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family law, arbitration, barder, spousal periodical payments, financial remedies, forseeability, principle of mistake, arbitral award, Arbitration Act 1996
The below judgment was a decision of Mostyn J on 24 February 2016. It concerns a show cause application in financial remedy proceedings in relation to an arbitral award. It considers the circumstances in which a challenge can be made to such an award becoming an order of the court.
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Feb 25, 2016, 05:56 AM
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InDB v DLJ  EWHC 324 (Fam), Mostyn J has given judgment in favour of the husband on his application that the wife do show cause why an arbitral award (as supplemented) made by Mr Gavin Smith dated 2 July 2015 should not be made an order of the court.
The wife argued that the award was vitiated by a mistake about the true value of the property in Portugal allocated to her. Alternatively, she submitted that events had occurred since the award which invalidated the finding made by the arbitrator as to the value of that property.
The judgment includes a study on the extremely limited challenges that may be made to arbitral awards. Mostyn J says, 'It can therefore be seen that when parties sign up to arbitration under the 1996 Act they "buy" very limited rights of challenge. These rights do not extend to a challenge based on a mistake in the production of evidence or as a result of a supervening event.' He then qualifies this by saying, 'However, I do not conclude that the door to relief is closed to the wife. This is because of certain important differences between the family and civil processes.' He goes on to say that, in fact, mistake, supervening event and fraud can vitiate an award.
This is yet another case where leading members of the judiciary have lent their wholehearted support to the family arbitration scheme. In the course of his judgement, Mostyn J referred to the award as 'a thorough, conscientious and clear piece of work. Its quality is a testament to the merit of opting for arbitration'.
Mostyn J notes that, since the Institute of Family Law Arbitrators launched family arbitration in February 2012, divorcing couples are afforded the same advantages as have been made available to commercial people for over a century.
Mostyn J also rationalises and fast-tracks the procedure in such matters. In the future any notice to show cause why an arbitration award should not be made an order of the court must, for London and the South Eastern Circuit, be issued in the Royal Courts of Justice and immediately placed before Mostyn J himself for allocation to a High Court judge for speedy determination. If the application is issued outside London or the South Eastern Circuit then it must be immediately placed before the Family Division Liaison Judge who will arrange for it to be heard speedily by him or her or another High Court judge (including a section 9 judge). 'It is important for the promotion of the arbitration system that litigants should know that if a challenge to an arbitration award is raised that it will be heard by a High Court judge at the soonest opportunity', he says.
Tony Roe will provide a more detailed analysis of the case in the March issue of Family Law. Case No: FD13D05331 Neutral Citation Number:  EWHC 324 (Fam)