North Range Shipping
The Court of Appeal has given guidance to Commercial Court judges on giving reasons for a refusal of leave to appeal to the High Court from the decision of arbitrators. In doing so the court has held that the decision of the House of Lords in The Antaios  AC 191 no longer holds good, although the new guidelines only represent a "modest change in procedure".
Case Note based on an Article in the April 2002 Edition of the ‘Bulletin’, published by the Marine and Insurance teams at the international firm of lawyers, DLA.
DMC Category Rating: Reversed
Background to the decision
Section 69 of the Arbitration Act 1996 restricts the circumstances in which a party can apply for leave. Firstly, unless the parties agree otherwise, the appeal must be on a point of law. Secondly, the court has to give leave and will only do so if satisfied:
Does the court have to give reasons for refusing leave to appeal? The House of Lords in The Antaios said the court should follow its own practice and say no more than that leave was granted or refused. In refusing leave in the present case, David Steel J., the judge at first instance, had given brief reasons in accordance with his own normal practice. He was asked to reconsider his decision but declined to do so, adding that he did ‘not propose to add to the short reasons’ that he had given in writing. He also refused leave to appeal to the Court of Appeal, without giving any reasons for his decision.
The applicant argued that the judge’s failure to give reasons (or adequate reasons) was a breach of the applicant’s right to a fair hearing under the Human Rights Act, in particular under s.6 of the Convention
In a similar case decided shortly after this one (Mousaka Inc v Golden Seagull Maritime Inc  1 WLR 395), the same judge had followed the guidelines given in the Antaios and simply referred to the statutory criteria without giving reasons for his judgment at all, although he noted that there was a substantial variation in practice amongst commercial judges on the point. An appeal on Mousaka was due to be head at the same time as this one, but the case settled. By the time of this hearing, however, the Court of Appeal was aware of at least one other case raising the same question.
The first issue was a technical one; whether the Court of Appeal had jurisdiction to hear an appeal from a refusal to give leave to appeal. There could be no appeal on the judge’s refusal to give leave on the merits (Henry Boot Construction (UK) Limited v Malmaison Hotels  QB 388), but the Court accepted it had a residual jurisdiction to set aside a judge's decision for misconduct and for unfairness. This would not involve a challenge to the correctness of the judge’s decision on the merits, but enabled the court to look at whether the process by which the judge reached his decision was unfair and contrary to the Human Rights Act.
The next question was whether the failure to give reasons was in breach of the right to a fair hearing. Cases before the European Court of Human Rights demonstrated that, while a right to a fair hearing does not guarantee a right to appeal, it generally carries with it an obligation to give reasons for the decision (e.g. Hiro Balani v Spain 19 EHRR 566).
Against this background, the Court of Appeal concluded that the Antaios guidelines did not hold good. Section 69(3) sets out a variety of threshold tests. At the very least, an unsuccessful applicant for leave should be told which of those tests he had failed. In almost all cases where the appeal is not on a question of law, or where the applicant fails to pass tests 69(3)(a) or (b), the judge would need to do no more than simply identify which of the thresholds the applicant had failed.
In cases where the applicant alleged the tribunal's decision was obviously wrong or open to serious doubt, however, the position was more difficult and, in some cases, further reasons would be appropriate, but these need only be brief so as to show the losing party why he has lost. In the instant case, the court was satisfied that the judge had given adequate reason for his decision
The Court of Appeal felt that this change in practice would bring the procedure into line with the Human Rights Act without comprising the need for finality in arbitration. It was confident that Commercial Court judges were sufficiently astute to resist unfounded applications for further reasons, and promised that the Court of Appeal would play its part by refusing permission to appeal in anything other than the very plainest case.
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