“The logical approach to multiple applications of this kind is almost invariably to determine the application to set aside or remit for serious irregularity first and to consider the question of permission to appeal once it has been decided whether the award can stand. Although applications for leave to appeal under s. 69 are normally on paper without an oral hearing, the course adopted in the present case of hearing oral argument on the application for leave at the same hearing as for the S. 68 application is a sensible and more cost efficient approach, particularly having regard to the fact that the underlying facts and legal submissions relevant to both applications are so closely related.”
“The tribunal shall - act fairly and impartially as between the parties, giving each a reasonable opportunity of putting his own case and dealing with that of his opponent, and adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.”
“Looking at the whole picture, I am satisfied that the issue of insufficient width of the turning area at the entrance to the dock never became an issue in the arbitration. It was unpleaded. It was never argued. Not only was it not supported by any evidence but it was expressly negatived by the two experts called by the owners, Captain Churchill and Captain Knott, and it was never put to the charterers' expert, Captain Warwick.”
“We are concerned with a case where the arbitrators appear mistakenly to have thought that the issue of the width of the turning place was one which had been raised before them and upon which they were entitled to decide the case, without drawing the point to the attention of the charterers.”
“It seems to me that the point that occurred to the umpire was a point that would bring about a dramatic development of the case, and I am satisfied that the import of it was not communicated to Mr. Ellis in such a way as enabled him to deal with it. I have no doubt that something was said; but it was essential, in view of the way in which the case had been presented and the way in which it had proceeded for very nearly two years, that if some entirely new point, not taken by the charterers, and running quite counter to their willingness to pay a sum, was being taken, it should be made quite clear.” and:“In my judgment, the umpire could not have made clear that he was proposing not to accept the starting time which both parties had accepted. Whether he was right in law is not for me to say in these proceedings. But the owners, in my judgment, ought to have had a real opportunity of dealing with the new point, and of putting forward reasons for submitting that it was wrong.” (2) Secondly, in Fox v. Wellfair Ltd [1981] 2 Lloyd's Rep. 514, a case where an expert arbitrator took advantage of his own special knowledge without putting that knowledge to a party and so giving the party an opportunity of dealing with it Dunn LJ said at 529 “If the expert arbitrator, as he may be entitled to do, forms a view of the facts different from that given in the evidence which might produce a contrary result to that which emerges from the evidence, then he should bring that view to the attention of the parties. This is especially so where there is only one party and the arbitrator is in effect putting the alternative case for the party not present at the arbitration. Similarly if an arbitrator as a result of a view of the premises reaches a conclusion contrary to or inconsistent with the evidence given at the hearing, then before incorporating that conclusion in his award he should bring it to the attention of the parties so that they may have an opportunity of dealing with it.” and at 531: “. . . his views should have been clearly put to them. In failing to take that course, in my view the arbitrator was guilty of technical or legal misconduct in failing to observe the principles of natural justice.”
“In truth, we are simply talking about fairness. It is not fair to decide a case against a party on an issue which has never been raised in the case without drawing the point to his attention so that he may have an opportunity of dealing with it, either by calling further evidence or by addressing argument on the facts or the law to the tribunal. In my judgment, the arbitrators in the present case failed to give that opportunity to the charterers in respect of an issue not raised in the arbitration….”
“If an arbitrator considers that the parties or their experts have missed the real point - a dangerous assumption to make, particularly where, as in this case, the parties were represented by very experienced Counsel and solicitors - then it is not only a matter of obvious prudence, but the arbitrator is obliged, in common fairness or, as it is sometimes described, as a matter of natural justice, to put the point to them so that they have an opportunity of dealing with it.”
“The parties are entitled to assume that the tribunal will base its decision solely on the evidence and argument presented by them prior to the making of the award and if the tribunal are minded to decide the dispute on some other point, the tribunal must give notice of it to the parties to enable them to address the point.” (2) From Mustill & Boyd on Commercial Arbitration (2nd Edition) at p.312 was cited in the following terms: “If the arbitrator decides the case on a point he has invented for himself, he creates surprise and deprives the parties of their right to address full arguments on the case which they have to answer.”
“In those circumstances, what has happened in this case is that an award has been made on a basis which the claimants never had a reasonable opportunity of making the subject of their submissions or the subject of evidence.”
“In the present case the charterers rely on s. 68(2)(a) - failure by the tribunal to comply with s. 33 of the Act. In substance, their complaint is that the arbitrators made findings of fact of which they did not forewarn the parties and for which there was no evidential basis. They thereby unfairly deprived the charterers of the opportunity of addressing them on those matters and therefore failed to provide a fair means for the resolution of the matters in dispute. The arbitrators’ duty was to give the parties a fair opportunity of addressing them on all factual issues material to their intended decision as to which there had been no reasonable opportunity to address them during the hearings: see Interbulk Ltd. v. Aiden Shipping Co. Ltd. (The Vimeira), [1984] 2 Lloyds Rep. 66, per Lord Justice Robert Goff at pp. 74 to 75 and, in relation to s. 33 of the 1996 Act, Russell on Arbitration 21st ed., pars. 5-060 to 061 approved in Pacol v Rossakhar, [2000] 1 Lloyd's Rep. 109 at p. 114. It has to be emphasized, however, that the duty to act fairly is quite distinct from the autonomous power of the arbitrators to make findings of fact. Thus, whereas it may normally be contrary to the arbitrator’s duty to fail to give the parties an opportunity to address them on proposed findings of major areas of material primary facts which have not been raised during the hearing or earlier in the arbitral proceedings, it will not usually be necessary to refer back to the parties for further submissions every single inference of fact from the primary facts which arbitrators intend to draw, even if such inferences may not have been previously anticipated in the course of the arbitration. Particularly where there are complex factual issues it may often be impossible to anticipate by the end of the hearing exactly what inferences of fact should be drawn from the findings of primary fact which have been in issue. In such a case the tribunal does not have to refer back its evidential analysis for further submissions. A typical situation is where arbitrators arrive at a conclusion on an issue of expert evidence which differs to some extent from that put forward by either opposing expert. In many cases, such as this, the arbitrators have been appointed because of their professional legal, commercial or technical experience and the parties take the risk that, in spite of that expertise, errors of fact may be made or invalid inferences drawn without prior warning. It needs to be emphasized that in such cases there is simply no irregularity, serious or otherwise. What has happened is simply an ordinary incident of the arbitral process based on the arbitrator’s power to make findings of fact relevant to the issues between the parties.”
