Court of Appeal
Published April 13,2007
Sumukan Ltd v Commonwealth Secretariat
Before Sir Anthony Clarke, Master of the Rolls, Lord Justice Waller and Lord Justice Sedley
Judgment March 21, 2007

The Court of Appeal had jurisdiction to determine an appeal from a judge’s decision on whether the parties to an arbitration agreement had agreed to exclude an appeal to a court on a point of law under section 69 of the Arbitration Act 1996.

The Court of Appeal so held, inter alia, dismissing the application of the defendant, the Commonwealth Secretariat, to set aside permission to appeal granted by Lord Justice Rix to the claimant, Sumukan Ltd, against the decision of Mr Justice Colman ([2006] EWHC 304 (Comm)) that the parties had agreed on the exclusion of a right of appeal to the courts from an arbitration award.

Mr Anthony Speaight, QC and Ms Kate Livesey for Sumukan, instructed under the Bar Council’s public access rules; Mr Colin Nicholls, QC and Mr Tom Poole for the Commonwealth Secretariat.

LORD JUSTICE WALLER, giving the judgment of the court, said that it was common ground that in all the subsections in the 1996 Act which required the court’s leave to bring an appeal to the Court of Appeal, that “court” was the first instance court.

Mr Speaight argued that a decision that the parties had entered into an exclusion agreement, which precluded the court having jurisdiction to consider whether to grant leave to appeal and thus prevented the actual hearing of an appeal on a point of law, was neither a “decision of the court to grant leave or to refuse leave to appeal” within section 69(6) nor “the decision of the court” from which “no such appeal lies without leave of the court” within section 69(8).

Because it was a decision as to whether section 69 was to apply or not, it was not a decision under section 69 at all.

The court accepted Mr Speaight’s submissions and held that the Court of Appeal did have jurisdiction. There was a distinction between a decision as to whether the parties had agreed to exclude the court and, if they had not, the decision as to whether to grant or refuse permission to appeal.

Until the court had decided whether there was an exclusion agreement it did not, in fact, proceed to the considerations relevant to the issue of whether permission to appeal should be refused or granted.

The language of the order made by Mr Justice Colman accurately reflected the decision of the court declaring that an exclusion agreement had been made.

The question whether there was an exclusion agreement was a preliminary issue under section 69(1). Despite Mr Justice Colman having refused permission to appeal, the Court of Appeal had jurisdiction.

The judge had held that as a matter of English domestic law, by reference to the statute, in the arbitration clause, the parties had agreed to exclude any appeal to the courts.

Such an agreement would not exclude the right to come to the courts under sections 67 and 68, but did exclude the right to appeal on a point of law under section 69. That conclusion was inevitable.

Where parties had agreed to arbitration it was not unusual for then to agree to limit the right of appeal under section 69.

On their ordinary construction the words in section 69(1) “otherwise agreed” required a contractual agreement in writing applying section 5 as to what was required to be agreed in writing.

By a written term of the contract, it was clear that the parties incorporated by reference an exclusion agreement. The clause excluding a right of appeal was not rendered onerous or unusual by the impact of article 6 of the European Convention on Human Rights.

The article 6 fair trial rights waived were of a limited nature. It would not infringe Sumukan’s rights to hold that the exclusion agreement was incorporated and Sumukan was bound by it.

Solicitors: Speechly Bircham LLP.

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