Court of Appeal
Civil Appeal No. 8 of 2000
15th June and 19th October, 2000.

Mr. Denys Barrow, S.C for the Appellants.
Mr. Wilfred Elrington, S.C. and Mr. Kirk Anderson, for the Respondents.

Arbitration Act, Chapter 69 - Appeal against decision of Supreme Court Judge ordering matter subject of arbitration to be remitted back to arbitrator to clarify certain points in arbitration award - Judge granting leave to appeal on satisfaction of certain conditions - Service of preliminary objection on apposite party in Court of Appeal cases - Court of Appeal Act and Rules - Order II Rule 7 - Preliminary objection to be served at least three clear days before date of hearing - Effect of award of arbitrator - An arbitration award does not immediately entitle the successful party to levy execution against the assets of the unsuccessful party or to apply to have him committed for contempt - Rather, award must first be converted into a judgment or order of the Court - Effect of section 13 of Arbitration Act - Arbitration award may only be enforced by leave of Court - What Plaintiff has to prove in making application for leave to enforce arbitration award - Effect of arbitration award remitted by court back to arbitrator - When the award comes into force - Conditions of grant of leave to appeal - Supreme Court judge seeking to enforce satisfaction of award under cloak of attaching conditions to grant of leave to appeal - Judge ordering large amount to be paid into escrow account.

J U D G M E N T

ROWE, P.

The Respondents sold their shares in Maya Ranch Ltd. to the Appellants in a September 15, 1995 agreement and the Appellants went into possession of a very large tract of land which passed to them under the agreement. Disputes arose between the parties concerning title to a portion of the land and the non-payment of installments of the purchase price pursuant to the agreement. These disputes were submitted by the parties to arbitration.

The Arbitrator's award was challenged. The present Appellants applied to Shanks J. to set aside the award in its entirety. On their part, the present Respondents applied to have the award remitted to the Arbitrator to clarify certain portions of the award. Shanks J. rejected the application by the present Appellants to set aside the award and granted the application to remit the award, which application had not been opposed. On the application of the Appellants, Shanks J. granted leave to appeal upon condition that the Appellants prosecute their appeal with dispatch and that the Appellants, on or before the 17th March, 2000, pay in escrow into a bank account in the joint names of the attorneys-at-law for the parties, the full amount of the installments due under the agreement between the parties dated 15th September, 1995 (less the damages ordered to be paid by the Claimants to the Respondents by the award of the Arbitrator), to abide by the result of the appeal. The sum to be paid into escrow by that order amounted to US $666,131.50.

It is from these conditions imposed by Shanks J. that this appeal has been taken. At the outset of the argument before us, Mr. Elrington sought to argue a preliminary objection which he had filed on June 7, 2000, the gist of which was that the conditional leave granted by Shanks J. was then null and void for non-compliance with the terms thereof. Mr. Barrow objected to this preliminary objection being heard because he was taken by surprise. He had only been served with the Notice of the preliminary objection 20 minutes before the commencement of the hearing. Mr. Elrington could not show that Mr. Barrow had been served earlier. The notice of objection was not served in accordance with Order II Rule 7 of the Court of Appeal Rules, which require such objections to be served at least three clear days before the date of hearing. The Court observes that the principal duty of the objector is to give notice to the opposite party of the objection and then to file the notice in the records of the Court. We refused to permit Mr. Elrington to argue his preliminary objection and we proceeded to hear the appeal.

The thrust of Mr. Barrow's submissions was that the condition imposed by the learned trial judge for the payment of the installments due into an escrow account was tantamount to an order enforcing the award of the Arbitrator. A reasonably large sum of money was involved and although it was not to be immediately paid over to the then Claimants, it was the price which the present Appellants would have to pay to be able to get to the appellate Court. An Affidavit had been filed by the Appellants to the effect that the real estate to which the litigation related had been greatly improved in value since the Appellants gained possession due to their efforts and that therefore there was ample security for any award which would be finally made in this case.

An award of an Arbitrator, unlike a judgment or order of a Court, does not immediately entitle the successful party to levy execution against the assets of the unsuccessful party or to apply to have him committed for contempt. It is first necessary to convert the award into a judgment or order of the Court and only then can the successful party levy execution. See Mustill & Boyd, Commercial Arbitration, 2nd Ed. Cap. 28 - Enforcement of Award.

It is provided in the Arbitration Act of Belize, Chapter 69, section 13, that an award of an Arbitrator can only be enforced by leave of the Court. No application has been made in this case for the enforcement of the award of the Arbitrator pursuant to that section. If an application for leave to enforce the award is made to the Court, the Plaintiff must prove the arbitration agreement and the arbitration award; show that the dispute was within the terms of the submission and that the arbitrator was duly appointed. The Defendant can oppose the award on any number of technical grounds, including the allegation that the award had been set aside or remitted. See Mustill & Boyd, supra, p. 418.