“28. The easy answer is when a right-minded observer would conclude that the information ought to be disclosed to the affected parties in order to give them the opportunity to assess it, comment upon it and if appropriate call further evidence to deal with it. Yet that is an answer which does not give much practical guidance. That it is not very helpful is perhaps unsurprising. As Lord Mustill observed in R. v Secretary of State for the Home Department Ex p. Doody [1994] 1 A.C. 531, 560, what fairness requires in any particular case is "essentially an intuitive judgment". 31. The best I can do to provide an acceptable test is to reformulate the question in this way: is the information upon which the arbitrator has relied information of the kind and within the range of knowledge one would reasonably expect the arbitrator to have acquired if, as required by the terms of this lease, he is experienced in the letting and/or valuation of property which is of a similar nature to the premises, is situate in the same region as the premises and used for purposes similar to those authorised under the lease.”
“To summarise, the scope of notice and response rights at common law can be stated in broad terms only, because each case must be tailored to the circumstances of the particular case. The overriding objective is to avoid surprise, and therefore lack of opportunity to respond in the way that the parties had envisaged when setting up the arbitration. The following are illustrations of that principle…: … (b)In the absence of agreement to the contrary, non-expert arbitrators must confine themselves to the evidence provided by the parties unless judicial notice would have been possible in conventional courts. The same applies to the observations and knowledge of expert arbitrators concerning facts specific to the particular dispute, any general matters that fall outside their area of expertise, and any reports or opinions obtained from others. (c)An expert arbitrator is entitled to draw on his or her knowledge and experience to supplement the facts drawn from party-sourced evidence, and without prior notice to the parties, provided that the additional facts are ones of general application as distinct from those specific to the particular dispute. (d)In general an arbitrator must provide notice of, and an opportunity to respond to, issues ideas, methods, research, investigations and/or studies of the arbitrator that were not reasonably foreseeable in the light of the arguments traversed before the arbitrator.” (b)In the absence of agreement to the contrary, non-expert arbitrators must confine themselves to the evidence provided by the parties unless judicial notice would have been possible in conventional courts. The same applies to the observations and knowledge of expert arbitrators concerning facts specific to the particular dispute, any general matters that fall outside their area of expertise, and any reports or opinions obtained from others. (c)An expert arbitrator is entitled to draw on his or her knowledge and experience to supplement the facts drawn from party-sourced evidence, and without prior notice to the parties, provided that the additional facts are ones of general application as distinct from those specific to the particular dispute. (d)In general an arbitrator must provide notice of, and an opportunity to respond to, issues ideas, methods, research, investigations and/or studies of the arbitrator that were not reasonably foreseeable in the light of the arguments traversed before the arbitrator.”
“1. Section 68(2)(d) is "designed to cover those issues the determination of which is essential to a decision on the claims or specific defences raised in the course of the reference". 2. HH Judge Humphrey Lloyd was correct in Weldon Plant Ltd v The Commission for New Towns [2001] 1 All ER (Comm) 264 to state that Section 68(2)(d) is not to be used as a means of launching a detailed enquiry into the manner in which the tribunal considered the various issues. It is concerned with a failure, that is to say where the arbitral tribunal has not dealt at all with the case of a party so that substantial injustice has resulted, eg where a claim has been overlooked or where the decision cannot be justified as a particular key issue has not been decided that is crucial to the result. It is not concerned with a failure to arrive at the right answer to an issue. 3. Arbitrators do not have to deal with every argument on every point raised; they should deal with essential issues. 4. "Deficiency of reasoning in an award is. . .the subject of a specific remedy under the 1996 Act [section 70(4) of the Act]. It is accordingly self-evident that: (1) failure to deal with an "issue" under section 68(2)(d) is not equivalent to failure to deal with an argument that had been advanced at the hearing and therefore to have omitted the reasons for rejecting it; (2) Parliament cannot have intended to create co-extensive remedies for deficiencies of reasons one of which (section 68) was a general remedy which might involve setting aside or remitting the award in a case of serious injustice and one of which (section 70(4)) was designed to provide a specific remedy for a specific problem; (3) the court's powers under section 68(2) being engaged only in a case where the serious irregularity has caused substantial injustice, the availability of the facility to apply for reasons or further reasons under section 70(4) would make it impossible to contend that any "substantial injustice" has been caused by deficiency of reasons." 5. Accordingly, section 68(2)(d) is confined in its application to essential issues, as distinct from the reasons for determining them. 6. "If one simply approaches that provision by asking whether that which has not been dealt with is capable of being formulated as an essential issue of the nature of what would be included in an agreed list of issues prepared for the purpose of a case management conference if instead of an arbitration the matters were to be determined in court, the answer should normally be obvious.”
“I do not think that it needs to be shown that the outcome of a remission will necessarily or even probably be different but it does need to be established that the applicant has been unfairly deprived of an opportunity to present its case or make a case which had that not occurred might realistically have led to a significantly different outcome.”
