Tuesday, January 14, 2014

S v S: Guidance on applications to give effect to arbitral awards

The President has given guidance about the proper approach of the court to applications for the approval of consent orders which have been lodged with the court following, and intended to give effect to, arbitral awards, in S v S [2014] EWHC 7 (Fam).

In his judgment the President set out a summary of the IFLA Arbitration Scheme, the facts of the case and the legal context of such applications. I won't go into those here, instead concentrating upon what he had to say about the approach that the courts should take in cases where there has been an arbitration award under the IFLA Scheme or something similar.

He began by pointing out:
" Two situations need to be considered: one where the parties come before the court seeking a consent order; the other where one or other party is seeking to resile from the arbitrator's award. In the present case I am, strictly speaking, concerned only with the first, but some provisional comments on the other may be helpful and not out of place."
The starting-point in every case was, in the words of Sir Peter Singer, that:
"The autonomous decision of the parties to submit to arbitration should be seen as a 'magnetic factor' akin to the pre-nuptial agreement in Crossley v Crossley".
In other words:
"In the absence of some very compelling countervailing factor(s), the arbitral award should be determinative of the order the court makes."
"There is no conceptual difference between the parties making an agreement and agreeing to give an arbitrator the power to make the decision for them."
He said that it was worth remembering his own words (in L v L) concerning the function of the judge when invited to make a consent order in a financial remedy case:
"...the judge is not a rubber stamp. He is entitled but is not obliged to play the detective. He is a watchdog, but he is not a bloodhound or a ferret."
He then set out the essential principles:
"Where the consent order which the judge is being asked to approve is founded on an arbitral award under the IFLA Scheme or something similar (and the judge will, of course, need to check that the order does indeed give effect to the arbitral award and is workable) the judge's role will be simple. The judge will not need to play the detective unless something leaps off the page to indicate that something has gone so seriously wrong in the arbitral process as fundamentally to vitiate the arbitral award. Although recognising that the judge is not a rubber stamp, the combination of (a) the fact that the parties have agreed to be bound by the arbitral award, (b) the fact of the arbitral award (which the judge will of course be able to study) and (c) the fact that the parties are putting the matter before the court by consent, means that it can only be in the rarest of cases that it will be appropriate for the judge to do other than approve the order. With a process as sophisticated as that embodied in the IFLA Scheme it is difficult to contemplate such a case."
Applying those principles he approved the consent order in the present case.

He added that he could "see no reason why the streamlined process applied by Coleridge J in S v P (Settlement by Collaborative Law Process) [2008] 2 FLR 2040 in the context of a consent order which was the product of the collaborative law process should not be made similarly available in cases where the consent order is the product of an arbitral award under the IFLA Scheme or something similar." The headnote to that case reads:
“This application for approval of draft consent orders could be dealt with [by a High Court judge] in the ‘urgent without notice’ applications list, in order to shortcut the normal rather lengthier process of lodging consent orders … and waiting for them to be approved and sent back … The court would usually be prepared to entertain applications of this kind in the without notice applications list before the applications judge of the day on short notice. A full day’s notice must be given to the clerk of the High Court judge in front of whom it was proposed to list the case; such notice could be given by telephone. The clerk of the rules should be informed that this was taking place. Use of the shortcut process was always subject to the consent of the urgent application judge. However, provided every aspect of documentation was agreed, the hearing was not expected to last more than 10 minutes, and the documentation was lodged with the judge the night before the hearing, this process had been approved by the President”.
He added two points relating to procedure:

(1) In every case the parties should lodge with the court both the agreed submission to arbitration (in the case of an arbitration in accordance with the IFLA Scheme, the completed Form ARB1) and the arbitrator's award.

(2) The order should contain recitals to the following effect, suitably adapted to meet the circumstances:
"The documents lodged in relation to this application include the parties' arbitration agreement (Form ARB1), their Form(s) D81, a copy of the arbitrator's award, and a draft of the order which the court is requested to make.

By their Form ARB1 the parties agreed to refer to arbitration the issues described in it which encompass some or all of the financial remedies for which applications are pending in this court; and the parties have invited the court to make an order in agreed terms which reflects the arbitrator's award."
As to the situation where a party seeks to resile from the arbitral award:
"the other party's remedy is to apply to the court using the 'notice to show cause' procedure. The court will no doubt adopt an appropriately robust approach, both to the procedure it adopts in dealing with such a challenge and to the test it applies in deciding the outcome. In accordance with the reasoning in cases such as Xydhias v Xydhias, the parties will almost invariably forfeit the right to anything other than a most abbreviated hearing; only in highly exceptional circumstances is the court likely to permit anything more than a very abbreviated hearing.

"Where the attempt to resile is plainly lacking in merit the court may take the view that the appropriate remedy is to proceed without more ado summarily to make an order reflecting the award and, if needs be, providing for its enforcement. Even if there is a need for a somewhat more elaborate hearing, the court will be appropriately robust in defining the issues which are properly in dispute and confining the parties to a hearing which is short and focused. In most such cases the focus is likely to be on whether the party seeking to resile is able to make good one of the limited grounds of challenge or appeal permitted by the Arbitration Act 1996. If they can, then so be it. If on the other hand they can not, then it may well be that the court will again feel able to proceed without more to make an order reflecting the award and, if needs be, providing for its enforcement."


  1. If both parties are legally represented they should be entitled to settle their mutual affairs as they see fit without the help of a mediator, the findings of an arbitrator, or the permission of a judge. PI claims involving much larger sums can be settled without the approval of the court. And the imbalance of power between any claimant and an insurance company is massively greater than that between the most arrogant of husbands and the most submissive of wives (or of course vice versa). It is time to start treating divorcing couples as two independent adults.

    1. Interesting. There is, of course, also the possibility of duress, plus there may be children to consider.

  2. The possibility of duress is why I would only apply it to couples who wee both represented. As for children: neither maintenance not contact can be the subject of a binding contract between the parents and that is how it should be.

    As an experiment, I would begin by applying it to cases where the children were all 18, or 16 and out of school.

  3. Sorry: or of course where there are no children.

    1. One of the big problems is that clients do not always accept the advice of their solicitors. I remember such cases, where I worried about duress.


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