarded as of a civil and commercial rather than an administrative character. The exclusion of administrative matters did not go so far as to exclude all matters involving a public authority or public functions. In Netherlands v Rüffer at 3821 the matter was said to be determined either by reason of the legal relationship between the parties to the action or of the subject matter of the action. Here the subject matter of the anticipated proceedings before the Ombudsman was a complaint by the buyers about losses which they had suffered in respect of commercial contracts that they had entered into. That was sufficient to establish that the proceedings were concerned with a civil and commercial matter.

Discussion

[21] In considering the competency of the petition, I proceed on the basis that what is sought is the recovery of documents for the purpose of anticipated proceedings before the Complaints Ombudsman in England. Although it is averred that complaints have already been made between July and December 2002 (thus avoiding any question of time bar under Procedure 6.1, at least so far as the April 2002 inspections are concerned), the petition proceeds on the basis that the proceedings in question are proceedings before the Ombudsman (and possibly the Committee), and that these have not yet begun, but are "likely to be brought".

[22] It is in my view clear that since the contemplated proceedings will take place in England the petitioners cannot succeed on the basis of section 1 alone; they must also rely on section 28 (Iomega Corporation v Myrica (UK) Limited 1998 SC 636 per Lord President Rodger at 639D-E). The effect of section 28 is to extend the circumstances in which the court may make a section 1 order. Where section 28 is relied upon, it is not necessary to ask whether the contemplated proceedings are "civil proceedings" within the meaning of section 1. The inquiry which must be made is whether the contemplated proceedings are "in respect of any matter which is within the scope of the Regulation as determined in Article 1". That in turn requires inquiry as to whether the contemplated proceedings will be concerned with "civil and commercial matters whatever the nature of the court or tribunal".

[23] The decisive issue in the present case is therefore whether an investigation by the Complaints Ombudsman is properly to be regarded as a civil and commercial matter, as distinct from an administrative matter. That issue is not to be determined by whether, as a matter of Scottish or English domestic law, the matter can be regarded as civil or commercial rather than administrative; the issue must be addressed by reference to the independent concept referred to in the Convention (LTU v Eurocontrol; Netherlands v Rüffer). Adopting that approach, as explained in Netherlands v Rüffer at 3821, I am of opinion that the Ombudsman's investigation is properly to be classified as an administrative matter, rather than a civil or commercial one. The subject matter of the investigation is not any civil or commercial claim based on any legal right enjoyed by the buyers or any legal liability incumbent on LIFFE. On the contrary, the Ombudsman procedure arises out of the fact that LIFFE has immunity in respect of claims for damages in respect of anything done or omitted to be done in discharge of its regulatory functions. LIFFE is a body authorised to exercise the essentially public function of regulating the particular market with which it is concerned. The Ombudsman scheme is designed to afford a means of making complaints about LIFFE's performance of that public function. That the complaints may reflect commercial losses suffered by the buyers, and that one course open to the Ombudsman is to recommend that compensation be paid, is not in my opinion enough to imbue the proceedings with a civil or commercial character. They are, on the contrary, a means of enabling complaint to be made about the essentially administrative matter of the exercise by a public authority which regulates a particular investment market of its regulatory powers and functions. I therefore conclude that the contemplated proceedings before the Ombudsman are not within the scope of section 28 because they are concerned with an administrative rather than a civil or commercial matter.

[24] I am reinforced in the conclusion that the application is not within the scope of section 28 by considering whether the Ombudsman is properly to be regarded as a tribunal. Article 1 concentrates attention on whether a matter is civil or commercial "whatever the nature of the court or tribunal". But in my view that implies that it is concerned only with matters which arise before a court or tribunal of some sort. I do not consider that the observations of Lord President Hope in Union Carbide Corporation v BP Chemicals Limited, expressed in terms of litigation and courts, can be regarded as supporting the view that Article 1 is concerned exclusively with court proceedings. As I have noted the Article refers to "court or tribunal". It is therefore in my view necessary to consider whether the Ombudsman falls into either of those categories. He is plainly not a court. In my view, he is not a tribunal either. In my view Mr Ross was right to submit that the fact that arbitration is excluded from the scope of the Convention or Regulation by Article 1 ought not to yield an inference as to whether other informal categories of proceedings are also excluded. As he pointed out, there was thought to be a specific reason for the exclusion of arbitration, which would not apply to other forms of proceedings. It seems to me, however, that a tribunal has certain attributes which the Ombudsman's investigation does not have. Of the factors pointed to by Mr Lake, one is not in my view persuasive. There is in my view no good reason to think that inquisitorial proceedings cannot be the proceedings of a tribunal in the relevant sense. The other considerations on which he relied are, however, in my view sound. In my view a "tribunal" in the ordinary sense of that word is a person or body who decides on the rights and obligations of parties to a dispute, and renders a decision which is binding on those parties. The Ombudsman lacks those features. He does not decide on the complainant's rights or LIFFE's obligations or liabilities. He merely makes recommendations as to steps that LIFFE might take, in circumstances in which they can ex hypothesi have no legal liability. His recommendations are not binding. Whatever the expectation may be as to how LIFFE will ordinarily respond to a recommendation, they have an absolute discretion whether to implement the recommendation or not. They cannot be compelled to do so. In my view, therefore, the anticipated proceedings before the Ombudsman are not within the scope of section 28 for the additional reason that the Ombudsman is not a "court or tribunal".

