Important Guidance as to circumstances in which an Arbitral Award will be upheld by the Family Court

by Kathryn Coyle on March 2, 2016

Our Managing and Matrimonial Partner, Kathryn Coyle at our Maidenhead office represented the Husband in this significant case which considers the link between the Family Law Arbitration Scheme and the Arbitration Act 1996 and how that Statute fits in with s 25 of the Matrimonial Causes Act 1973 and the Agreement cases in Family Law. The Court also reviewed the cases involving Barder events, Mistake and Due Diligence.

The Husband’s legal team led by Martin Pointer QC (1 Hare Court) successfully represented the Applicant Husband in this case, in which the Wife sought to resile from the Arbitral Award made, following a 3 day Arbitration hearing, despite her having earlier signed the ARB1 agreeing to be bound by the decision of the Arbitrator.

Mostyn J gave a full and comprehensive Judgment on Husband’s Notice to Show Cause Application, which can be read here, in which he set out the history of Family Law in England and Wales and the Institute of Family Law Arbitration Scheme (IFLA Scheme) and concluded:

“27……However, I do agree with Mr Pointer QC that when exercising its discretion following an Arbitral award the Court should adopt an approach of great stringency, even more so that it would be in an agreement case. In opting for arbitration, the parties have agreed a specific form of alternative dispute resolution and it is important that they understand that in the overwhelming majority of cases the dispute will end with the arbitral award. It would be the worst of all worlds if parties thought that the arbitral process was to be no more than a dry run and that a rehearing in Court was readily available.”

Various points have emerged from this ground-breaking case.

  1. If, following an arbitral award evidence emerges which would, if the award had been in an Order of the Court, entitle the Court to set aside the Order on the grounds of mistake or supervening event, then the Court is entitled to refuse to incorporate the arbitral award in its Order and instead to make a different Order reflecting the new evidence. Outside the heads of correction, challenge or appeal within the 1996 Act these would appear to be the only realistically available grounds of resistance to an incorporating order. An assertion that the award was “wrong” or “unjust” will almost never get off the ground; in such a case the error must be so blatant and extreme that it leaps off the page.
  2. The Judge went on to say that the ARB1 should be amended to include reference to the limited grounds upon which a party can resile from an Award. He also gave guidance on how such an application should be dealt with in future. Any Notice to Show Cause why an Arbitration Award should not be made an Order of the Court should be issued in the High Court, or if outside London before the Family Division Liaison Judge.
  3. The Court also held obiter that Barder applications no longer need to be made by way of appeal; they can be made to the original Court.