When it comes to sorting out the financial aspects of divorce, arbitration has become increasingly popular as a cost-effective and relatively speedy alternative to formal court proceedings. However, as one case showed, it is vital to remember that an arbitrator’s decision is just as binding as if it had been made by a judge.
The case concerned a couple in their 60s who were married for almost 40 years. After they divorced, they reached a broad overall agreement that the husband should receive 52 per cent, and the wife 48 per cent, of matrimonial assets valued at about £17 million. Certain outstanding matters that remained in dispute between them were, however, referred to an arbitrator.
After the arbitrator issued a detailed, 32-page award, the husband mounted a High Court challenge to aspects of his decision. He argued, amongst other things, that the way in which the arbitrator dealt with the capital and running costs associated with the wife’s occupation of a property was ambiguous or inconsistent with the terms of the couple’s prior agreement.
Ruling on the matter, the Court noted that, when the couple agreed that the arbitrator should determine all issues concerning the division of their assets, they conferred upon him all the powers of a judge. In doing justice between them, he was able to step outside the terms of their agreement and his award could only be challenged if it was legally or factually wrong.
Dismissing the husband’s complaints, the Court found that the arbitrator’s award was consistent with the overriding objective of doing justice at a reasonable cost. He did his utmost to avoid future litigation between the couple and his intentions clearly emerged from his decision when read as a whole. It was inappropriate to subject his award to minute textual analysis and some of the husband’s grounds of challenge had come close to being totally without merit.