The New Zealand Supreme Court has unanimously reversed
the Court of Appeal in finding that an arbitration agreement,
expressed to be subject to rights of recourse including a
non-existent appeal on "questions of fact", was
invalid. Four of the five judges then exercised their discretion to
set the resulting award aside.
The case
The case – Carr & Anor v Gallaway Cook
Allan1 – stemmed from a failed property
transaction in 2007 in which a law firm had acted for Carr. Carr
alleged negligence on the part of the law firm, and the parties
agreed to submit the dispute to arbitration pursuant to an
agreement which provided:
The parties undertake to carry out any award
without delay subject only to such rights as they may possess under
Articles 33 and 34 of the First Schedule to the Arbitration Act
1996 (judicial review) and clause 5 of the Second Schedule (appeals
subject to leave) but amended to as to apply to
"questions of law and fact"
(emphasis added).