“It is unnecessary and in the circumstances undesirable for me to express a view as to whether the arbitrator came to the right conclusion, even if by the wrong route, or whether, had he ignored the 2003 amendments, he should have reached the same or a different conclusion. The element of serious injustice in the context of s.68 does not in such a case depend on the arbitrator having come to the wrong conclusion as a matter of law or fact but whether he was caused by adopting inappropriate means to reach one conclusion whereas had he adopted appropriate means he might well have reached another conclusion favourable to the applicant. Thus, where there has been an irregularity of procedure, it is enough if it is shown that it caused the arbitrator to reach a conclusion unfavourable to the applicant which, but for the irregularity, he might well never have reached, provided always that the opposite conclusion is at least reasonably arguable. Above all it is not normally appropriate for the court to try the material issue in order to ascertain whether substantial injustice has been caused. To do so would be an entirely inappropriate inroad into the autonomy of the arbitral process.”
“I further reject the submission that, even if none of these matters represented a serious irregularity, when taken in isolation, they do in aggregate amount to a serious irregularity. This argument is misconceived. Once it is concluded that none of the matters alone amount to an irregularity, it is logically untenable to derive an irregularity from those same matters in aggregate. Had I concluded that all of these matters taken separately represented an irregularity, albeit not a serious one, it is improbable that I should have concluded that there was an overall serious irregularity. However, it is not necessary to express a concluded view on this hypothesis.”
“As a matter of general approach, the courts strive to uphold arbitration awards. They do not approach them with a meticulous legal eye, endeavouring to pick holes, inconsistencies and faults in awards, and with the objective of upsetting or frustrating the process of arbitration. Far from it. The approach is to read an arbitration award in a reasonable and commercial way, expecting, as is usually the case, that there will be no substantial fault that can be found with it.” (2) In Fidelity Management Morison J, albeit in the context of a section 68application, referred to dicta of Lord Hoffmann in Piglowska v Piglowska[1999] 1 WLR 1360 at 1372 concerning the care with which an appellate court must approach a first instance judgment, and continued: “The need for caution when a commercial court judge is dealing with an arbitral award is that much greater, because the parties have chosen an autonomous process under which they agree to be bound by the facts as found by the arbitrators and from whose findings there is no appeal. I approach the Award on the basis of an assumption that the arbitrators understood their function and knew how to perform it.”
“ i The point of law must substantially affect the rights of one or more of the parties. This limitation exists, of course, in our present law. ii The point of law must be one that was raised before the tribunal. The responses showed that in some cases applications for leave to appeal have been made and granted on the basis that an examination of the reasons for the award shows an error on a point of law that was not raised or debated in the arbitration. This method of proceeding has echoes of the old and long discredited common law rules relating to error of law on the face of the award, and is in our view a retrograde step. In our view the right to appeal should be limited as we suggest. iii There have been attempts, both before and after the enactment of theArbitration 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 finding of fact in the award. Iv We have attempted to express in this Clause the limits put to the right to appeal by the House of Lords in Pioneer Shipping Ltd v. BTP Tioxide Ltd (The Nema)[1982] AC 724 .”
“What he said on the issue of frustration was that the judge should have accepted the decision of the arbitrator as final unless it was shown "either (i) that the arbitrator misdirected himself in point of law or (ii) that the decision was such that no reasonable arbitrator could reach." With this I entirely agree and shall explain briefly my reasons for doing so later.”
“The right of appeal to the High Court, on the other hand, under the substituted procedure for challenging an arbitrator's award which is provided by section 1 (2), viz. "an appeal ... to the High Court on any question of law arising out of" an award, is given in terms which expressly confine the appeal to questions of law; and, ever since the decision of this House 25 years ago in Edwards v. Bairstow [1956] A.C. 14, have been understood (at least where the tribunal from which such appeal lies is not itself a court of law) as bearing the precise meaning as to the function of the court to which an appeal on a question of law is brought that is stated in the classic passage to be found in the speech of Lord Radcliffe, at p. 36: "If the case contains anything ex facie which is bad law and which bears upon the determination, it is, obviously, erroneous in point of law. But, without any such misconception appearing ex facie, it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the court must intervene. It has no option but to assume that there has been some misconception of the law and that this has been responsible for the determination. So there, too, there has been error in point of law."” "If the case contains anything ex facie which is bad law and which bears upon the determination, it is, obviously, erroneous in point of law. But, without any such misconception appearing ex facie, it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the court must intervene. It has no option but to assume that there has been some misconception of the law and that this has been responsible for the determination. So there, too, there has been error in point of law."”
“Where, as in the instant case, a question of law involved is the construction of a "on-off" clause the application of which to the particular facts of the case is an issue in the arbitration, leave should not normally be given unless it is apparent to the judge upon a mere perusal of the reasoned award itself without the benefit of adversarial argument, that the meaning ascribed to the clause by the arbitrator is obviously wrong. But if on such perusal it appears to the judge that it is possible that argument might persuade him, despite first impression to the contrary, that the arbitrator might be right, he should not grant leave; the parties should be left to accept, for better or for worse, the decision of the tribunal that they had chosen to decide the matter in the first instance.”
“(1) The arbitrator ascertains the facts. This process includes the making of findings on any facts which are in dispute. (2) The arbitrator ascertains the law. This process comprises not only the identification of all material rules of statute and common law, but also the identification and interpretation of the relevant parts of the contract, and the identification of those facts which must be taken into account when the decision is reached. (3) In the light of the facts and the law so ascertained, the arbitrator reaches his decision.”
