Husband successfully challenges arbitration divorce settlement

A husband has successfully challenged a divorce settlement arrived at through arbitration and has been allowed to have the issues reconsidered in court.

The wife had applied for financial relief following the marriage breakdown. After an unsuccessful financial dispute resolution hearing, the case was listed for trial.

However, no district judge was available, so the couple signed an arbitration agreement under the Institute of Family Law Arbitrators (IFLA) scheme.

The husband considered the arbitrator’s award to be unfair and applied to the High Court to set it aside under the Arbitration Act 1996.

The judge declined to interfere with the award, so the husband took the case to the Court of Appeal, which found in his favour.

It held that a court could decline to make an order where there were “”good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement”” or where “”it would not be fair to hold them to their agreement””.

The proposition that where a couple had entered into an arbitration agreement, “”the mere fact that an award was ‘wrong’ or even ‘unjust’ does not, of itself, provide any basis for challenging the award”” could not be justified in the context of family proceedings

Such an approach infringed the fundamental tenet of “”fairness””.

Looking at the details of the case, the husband would have a real prospect of succeeding in an appeal against the award. The matter was therefore remitted to a circuit judge.

Please contact Mandip Bhachu or Joe Colley if you would like more information about the issues raised in this article or any aspect of family law.

[2020] EWCA Civ 1369

RUSSELL HALEY v KELLY HALEY (2020)

CA (Civ Div) (King LJ, Moylan LJ, Popplewell LJ) 23/10/2020