A Correction or A Change of Mind? Correcting Errors in Arbitration Awards.

November 17, 2020 Posted by:

Written by Andrzej Bojarski

Before delivering a written reserved judgment it is common practice for a judge to send out a version to the parties in draft, inviting the parties to points out any necessary amendments or corrections or to identify any matters raised by the parties which have not been dealt with in the judgment. The practice stems from the well-established principle that a judge has the power to reconsider a decision before an order is drawn up (see Re Barrell Enterprises [1973] 1 WLR 19 and Re L-B (Reversal of Judgment) [2013] 2 FLR 859).

Although it seems that many IFLA family law arbitrators follow the same practice with family arbitration awards it is doubtful that the principles apply in the same way to arbitration as they do to the court process. The Arbitration Act 1996 governs arbitration awards and the Act refers only to an ‘award’, without any reference to a ‘draft’ or ‘provisional’ award. Accordingly, when an arbitrator sends out his or her award to the parties, whether marked as draft or not, or whether signed or not, it seems like that he or she has made the award within the terms of the Act.

However, s.57 of the Act provides as follows:

the tribunal may on its own initiative or on the application of a party..correct an award so as to remove any clerical mistake or error arising from an accidental slip or omission or clarify or remove any ambiguity in the award …”.

Is this a very narrow power in line with the ‘slip rule’ in the Family Procedure Rules at 29.16 or is it something broader, closer to the power to reconsider an award as a judge may reconsider a judgment? It seems that it is actually something in between.

In the recent case of Rees v Windsor-Clive [2020] EWHC 2986 (Ch) the arbitrator misunderstood the evidence before him and decided that a tenancy notice to quit was invalid when the evidence showed that it was valid. The mistake was pointed out after he delivered his award and he corrected the award to state that the notice was valid. The tenant appealed on the basis that this was a misuse of the s.57 power, in that what the arbitrator had done amounted to a reconsideration of the substantive decision rather than merely the correction of an error in expressing the tribunal’s reasoning.

The Deputy High Court judge hearing the appeal considered the matter as follows:

29.   [The arbitrator] purported to make that change under section 57(3)(a) of the 1996 Act which provides that:

“The tribunal may on its own initiative or on the application of a party.. correct an award so as to remove any clerical mistake or error arising from an accidental slip or omission or clarify or remove any ambiguity in the award …”

30.   Mr Peters submits that such an accidental slip or omission must be an error affecting the expression of the tribunal’s thought, rather than being an error in the tribunal’s thought processes, and this provision does not entitle the tribunal to reconsider a decision once it has been made. He cites Russell on Arbitration 24th edition (2015), paragraphs 6-167 – 6-169, to that effect. He submits that this is an irregularity within section 68(1)(b) of the 1996 Act which has caused the tenant substantial injustice, namely that the original finding that the notice was invalid has been wrongly substituted with a finding that it is valid.

31.   Ms Holland QC submits that the reference in Russell does not restrict the test in the way which Mr Peters submits but makes an observation that this is the position “in general.” However, she then goes on to cite authority which she says shows that the power is wide enough to allow the correction of a perceived fact.

32.   After a review of the authorities in Mutual Shipping Corp of New York v Bayshore Shipping Co of Monrovia [1985] 1 WLR 625 , Robert Goff LJ said at 637:

I do not think that it would be right for me to attempt in this judgment to define what is meant by ‘accidental slip or omission’: the animal is I suspect usually recognisable when it appears on the scene”

33.   In Gannet Shipping Ltd v Eastrade Commodities Inc [2002] 1 Lloyds Rep 713 , a failure to use an agreed figure for demurrage was held to be an accidental slip. Langley J said at paragraph 19:

[the Arbitrator] wrote what he intended to write but he was mistaken in the substance of what he wrote. Even if that could be described as a ‘clerical mistake’, it was I think, in common parlance, an accidental slip or at least also an accidental slip. It

was also because it was wrong. It was accidental because he did not mean to use the wrong figure and he misread some manuscript amendments…”

34.   In the present case, the arbitrator said in his letter of 21 January 2020 accompanying the corrected award that when reading the notice to quit served in respect of the 1965 tenancy land he “overlooked and did not consider the wording” of the notice insofar as it related to the extent of the land and the subject of the notice. He described this as an accidental slip or omission.

35.   In Axis v M&E UK Limited & Multiplex Construction Europe Limited [2019] EWHC 169 (TCC) , Roger ter Haar QC, sitting as a Deputy Judge, said at paragraphs 50 and 51:

50. Once the door had been opened to correct the initial error, then the effect of that decision permitted and indeed, in the interests of justice, required, that any errors consequent on the correction of that gateway error to be made.

51. I see no relevant distinction between that situation under arbitration law and the present situation where the correction of what I have called the gateway error required consequential corrections to be made”

36.   I do not accept Mr Peters’ submission that what the arbitrator did in this case was to review his original decision. He overlooked and did not consider the wording of the notice as to the extent of the land to which it related. In my judgment that was an accidental slip within the meaning of section 57(3)(a) of the 1996 Act which empowered him the correct it in the way that he did. 

The above is a useful summary of the case law and principles for parties to an arbitration and an arbitrator to have in mind. The power to correct an award clearly has ill-defined and flexible boundaries. Generally speaking, in most cases arbitrators and parties will find an error capable of correction to be ‘usually recognisable when it appears on the scene’ but there will be cases where it will be less clear. In those cases it must be remembered that an arbitrator’s power to change his or her mind is narrower than that of a judge. The decision in Rees v Windsor-Clive is useful clarification that the power extends to an accidental oversight of relevant evidence, or a misunderstanding of the evidence, not merely to a clerical or typographical slip.