“In some cases, the third stage will be purely mechanical. Once the law is correctly ascertained, the decision follows inevitably from the application of it to the facts found. In other instances, however, the third stage involves an element of judgment on the part of the arbitrator. There is no uniquely "right " answer to be derived from marrying the facts and the law, merely a choice of answers, none of which can be described as wrong. The second stage of the process is the proper subject matter of an appeal under the 1979 Act. In some cases an error of law can be demonstrated by studying the way in which the arbitrator has stated the law in his reasons. It is, however, also possible to infer an error of law in those cases where a correct application of the law to the facts found would lead inevitably to one answer, whereas the arbitrator has arrived at another: and this can be so even if the arbitrator has stated the law in his reasons in a manner which appears to be correct -- for the Court is then driven to assume that he did not properly understand the principles which he had stated. Whether the third stage can ever be the proper subject of an appeal, in those cases where the making of the decision does not follow automatically from the ascertainment of the facts and the law, is not a matter upon which it is necessary to express a view in the present case. The Nema and The Evia show that where the issue is one of commercial frustration, the Court will not intervene, save only to the extent that it will have to form its own view, in order to see whether the arbitrator's decision is out of conformity with the only correct answer or (as the case may be) lies outside the range of correct answers. This is part of the process of investigating whether the arbitrator has gone wrong at the second stage. But once the Court has concluded that a tribunal which correctly understood the law could have arrived at the same answer as the one reached by the arbitrator, the fact that the individual judge himself would have come to a different conclusion is no ground for disturbing the award.”
“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 fact 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 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 arbitrators' award on the facts. The principle of party autonomy decrees that a Court ought never to question the arbitrators' findings of fact. From time to time attempts are made to circumvent the rule that the arbitrators' findings of fact are conclusive. Such attempts did not cease with the enactment of theArbitration Act 1979 . Subsequently, attempts were made to argue that an obvious mistake of fact by arbitrators may constitute misconduct. It is clear that such a challenge is misconceived. See Moran v. Lloyd's [1983] 1 Lloyd's Rep. 472; K/S A/S Bill Biakh v. Hyundai Corporation [1988] 1 Lloyd's Rep. 187. Then an attempt was made to argue that an obvious mistake of fact may amount to an excess of jurisdiction which would enable the Court to intervene. Again, the manoeuvre to outflank the cardinal rule that the arbitrators are the masters of the fact failed. See Bank Mellat v. GAA Development and Construction Co., [1988] 2 Lloyd's Rep. 44, at p. 52; Mustill and Boyd, Commercial Arbitration, 2nd ed., 558. Since 1979 a number of unsuccessful attempts have been made to invoke the rule that the question whether there is evidence to support the arbitrators' findings of fact is itself a question of law. The historical origin of the rule was the need to control the decisions of illiterate juries in the 19th century. It never made great sense in the field of consensual arbitration. It is now a redundant piece of baggage from an era when the statutory regime governing arbitration, and the judicial philosophy towards arbitration, was far more interventionist than it is today. Another transparent tactic is a submission that there is an inconsistency in the arbitrators' findings of fact. That is not a valid ground for an attack on an award. See Moran v. Lloyd's, sup., at p. 475. Parties sometimes resort to a more oblique way of challenging arbitrators' findings of fact: the Court is asked to draw reasonable inferences from the arbitrators' findings of fact. The purpose is often to put forward a new legal argument which was never advanced before the arbitrators. But it is contrary to well established principle for the Court to draw inferences from findings of fact in an award on the basis that it would be reasonable to do so. The only inferences which a Court might arguably be able to draw from arbitrators' findings of fact are those which are truly beyond rational argument. It is, however, by no means clear that it is permissible even in such a seemingly clear case for a Court to draw inferences of fact from the facts set out in the award. See Mustill and Boyd, op. cit. 600. This catalogue of challenges to arbitrators' findings of fact points to the need for the Court to be constantly vigilant to ensure that attempts to question or qualify the arbitrators' findings of fact, or to dress up questions of fact as questions of law, are carefully identified and firmly discouraged.”
“33. I turn now to the second ground of appeal set out in the claim form. As formulated, this ground is hopeless. It does not satisfy any of the requirements set out insection 69 of the Arbitration Act 1996 . This ground of appeal has, however, been reformulated and burnished by Mr Brown in his oral submissions, as summarised in part 3 above. That is the formulation upon which I must focus. In relation to this ground, it should be noted that the arbitrator directed himself correctly concerning the burden of proof. In para 15(1) of his award, the arbitrator said this: I accept that Guardian bears the burden of proof in establishing first, that a variation under the contract has occurred and second, what is its entitlement to extra payment. 34. Nevertheless, Mr Brown argues, the arbitrator did not proceed thereafter in accordance with his own correct direction of law. Mr Brown relies upon the decision of the House of Lords in Rhesa Shipping Co SA v. Edmunds[1985] 1 WLR 948 . In that case the House of Lords held that where there was no satisfactory evidence on a particular point, the party bearing the burden of proof should fail in respect of that point. See the speech of Lord Brandon at pages 955 to 956. It should be noted that Lord Fraser, Lord Diplock, Lord Roskill and Lord Templeman all expressed agreement with Lord Brandon’s speech. 35. I accept, of course, the propositions of law established in Rhesa Shipping..”
“…the judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative of saying that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden. No judge likes to decide cases on burden of proof if he can legitimately avoid having to do so. There are cases, however, in which, owing to the unsatisfactory state of the evidence or otherwise, deciding on the burden of proof is the only just course for him to take.”
