Inco Europe Ltd v First Choice [2000] UKHL 15

Dispute arose whether an appeal to the Court of Appeal was permitted from a High Court decision under section 9 of the Arbitration Act 1996 regarding a stay of proceedings. The House of Lords held that despite a drafting error in section 18(1)(g) of the Supreme Court Act 1981, the right of appeal remained where the relevant section was silent on restrictions.

Facts

The plaintiffs issued a writ claiming damages for the loss of a consignment of nickel cathodes being transported from Rotterdam to Hereford. The defendant, Steinweg, applied under section 9 of the Arbitration Act 1996 for a stay of legal proceedings, arguing the matter was subject to an arbitration agreement requiring arbitration in the Netherlands. His Honour Judge Hegarty QC dismissed the application, holding the arbitration agreement was ‘null and void, or inoperative’. Steinweg sought permission to appeal, which was refused by the judge. Steinweg renewed its application to the Court of Appeal.

Issues

Principal Issue

Whether an appeal lies to the Court of Appeal from a decision of the High Court made under section 9 of the Arbitration Act 1996, given that section 18(1)(g) of the Supreme Court Act 1981 (as amended) appeared to exclude such appeals.

Statutory Interpretation

Whether the amended section 18(1)(g), read literally, precluded all appeals from High Court decisions under Part I of the Arbitration Act 1996 where no express provision for appeal was made in the relevant section.

Judgment

The House of Lords unanimously dismissed the appeal, holding that the Court of Appeal did have jurisdiction to hear the appeal from Judge Hegarty’s decision.

Lord Nicholls of Birkenhead delivered the leading speech. He concluded that the draftsman had made an error in paragraph 37(2) of Schedule 3 to the Arbitration Act 1996:

‘I am left in no doubt that, for once, the draftsman slipped up. The sole object of paragraph 37(2) in Schedule 3 was to amend section 18(1)(g) by substituting a new paragraph (g) that would serve the same purpose regarding the Act of 1996 as the original paragraph (g) had served regarding the Act of 1979.’

Lord Nicholls articulated the court’s power to correct obvious drafting errors:

‘It has long been established that the role of the courts in construing legislation is not confined to resolving ambiguities in statutory language. The court must be able to correct obvious drafting errors. In suitable cases, in discharging its interpretative function the court will add words, or omit words or substitute words.’

Conditions for Corrective Interpretation

Lord Nicholls set out three conditions that must be satisfied before a court interprets a statute by adding, omitting, or substituting words:

‘Before interpreting a statute in this way the court must be abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed.’

Implications

This case is a significant authority on the principles of statutory interpretation, particularly regarding the court’s power to correct obvious drafting errors. It establishes that courts may read words into legislation where Parliamentary intention is clear but the drafting has inadvertently failed to achieve that purpose. The decision also clarifies the appellate framework under the Arbitration Act 1996, confirming that where sections are silent on appeals, no restriction was intended and ordinary appeal rights remain available.

Verdict: Appeal dismissed. The Court of Appeal had jurisdiction to hear appeals from High Court decisions under section 9 of the Arbitration Act 1996, as the apparent restriction in section 18(1)(g) of the Supreme Court Act 1981 resulted from a drafting error that did not reflect Parliamentary intention.

Source: Inco Europe Ltd v First Choice [2000] UKHL 15