[25] For these reasons I am of opinion that the anticipated proceedings before the Complaints Ombudsman are not within the scope of section 28. It follows, in my opinion, that the petition is incompetent.

Relevancy
[26] If the petition is incompetent, the question of the relevancy and specification of the petitioners' averments does not arise. It is nevertheless appropriate that I should indicate briefly the view which I would have taken on that question had it been a live one.

[27] For the test of what averments are necessary to make a relevant application under section 1 Mr Lake referred to Dominion Technology Ltd v Gardner Cryogenics Ltd (No. 1) 1993 SLT 828, in which Lord Cullen said at 832B:

"In an application under section 1 of the 1972 Act in connection with prospective proceedings it is, in my view, plainly necessary that the applicant should do more than set out the nature of the proceedings which he is proposing to raise and the relevance to those proceedings of the documents and other property for which he is seeking an order. The court requires to be satisfied that the proceedings are 'likely to be brought'; and that as a matter of the exercise of its discretion it is appropriate that the order should be granted. This entails in my view that the applicant requires to make adequate averments as to the substance of and basis for the case which he proposes to make. To accept less than this would not do justice to the terms of section 1 and would create the risk of an order being granted where the applicant did not know if there was a stateable case but hoped to obtain the material for one by means of a fishing expedition."

[28] Mr Lake submitted that the petitioners had not satisfied that test. They had not set out what the substance of and basis for the case was. In particular, they had said that the complaints were founded in defective inspection carried out by SEERAD inspectors. They had said that the complaints, if well founded, would constitute breach of contract on SEERAD's part. But that was breach of SEERAD's contract with LIFFE, not the breach of any contract on which the buyers might sue LIFFE. They had said that the complaints "proceed upon the basis that they relate to matters done or omitted to be done in the exercise of [their] regulatory functions". They had, however, wholly failed to identify what the alleged regulatory failure was. In terms of Clause 11 of the Potato Contract LIFFE's function was to approve the potato inspectors. Nothing was averred to address how in the circumstances it could be said that in respect of that matter LIFFE was guilty of any failure of the sort contemplated in Rule 11.3.2.

[29] Mr Ross submitted that all that was required by way of averment was a prima facie case. He referred to Yau v Ogilvie & Co 1985 SLT 91 at 92, col. 1 and Dominion Technology Ltd v Gardner Cryogenics Ltd (No. 1) at 832B. He pointed out that the petitioners were in the unusual position of being the party against whom the anticipated proceedings were likely to be brought, not the party who intended to bring them. It was plain from the terms of section 1 that it covered that situation. The party in that position was, however, less well placed to identify precisely what the ground of the anticipated proceedings was to be. Allowance required to be made for that consideration when assessing the relevancy and specification of the petitioners' pleadings.

[30] In response, Mr Lake pointed out that, since the petitioners' position was that the buyers had already made complaints, it was to be supposed that they had complied with Procedure 5.2, which required of the complainant at the time of making the complaint precisely the sort of specification he now sought from the petitioners: namely

	"(a)	how the alleged misconduct by the Exchange arose from the way in which the Exchange has performed, or failed to perform, its regulatory functions;
	(b)	why the alleged misconduct amounts to one of the four categories in procedure 4.1 above; and
	(c)	how it has resulted in a significant impact upon the complainant."

In these circumstances, the petitioners ought to be able to give clear specification of these matters.

[31] In my opinion this aspect of Mr Lake's submission on relevancy, which is essentially concerned with the petitioners' failure to specify the basis on which the buyers seek to make out a case of regulatory failure against them in respect of the faulty inspection by the SEERAD inspectors, is well founded. Had I held the petition to be competent, I would, in the absence of any offer to amend to cure the defect, have sustained the respondents' plea to relevancy in respect of that lack of specification.

[32] Mr Lake also criticised the petitioners' pleadings for failing to explain adequately why the documents mentioned in the Annex to the petition required to be recovered for the purpose of the anticipated proceedings before the Ombudsman. While there is, in my view, some force in that criticism, I would, had there been no other objection to granting the prayer of the petition, have been inclined to regard it as sufficiently clear why the petitioners seek recovery of the documents in question, and why such recovery is necessary to meet the buyers' complaints to the Ombudsman. I would therefore not have sustained the plea to relevancy in that respect.

Result
[33] In the event, for the reasons given in paragraphs [23] to [25] above, I am of opinion that the petition is incompetent. I shall therefore sustain the respondents' first plea-in-law and dismiss the petition.