“The evidence, generally does establish further breaches of LUL’s obligations after31 October 2001 . The evidence also shows that those breaches caused both further delay and disruption… I have a strong suspicion that the more exhaustive process of arbitration may conclude that the extension of time already granted…is not, for Delay Events occurring after31 October 2003 , sufficient.”
“In the Claim Period, LUL were repeatedly in breach of the LUL Obligations, and exercised the LUL Rights, as set out below, so that the CTL was prevented or delayed from complying with each of the extended Milestone Dates set out in the ICR, and prevented from achieving the Target Dates in Schedule 6 of the Contract.”
“LUL were in breach of the LUL obligations in that they: (a) failed to carry out EBW in accordance with the requirements of programme UD7, or within any reasonable time scale. … (a) failed to carry out EBW in accordance with the requirements of programme UD7, or within any reasonable time scale. … (h) failed to provide power supplies when required.”
“(b) A supply of electricity is essential to (inter alia) commissioning of the EPC works. Appendix 31 shows that no power was available by the end of 2003, so that no commissioning could have possibly taken place in the Claim Period, although the Corporate Line should have been commissioned and completed by November 2003. (c)…The actual date on which power was supplied is irrelevant since the breach complained of is that power was not made available at all in the Claim Period.”
“In any complex project with thousands of activities and multiple end dates, the assessment of the impact on an end date of any given event or series of events is necessarily a matter of judgment. LUL correctly note in paragraph 8.27 of the Amended Defence that the Amended[Consolidated Statement of Claim] contains four approaches to the assessment. The four approaches are different but all demonstrate the validity of CTL’s claim for an extension of time. LUL criticises the methods put forward by CTL for not being scientific but they nowhere say that the methods do not produce a reasonable assessment of the extensions due. Furthermore a principal point relied upon by LUL appears to be that CTL cannot succeed in its claim for extension of time unless it proves the effect of individual delay events on CTL’s ability to comply with its obligations, and unless a separate notice has been given in relation to each individual delay event (see paragraph 8.74 of the Amended Defence). If that is LUL’s case it is denied. On the true construction of the contract as a matter of law, the Arbitrator is entitled to make an assessment of the composite effect of multiple events, which are the responsibility of LUL, on the ability of CTL to perform its obligations and, further to apportion liability for delay between those events for which LUL is responsible and those for which CTL is responsible”
“This is a simple, but I submit a powerful point. No line could be commissioned unless the Corporate Line had been commissioned. The Corporate Line, and indeed every other line, could not have been commissioned without permanent power being supplied by LUL. That was part of the EBW. No permanent power was supplied during the claim period”
“It is very important at this stage to be clear about your role and the way in which the evidence should be viewed. Your role, as both parties recognise, at the end of the day, is to decide whether or not on an interim basis it would be fair and reasonable to grant an extension of time, and if so, what extension of time. It is perfectly possible that at the end of the evidence you might say, “I do not much like any of the four ways in which the case is put”, to use Mr White’s characterisation of it, “but there are elements of truth in each one”
“…CTL tend to elide two separate questions. The first is whether analysing a pleaded claim for an extension of time, taking into account the evidence that is relied upon to support that, it is open to you to reach any other conclusion than the pleaded period of delay is made out or not. The second question, which is having reached the conclusion that each and every pleaded basis of claim, and the facts which are relied upon to support that claim, fail and you are not in a position to award any extension of time on any of those bases, it is open to you to create, by reference to the evidence, some other basis. In relation to the first and quite distinct proposition, we wholly accept that when you are considering a pleaded claim, the analysis contained in paragraphs 87 to 95 of the amended consolidated statement of claim, when you are working through the critical locations, you may say: this delay was caused by a delay event in the period alleged or a lesser period, and arrive at a conclusion on that basis. It is equally possible that you may look at Ms. Ramey’s analysis and say: well having rejected CTL’s analysis, there are some parts of Ms Ramey’s analysis that have attraction. But what you cannot do is embark upon a wholly new separate and different inquiry. The restriction that we seek to impose is a restriction upon the second exercise which I have identified, which is having rejected all and reached the conclusion that none are sustainable, it is open to you to consider the case on some hitherto un- pleaded basis. It is important to keep those two points quite separate.”
“Cause and Effect: Whether Laing Management (Scotland) Ltd v John Doyle Construction Ltd[2004] BLR 295 , paragraphs 14 to 19 offer any assistance.”
“36. The logic of a global claim demands, however, that all the events which contribute to causing the global loss be events for which the defender is liable. If the causal events include events for which the defender bears no liability, the effect of upholding the global claim is to impose on the defender a liability which, in part, is not legally his. That is unjustified. A global claim, as such, must therefore fail if any material contribution to the causation of the global loss is made by a factor or factors for which the defender bears no legal liability ... The point has on occasion been expressed in terms of a requirement that the pursuer should not himself have been responsible for any factor contributing materially to the global loss, but it is in my view clearly more accurate to say that there must be no material causative factor for which the defender is not liable. 37. Advancing a claim for loss and expense in global form is therefore a risky enterprise. Failure to prove that a particular event for which the defender was liable played a part in causing the global loss will not have any adverse effect on the claim, provided the remaining events for which the defender was liable are proved to have caused the global loss. On the other hand, proof that an event played a material part in causing the global loss, combined with failure to prove that that event was one for which the defender was responsible, will undermine the logic of the global claim. Moreover, the defender may set out to prove that, in addition to the factors for which he is liable founded on by the pursuer, a material contribution to the causation of the global loss has been made by another factor or other factors for which he has no liability. If he succeeds in proving that, again the global claim will be undermined. 38. The rigour of that analysis is in my view mitigated by two considerations. The first of these is that while, in the circumstances outlined, the global claim as such will fail, it does not follow that no claim will succeed. The fact that the pursuer has been driven (or chosen) to advance a global claim because of the difficulty of relating each causative event to an individual sum of loss or expense does not mean that after evidence has been led it will remain impossible to attribute individual sums of loss or expense to individual causative events. The point is illustrated in certain of the American cases. The global claim may fail, but there may be in the evidence a sufficient basis to find causal connections between individual losses and individual events, or to make a rational apportionment of part of the global loss to the causative events for which the defender has been held responsible. 39. The second factor mitigating the rigour of the logic of global claims is that causation must be treated as a common sense matter ... That is particularly important, in my view, where averments are made attributing, for example, the same period of delay to more than one cause.”
