In the recent case of Tradax Export S.A. v. Andre & Cie S.A. (reported in “Lloyd’s List” on Mar. 4, 1978) there was a dispute under a GAFTA contract where the umpire found for the sellers and the buyers appealed to the Board of Appeal in GAFTA. The buyers wished the Board to state their award in the form of a special case, but the Board refused and buyers sought an order requiring the Board to do so. Mr. Justice Donaldson made the order, and added that as the problems which gave rise to the application were of general interest and importance he would give his reasons in open court.

He considered that the application in question was a very good illustration of a general problem. So long as the court had the power and the duty under s. 21 of the Arbitration Act 1950 to direct an arbitrator or an umpire to “state (a) any question of law arising in the course of the reference or (b) an award or any part of an award, in the form of a special case for the decision of the High Court,” the court would need to know whether any and if so what question of law was in issue. Unfortunately, there was no procedure to enable the court to know whether or not this was the case.

The Employment Appeal Tribunal and the Restrictive Trade Practices Court were in the same position as arbitrators in that their decisions on questions of fact were final, but their decisions on questions of law were subject to review.

In their case, the review was by the Court of Appeal. Neither court was required to state its decision in the form of a special case. Each gave a reasoned judgment on all issues of fact and law. If there was no live issue of law this was apparent from the fact of the judgment which was therefore final. This approach worked well and gave rise to none of the problems which beset arbitration awards.

The lesson was clear. Three reforms in the law were needed and were needed urgently:

(i) Courts should cease to have the power and duty to set aside an award for a material error of fact or law which was apparent on the face of the award. This would open the way for English (and Welsh) arbitrators to give reasoned awards whenever they wished to do so and thus bring their practice into line with that of arbitrators in most other parts of the world.

(ii) The courts should have the power to require an arbitrator to give a reserved award upon a good cause being shown. The most usual cause would be that a question of law had or might have arisen and that the applicant wished to be in a position to apply for leave to appeal.

(iii) There should be a right of appeal to the High Court from a decision of an arbitrator, but this right ought to be limited to an appeal in respect of questions of law and to cases in which either the arbitrator or the court gave leave to appeal. The criteria for giving leave to appeal would require consideration.