Where a party in an arbitration in England refuses to comply with an order of an Arbitrator, the Arbitrator may issue a Peremptory Order (Arbitration Act 1996, Section 41). In Scotland, the equivalent provision is Scottish Arbitration Rule 39 which allows the arbitrator to order compliance.

In England, if the party still fails to comply, the court may make an order requiring compliance (Arbitration Act 1996, Section 42).

Facts

In Patley Wood Farm LLP v Brake [2013] EWHC 4035 (Ch), a Section 42 order was sought from the English High Court.

Patley Wood's position in the arbitration was that it had been excluded from a partnership, denied access to the books and accounts and that the Brakes had committed breaches of fiduciary duty.  They sought to dissolve the partnership.  The arbitrator's decision was this should happen, triggering a requirement for dissolution accounts to be prepared.

The Arbitrator ordered the Brakes to provide partnership books and records for the purpose of preparation of these accounts but they refused to do so. 

Decision

The court considered the principles applicable to granting of Section 42 orders.  It did so with reference to the only other case on Section 42, Emmott v Michael Wilson and Partners, 2009. 

The principles applicable were:

  • The court required to exercise its discretion as to whether or not to grant the order.
  • This is not a rubber stamping exercise.
  • However, it does not require the court to revisit an arbitrator's award
  • The fact that an arbitrator's award is under appeal is relevant but not conclusive and the Section 42 application should be dealt with on its own merits.

In terms of consideration of the facts:

  • It was a factor that the Brakes had not complied with the order despite being obliged to do so in terms of both the applicable arbitration rules (Section 42 of the 1996 Act which requires compliance with orders of the tribunal and Article 26.9 of the LCIA Rules which states that parties undertake to carry out any award immediately). 
  • The Brakes had not put forward any credible reason to justify this non-compliance.
  • It was inevitable the accounts would require to be disclosed one way or another. 

Comment

This is a further example of the court supporting the arbitration process.  Whilst it will not simply rubber stamp orders of arbitrators, it will not carry out a forensic examination of the reasoning behind such awards or a re-hearing of the issue.  Broadly, if the facts support an order under Section 42, it appears that the courts will be prepared to grant this. 

This is very much in line with the principle in Section 1 of the 1996 Act where the court only intervenes to a limited extent and as provided in the Act.  It therefore, acts in a supporting role, supplementing arbitration as parties' dispute resolution method of choice as necessary.