“It is accordingly clear that if a global claim is to succeed, whether it is a total cost claim or not, the contractor must eliminate from the causes of his loss and expense all matters that are not the responsibility of the employer. This requirement is, however, mitigated by the considerations discussed by the Lord Ordinary at paras 38 and 39 of his opinion. In the first place, it may be possible to identify a causal link between particular events for which the employer is responsible and individual items of loss.” (2) In paragraph 15: “In the second place, the question of causation must be treated by ‘the application of common sense to the logical principles of causation’: John Holland Construction & Engineering Pty Ltd v Kvaerner R J Brown Pty Ltd (per Byrne J at p 84I); Alexander v Cambridge Credit Corp Ltd; Leyland Shipping Co Ltd v Norwich Union Fire Insurance Society Ltd (per Lord Dunedin at p 362).” (3) In paragraph 16: “In the third place, even if it cannot be said that events for which the employer is responsible are the dominant cause of the loss, it may be possible to apportion the loss between the causes for which the employer is responsible and other causes.”
“CTL do not suggest that their claim is a “global” or “total cost” claim of the type discussed by the Court. However CTL’s claim has similarities because on CTL’s case the delays in the Claim period were overwhelmingly caused by one major factor, namely the late completion of EBW. The issue between the parties identified by paragraph 8.20 of the Defence is whether the late completion of EBW (which is prima facie the contractual responsibility of LUL) was in fact caused by matters for which CTL is contractually responsible. CTL say that on the evidence paragraph 8.20 is not made out. However it might be that the Arbitrator will conclude that matters for which CTL is contractually responsible were a contributory cause of late completion of EBW-if so paragraph 17 of the judgment would justify an apportionment to be carried out on a percentage basis (as indeed LUL’s internal assessments contemplated).”
“What the arbitrator did was construct a case on his own initiative, which was different from and inconsistent with the case which CTL had advanced, and wrote his Award on this basis without giving LUL any warning that he was adopting this course, or any opportunity to address him on it. This amounts to a serious irregularity from which LUL has suffered and will continue to suffer substantial injustice. That injustice includes not just the amounts which were awarded in the arbitration, but further sums consequential upon it as a result of increased payments which will amount to a sum running to tens of millions. CTL rendered an invoice for£23m following the Award.”
“Corporate Line: Commissioning was held up throughout most of the Claim Period by lack of a permanent power supply to most of the stations. Where a power supply was provided in the middle of 2003, commissioning could not be completed because of foundation problems at Liverpool Street and because of the late completion of EBW at Brixton….”
“In the event, commissioning of the Corporate Line was held up throughout most of the Claim Period by the lack of a permanent power supply (the dates on which LUL forecast power would be provided progressively slipped). In mitigation, CTL began installing the equipment before the EBW was complete.”
“In breach of the Corporate Power obligation LUL failed to supply power to Edgware Road for the Corporate Line until18 July 2003 , holding up completion of work, including commissioning, until after that date. Power should have been available for the Contract duration; alternatively by the date for power at this location in UD07; alternatively to the reasonable requirement of CTL (Clause 59.1).CTL reasonably required power so that it could complete its work at Edgware Road by18 January 2003 .”
“…it was CTL’s case, well known to LUL and clearly placed before the Arbitrator: a) That LUL were in breach of the Corporate Power obligation; b) That commissioning [of the Corporate Line] could not take place until power had been supplied to all Core CERs; c) That commissioning of the Corporate Line was on the critical path for the project in respect of all lines; d) That provision of power to the Core CER at Edgware Road did not take place until the18th July 2003 .”
“In these circumstances, it seems to me to be right that I should consider whether it may be possible, as was contemplated in the John Doyle case, to identify a causal link between some of the events for which LUL is responsible and the delays which were encountered. In doing so, I think it right to confine myself to breaches of obligation and exercises of right on the part of LUL which remain open to CTL in the light of my rulings on the pleading point set out above. I also think it right to confine myself to aspects of the progress of the work which LUL have had a reasonable opportunity to investigate and explore in the evidence.”
“Nevertheless, in the light of the John Doyle case, I take the view that it is open to me to consider whether the absence of power accounts for part of the delay.”
“Whether, within the claim period, there was any work which was ready for commissioning but could not be commissioned and therefore was delayed due to an absence of power.”
“the case on power was pleaded, it was explored in evidence and was treated as a live issue throughout the hearing and in closing submissions. In these circumstances, approaching the case in a commonsense way, it seems to me to be right to have regard to it.”
“For these reasons, I think it right to hold that LUL’s breach of the Corporate Power Obligation at Edgware Road had the effect of delaying progress on the Corporate Line by 48 weeks.”
