Outer House case concerning an arbitration in relation to a lease and option to purchase (governed by missives, a minute of agreement and a minute of lease) Pentlandfield Business Park in Roslin.
Robert Ferguson had been a partner in a firm (subsequently dissolved) which was the landlord and seller of the business park. MITT was the purchaser and tenant. An arbitration commenced between the parties in respect of a clause imposing liability for repair and maintenance of the business park on the landlord. Mr Ferguson sought an interim interdict preventing the arbitration from progressing arguing:
- that (by ruling on a claim that arose under the missives and minute of agreement rather than the lease when only the lease contained an arbitration clause) the arbiter had exceeded his jurisdiction; and
- that the arbiter had no power to assess or award damages as the arbitration was governed by the common law.
Lord Hodge was not persuaded that Mr Ferguson had demonstrated a prima face case for interim interdict. The court would only interdict an arbiter from proceeding with an arbitration in exceptional circumstances which did not exist in this case. If, as Mr Ferguson contended, MITT did not have a valid claim under the clause in the lease, the arbiter would be able to dismiss the claim as irrelevant after a proof, the arbiter having jurisdiction to decide whether the claim under the lease was relevant.
With regard to the jurisdiction to award damages, Lord Hodge’s prima face view was that he was entitled to do so as the solicitors to both parties had signed an application to the chairman of RICS conferring a power to award damages. Also, by failing to raise any objections to the claims in the first three years of the arbitration, the parties had impliedly consented to confer on the arbiter the power to award damages.
The full judgement of the Scottish courts is available here.
(See also related decision here.)
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