The appeal on point of law under the Arbitration Act

On 16 December 2019, the Court of Appeal (Inferior Jurisdiction) presided over by Mr Justice Anthony Ellul considered the possibility of an appeal on a point of law under the Arbitration Act, Chapter 387 of the Laws of Malta (the “Arbitration Act”). The case in the names of Carin Construction Limited (C 12194) vs Cannon Estates Limited (C 20751) (Appeal

Number 11/2015) consisted of an appeal from a decision of the arbitral tribunal in relation to a delay in completion of a contract and the evaluation of the delay value.

The facts of the case were as follows. In 2011, Carin Construction Limited (C 12194) (the “Appellant”) initiated recourse to arbitration against Cannon Estates Limited (C 20751) (the “Respondent”) in order to contest the evaluation of delay value in the architects’ final certificate of payment which calculated that the payment owed by the Respondent to the Appellant had to be reduced by two hundred and fifty-nine thousand, seven hundred and twenty-five euro (€259,725) in damages for unjustified delays in the completion of the contract.

Through an arbitral award dated 5 July 2013, the arbitral tribunal declared that the value of the justifiable delay time should not exceed twenty-seven thousand, seven hundred and twenty-seven euro (€27,727), and thus only this amount may be claimed by the Appellant. The Appellant contested this decision and requested a correction in the first arbitral award in terms of article 48 of the Arbitration Act and for the arbitral tribunal to make an additional award in terms of article 49 of the Arbitration Act. The Appellant alleged that all delays were justified and that the arbitral tribunal failed to consider all claims put forth during the proceedings leading to first arbitral award.

On 4 March 2015, the arbitral tribunal decided that articles 48 and 49 of the Arbitration Act did not apply to the case at hand and the request for the correction of the first arbitral award dated 5 July 2013 was rejected.

In consequence, the Appellant filed an application with the Court of Appeal (Inferior Jurisdiction) for an appeal from both arbitral awards dated 2013 and 2015. The Appellant claimed that there were computational errors in the first arbitral award dated 5 July 2013 and the arbitral tribunal omitted a decision on certain points which were raised throughout the proceedings. The Appellant also alleged that in the correctory award dated 4 March 2015, the arbitral tribunal failed to apply articles 48 and 49 of the Arbitration Act correctly.

The Respondent in turn claimed that the appeal was based on a point of fact which was not catered forby the Arbitration Act and moreover, the Arbitration Act does not contemplate an appeal from a decision awarded in terms of articles 48 and 49 of the same Arbitration Act.

The Court of Appeal (Inferior Jurisdiction) presided over by Mr. Justice Anthony Ellul analysed the possibility of an appeal under the Arbitration Act. Article 70A of the Arbitration Act states:

“( 1) A party to arbitral proceedings may appeal to the Court of Appeal on a point of law arising out of a final award made in the proceedings unless –

the parties have expressly excluded such a right to appeal in the arbitration agreement or otherwise in writing; or

notwithstanding anything stated in the arbitration agreement, the parties have expressly agreed that no reasons are to be given in the award in accordance with article 44 (3).

When an appeal is filed, the applicant shall notify the arbitrators and the [Malta Arbitration] Centre with a copy of the application as soon as practicable but not later than fifteen days after the appeal is filed.

The Court of Appeal shall only consider the appeal if the Court is satisfied –

that the determination of the point of law will substantially affect the rights of one or more of the parties;

that the point of law is one which the tribunal was asked to determine or otherwise relied upon it in the award;

that on the basis of the findings of fact in the award the decision of the tribunal on the point of law is prima facie open to serious doubt; and

that based on a review of the application, any response and the award, the appeal does not appear dilatory and vexatious,

and in all other cases the Court shall dismiss the appeal.”

Article 70B of the Arbitration Act further clarifies that an appeal under article 70A of the Arbitration Act “shall identify the point of law to be determined and shall outline the interpretation which the applicant alleges is the correct interpretation on the point of law identified.”

Through this analysis, the Court of Appeal (Inferior Jurisdiction) determined that an appeal under

the Arbitration Act may only be lodged on a point of law and may only be filed within fifteen days from the notification to the applicant of the award in accordance with the Arbitration Act. It was also pointed out that an appeal on a point of law may arise only out of a final award. In this case, the second arbitral award dated 4 March 2015, made no corrections to the previous award and no additional awards were added. As a result, Mr Justice Ellul determined that the award to be considered as the “final award” in terms of article 70A of the Arbitration Act was the first arbitral award dated 5 July 2013.

The Court of Appeal (Inferior Jurisdiction) proceeded to analyse articles 48 and 49 of the Arbitration Act which respectively refer to a correction of an arbitral award with respect to “any errors in computation, any clerical or typographical errors, or any errors of similar nature” and for an addi

tional award to be made with re

spect “to claims presented in the arbitral proceedings but omitted from the award.”

The presiding Judge deduced that article 48 of the Arbitration Act is restricted only to errors in calculation or mistakes in writing and does not provide for an error of fact based on the evidence gathered. In this case, the Appellant claimed that the calculations should have been made on a cumulative basis and did not allege computational errors as contemplated by article 48 of the Arbitration Act.

With regard to article 49 of the Arbitration Act, the law does not provide for an appeal from a decision of the arbitral tribunal to deny a claim under article 49 of the Arbitration Act. The appeal lodged by the Appellant requested a re-examination of the evidence provided – this was not possible since under the Arbitration Act there is no right of appeal on points of fact. The application for an appeal contained no appeal on points of law as contemplated by article 70A of the Arbitration Act.

Mr Justice Ellul concluded that in voluntary arbitration, the right to appeal available to the parties is restricted only to an appeal on point of law. Article 70A of the Arbitration Act makes it clear that at appeal stage there may not be an examination of evidence. The facts are those as decided in the arbitral awards. Moreover, it is clear that an appeal must be on a point of law which was decided upon by the arbitral tribunal. This is also made evident from article 70B of the Arbitration Act. The case at hand raised no points of law, and thus the appeal was rejected.