“Apart from that breach, I have in Section (E) above, held that LUL was in breach of a number of the other obligations upon which CTL relies. I refer to the summary in Appendix E. I have reviewed those breaches in the light of my findings earlier in this Section (F). The breaches in question were, in my view, such as were likely to give rise to delay. But on the material before me and in the light of my findings about the critical path analysis, it is difficult to assess whether such delay would, or could have been critical. In looking at this aspect of the case, I have taken into account the fact that the various activities with which I am concerned were, in the main, such as could be carried out in any order. I have also taken into account that, on the conclusions which I have reached, the evidence before me offers no satisfactory basis for measuring how much delay was occasioned by the breaches in question. I have sought to apply to this aspect of the case a commonsense approach, as proposed by the Inner House of the Court of Sessions in the John Doyle case. Nevertheless, I am driven to the conclusion that the material before does not establish further delay arising out of the breaches in question beyond the 48 weeks to which I have already referred.”
“368. Were the background different, it seems to me that I should have to think long and hard before concluding that it was fair or reasonable to grant CTL a long extension of time of as much as 48 weeks merely on the basis of the single breach related to Edgware Road to which I have referred, even though there were other breaches which may have given rise to concurrent delay. However taking the background into account, I have no hesitation in concluding that it is fair and reasonable to grant a substantial extension. I hold that CTL is entitled to an interim extension of time under Clause 31.7 of the Contract to reflect the 48 weeks of delay to which I have referred. 369.
“All that is required is that a party's averments should satisfy the fundamental requirements of any pleadings, namely that they should give fair notice to the other party of the facts that are relied on, together with the general structure of the legal consequences that are said to follow from those facts. In doing that, the pleadings of one party should disclose sufficient to enable the other party to prepare its own case and to enable the parties and the court to determine the issues that are actually in dispute. The relevancy of pleadings must always be tested against these fundamental requirements. In a case involving the causal links that may exist between events having contractual significance and losses suffered by the pursuer, it is obviously necessary that the events relied on should be set out comprehensively. It is also essential that the heads of loss should be set out comprehensively, although that can often best be achieved by a schedule that is separate from the pleadings themselves. So far as the causal links are concerned, however, there will usually be no need to do more than set out the general proposition that such links exist. Causation is largely a matter of inference, and each side in practice will put forward its own contentions as to what the appropriate inferences are. In commercial cases, at least, it is normal for those contentions to be based on expert reports, which should be lodged in process at a relatively early stage in the action. In these circumstances there is relatively little scope for one side to be taken by surprise at proof, and it will not normally be difficult for a defender to take a sufficiently definite view of causation to lodge a tender, if that is thought appropriate. What is not necessary is that averments of causation should be over-elaborate, covering every possible combination of contractual events that might exist and the loss or losses that might be said to follow from such events.”
“LUL failed to provide power to Edgware Road for the Corporate Line until18 July 2003 , holding up completion of work including commissioning until after that date.”
“I therefore regard CTL’s submission that the Connect Project is not best suited to analysis by the Critical Path Method as being well-founded.”
“Update No 7 and its logic and dependencies were agreed with you in the claim resolution reflected in your letter of14 December 2001 ”. ” “Update No 7 and its logic and dependencies were agreed with you in the claim resolution reflected in your letter of14 December 2001 ”. ”
“Update No 7 and its logic and dependencies were agreed with you in the claim resolution reflected in your letter of14 December 2001 [i.e. the ICR].”
“(1) Even though they no doubt represented LUL’s proposed dates, there is no obvious reason to suppose that LUL was offering to become contractually bound by them. (2) Whilst it is clear that the revised Milestones Dates in UD07 were agreed between the parties as part of the ICR, there is nothing in the ICR to suggest that any of the other dates in UD07 were agreed. (3) As I have already indicated, when read in context, the passage from Mr Brockbank’s letter dated10th May 2002 relates, in my view, not to the programming of the EBW installation but to the programming of the EPC installation. Having regard to these matters, I am unable to accept CTL’s submission that the dates for the completion of the EBW set out in the UD07 were agreed.”
“At the time of drafting the Grounds of Appeal, it appeared that the Arbitrator might have intended to hold that the cause of departures from UD07 was in some way the responsibility of CTL - hence paragraphs 11(c) and 12 of the Grounds of Appeal. However in the “Corrections to the Second Interim Award” the Arbitrator has not suggested that this was in fact his intention. The natural inference from his silence and from the absence of any evidence to support such a finding is that he did not intend to find and did not find that the CTL were in any way responsible for: a) the delays to the first 12; b) the decision to enable the Priority 20 in 2002; c) the delays to the Priority 20. On this basis it appears that paragraph 12 of the Grounds of Appeal is unnecessary unless it be suggested by LUL that the Arbitrator should be understood to have decided that delays to the First 12 and to the Priority 20 Stations were in some way the responsibility of CTL. No such suggestion is made in the Submission served by LUL last Tuesday (20th March).”
“As explained earlier CTL has suggested that this positive case cannot succeed because LUL has not analysed progress at a particular station or stations to demonstrate the effect which the EPC design has on the EBW. But such a comment is to mis-characterise this positive case. The positive case pleaded in paragraph 8.20 is a much more general point and does not depend upon demonstrating the progress of EBW was delayed at specific locations.”
“CTL is highly critical of LUL’s performance in relation to Network Rail’s Approvals. In its closing submissions, CTL points out that the GWA by Clause 4.33 obliged Network Rail to respond to technical proposals submitted by LUL on behalf of CTL (called “Works Documents” on receipt. The submissions include the following passage: LUL took no steps to persuade Network Rail to comply with its obligations either before or after the GWA was entered into. Had the GWA been executed more quickly LUL might have had greater power to do so. However, despite these criticisms, CTL does not put its case in respect of Network Rail approvals on the basis of a failure to implement the GWA or even upon failure to conclude the GWA earlier.”