The prevailing view appears to be that if the Court remits a portion of the award to the arbitrator he has no jurisdiction to change the portions of the award which the Court left untouched. The arbitrator must make a fresh award covering all the matters originally submitted to him, but as to the matters not remitted he must simply repeat his original decision. Until this new award is published, there is no binding adjudication on any of the matters submitted to the arbitrator. Until the new award is published, there is no binding adjudication on any of the matters referred. Even if the successful party sought to enforce the portions of the award which were found to be unimpeachable, the Court has a discretion to refuse to enforce it pending the rendition of the complete award. See Mustill & Boyd, supra, p. 566.

Section 15(3)(b) of the Court of Appeal Act of Belize provides that in certain cases an appeal shall lie from a decision of the Supreme Court with the leave of the Supreme Court or if it refuses, with the leave of the Court of Appeal.

Mr. Elrington submitted that the trial judge is not fettered in the exercise of his discretion to grant leave to appeal and in a proper case he may impose conditions. He said that the judge is not confined to a simple yes or no order when an application for leave to appeal is being considered by him. We think that he is plainly right in that submission and we gain support from the Court of Appeal Act itself which makes provision for an appeal where unconditional leave is refused by the judge in the Court below. See also dicta in Redman Ltd. v Filecroft Ltd. (1991) WLR 692, to the effect that under legislation in England somewhat similar to section 15(3)(b) of the Court of Appeal Act of Belize, jurisdiction to grant leave to appeal is not limited to grant or refusal simpliciter but may include conditions.

There are unusual features in this case. At the time of the grant of leave to appeal there was no judgment or order of the Court which could be enforced by execution or otherwise. Indeed the trial judge had remitted the arbitrator's award to the Arbitrator and consequently it is very debatable if there was any part of that award which could have been enforced on an application to the Court. The trial judge expressed his strong suspicion that there were delaying tactics on the part of the Appellants, that they had made a claim for inflated damages in the arbitration proceedings which were rejected by the arbitrator and that the sum already due under the agreement should be paid into escrow. We were addressed to the effect that there had been no submissions of delaying tactics or inflated damages before the learned judge in the Court below and that he had therefore taken into consideration irrelevant matters in setting the conditions for granting leave to appeal.

The learned judge appears to have been deeply impressed with the fact that the Appellants are in possession of the property which they acquired from the Respondents and have not paid a penny piece to them since the initial payment in September 1995. Those same arguments were addressed to us by Mr. Elrington, but they have no bearing on the issue as to whether the judge in the Court below had jurisdiction to impose the conditions to pay money into escrow as a condition of granting leave to appeal in this case. The payments were not related to costs thrown away or to compensate the Respondents for a step in the litigation or which were brought about by some wrongdoing on the part of the Appellants. In our view the contention of the Appellants that the monetary condition imposed by the trial judge as a condition for his grant of leave to appeal was a thinly veiled effort to enforce the award of the Arbitrator is meritorious. The learned trial judge was quite convinced that the Respondents were entitled to the installments due under the agreement, but that was not a matter for him to decide and that was not a matter which he could properly take into consideration in exercising a discretion whether to grant the Appellants leave to appeal against the Court's decision rejecting the Appellant's request to set aside the Arbitrator's award.

The application before the Court was to set aside an award made pursuant to the Arbitration Act. It was not an application before him to enforce the award. Both sides had been dissatisfied with the award. The Appellants wanted the entire award set aside. The Respondents were claiming that the Arbitrator had not disposed of all the matters submitted to arbitration and therefore the award should be remitted for reconsideration. Neither party asked the Court to impose the monetary condition of the payment of a large sum of money into escrow. And in the final analysis, the reasons which the learned judge articulated for his imposition of conditions were of his own choosing and not advanced by any of the parties.

We concluded that in the circumstances of this case, the Court below had no jurisdiction to impose as a condition for the grant of leave to appeal, the payment into an escrow account of the amount of money which had been found to be due to the Respondents by the Arbitrator. We take into consideration the fact that the award in respect of which application for leave to appeal had been made, had been remitted by the trial by the trial judge to the Arbitrator and that the trial judge had taken into consideration the irrelevant matters referred to above. For the reasons set out herein, we allowed the appeal, set aside the conditions imposed by the court below and granted to the Appellants unconditional leave to appeal. Costs to be costs in the cause.

----------OO---------