“was the Arbitrator wrong in law in failing to hold that the dates in "UD07" were agreed by LUL?” and another: “did the Arbitrator err in law in holding in paragraph 137 of the Award that the "CMS obligation" only amounted to an obligation on the part of LUL to act with due diligence in providing the requisite cable mounting infrastructure?”
“The Court should be satisfied that justice dictates that there should be an appeal; and in considering what justice requires, the fact that the parties have agreed to arbitrate rather than litigate is an important and powerful factor.”
“Having decided that CTL failed to keep to dates in UD07 for the production of designs, he should have decided that to the extent that that prevented LUL from doing their enabling works, LUL was not in breach; but instead he decided that CTL's failure had the effect that there was no obligation on LUL to do its enabling works in accordance with UD07.”
“I therefore hold that LUL has made out many of the points put forward in support of its contention that it was not reasonable to expect LUL to complete the EBW by the dates set out in UD07.”
“did the Arbitrator err in law in holding in paragraph 137 of the Award that the "CMS obligation" only amounted to an obligation on the part of LUL to act with due diligence in providing the requisite cable mounting infrastructure?”
“LUL shall make available to the Contractor for the Contract Duration cable mounting infrastructure of sufficient structural integrity and capacity to carry cabling required by the New System save that the Contractor shall provide cable clips which attach to existing cable mounting infrastructure where sufficient capacity is not available.”
“(b) This LUL obligation was absolute but was relaxed to the extent that dates for completion of EBW were provided in UD07. CTL would not hold LUL liable for not complying with this obligation before such date. (c) Alternatively the dates for the completion of EBW in UD07 were agreed dates. LUL would not be liable for failing to meet this obligation before such date. (d) Alternatively, LUL should have with due diligence complied with the said obligation when CTL reasonably required it (which would be after CTL had identified the cables and their proposed route under Clause 59.1).”
“I hold that the CMS Obligation amounted to an obligation on the part of LUL to act with due diligence in providing the requisite cable mounting infrastructure.”
“did the Arbitrator err in law in holding in paragraph 190 of the Award that the "Resolution Document" imposed HVAC/HV obligations only upon CTL EPC?”
“LUL to procure, install and take ownership of all air conditioning units in all CEC rooms, existing CERs and CER conversions (other than core CERs)”
“Given that this wording imposes HVAC obligations only upon CTL EPC, I am unable to accept CTL's submission that LUL was to provide positive ventilation in CERs or to provide HVAC in all CECs, CERs and CER conversions.”
“Augment HVAC in existing CERs containing LUL equipment to maintain temperature limits to CER Standard.”
“The project is continuing and there is already a second arbitration which is to be heard later this year relating to events in 2004/2005. The errors which the Arbitrator has made are having and will have a substantial effect on CTL’s rights to payment both in completion of the project and in the forthcoming arbitration.”
“did the Arbitrator err in law in holding in paragraph 235 of the Award (in the context of the sequence in which the works were to be carried out) that "delay was liable to ensue if there was material departure from the [UD07] programme"?”
“did the Arbitrator err in law in paragraphs 267, 268 and 298 of the Award in declining to consider breaches on the part of LUL or to award any extension of time in respect of the EBW at Bank/Monument station upon the grounds that a hold put on approval of a Service Delivery Point at that station was contained in a letter dated30 October 2001 , before the Claim Period which was the subject of the arbitration?”
“did the Arbitrator err in law in holding in paragraph 286 of the Award that in respect of delays to the Jubilee Line prior to20 December 2002 , CTL had not made out its case because CTL had failed to establish an acceptable yardstick by which to measure the progress which LUL ought to have achieved?”
“On the first issue, I am driven to conclude that CTL has not made out its case because, for reasons already given, I take the view that it has failed to establish an acceptable yardstick by which to measure the progress which LUL ought to have achieved.”
“In respect of the period prior to the issue of VN 228 on20th December 2002 , the issue is whether LUL failed to proceed with due diligence in implementing the EBW.”
“did the Arbitrator err in law in holding in paragraph 288 of the Award that in respect of delays to the Jubilee Line after20 December 2002 , LUL was not in breach of its obligation in Clause 59.1 to perform the EBW with due diligence because it did nothing in anticipation of a change to the Contract which it wanted or needed to order by way of a Variation?”
“Given the anticipation of the issue of VN 228, I am unable to accept that LUL can be said to have acted unreasonably.”
“In respect of the period [after20th December 2002 ], the issue is whether the expectation that VN 228 would be issued in due course rendered LUL’s inactivity on the EBW front unreasonable.”
“did the Arbitrator err in law in holding in paragraph 330(7) of the Award that he should make a reduction of 13 weeks from the award of 61 weeks which he would otherwise have granted because of a potential saving in the time to be taken for Corporate Line commissioning at handover?”
“the Arbitrator having held in paragraphs 259 and 260 of the Award that LUL was in breach of the SDP space obligation so that the EBW at Camden Town was not completed until13 July 2005 , did he err in law in failing to grant any extension of time in respect of that breach?”
“the Arbitrator having held in paragraph 272 that LUL were in breach of the asbestos obligation is not removing or treating the asbestos problem at Warren Street before the end of the Claim Period, did he err in failing to grant any extension of time in respect of that breach?”
“the Arbitrator having held in paragraphs 274 - 275 that LUL was in breach of the information obligation in that information in respect of Willesden Green which should have been released by1 November 2001 was not provided during the course of the Claim Period, did he err in law in failing to grant any extension of time in respect of that breach?”
“the Arbitrator having held in paragraphs 293 and 294 that LUL was in breach of the approval obligation in respect of the B3(1) Pack for Wembley Park throughout the Claim Period, did he err in law in failing to grant any extension of time in respect of that breach?”