fbpx

High Court Decision Underlines the Finality of Divorce Arbitration Awards

12th April 2019 By Arman Khosravi

Divorcing couples can sometimes achieve savings of both time and money by opting for arbitration, rather than court proceedings, as a means of resolving any financial disputes. However, as a guideline High Court case underlined, arbitration has its potential downsides and it is vital to remember that arbitrators’ decisions are generally treated as final.

Faced with the prospect of having to wait several months for a court date following the breakdown of their ten-year marriage, a middle-aged couple chose to submit their differences to an arbitrator. He decided that the net capital assets of the marriage should be divided 60 per cent to 40 per cent in the husband’s favour.

Such division was to be achieved by the sale of the family home and was designed to enable each of them to purchase a new property. The wife was awarded 76 per cent of the husband’s pension and he was required to pay her maintenance at steadily reducing rates up to the date of his retirement. The wife was, however, dissatisfied with the arbitrator’s award, arguing that it was untenable.

She claimed, amongst other things, that the arbitrator had failed to take into account her inability to take on a mortgage and the husband’s excessive spending following the end of the marriage. In those circumstances, she argued that the award should not, as is usual, be recognised in the form of a court order.

In ruling on the matter, the High Court noted that arbitration awards are binding in their own right, although they are generally confirmed by court order so that they can be enforced against third parties. However, an arbitration agreement, or an award, does not oust the Court’s jurisdiction under the Matrimonial Causes Act 1973 to investigate the circumstances and make an order in different terms.

The effectiveness of the arbitration scheme, however, depends on awards being generally treated as effective and binding. In pursuit of a swift resolution of the dispute, both husband and wife had freely entered into the arbitration process with the benefit of legal advice. Both had also signed a form by which they signalled their understanding that the arbitrator’s award would in principle be final.

In dismissing the wife’s arguments, the Court found that she had failed to establish any fundamental change in circumstances, or mistake on the arbitrator’s part, sufficient to undermine his clearly reasoned and balanced award. In the circumstances, the Court made an order in the terms of the award.

Source: Concious

Latest News

Award That Requires Borrowing Made Into Court Order

17th May, 2024 By

Disagreements between separating couples all too often result in litigation that substantially reduces the assets available to them, as was illustrated by a case that recently reached the High Court. At issue was whether awards made by arbitrators in financial remedy proceedings can be made into court orders even if that would require one of the parties to borrow money. The couple had previously had a relationship lasting a few years before resuming their relationship in 2015. They had two children before separating again in 2019. Following their separation, the...

Inheritance Disputes – Costs Risks Can Be Reduced

15th May, 2024 By

Arguments about what someone promised before their death can lead to significant legal costs. However, if faced with a claim against the estate, there may be steps the beneficiaries or executors can take to reduce the risks, as a recent High Court case illustrated. A man had left a farmhouse and agricultural land in Cornwall to his wife, with whom he had also jointly owned a neighbouring area of land. After his death, one of the couple's daughters and her husband claimed that he had told them he wanted them...

Share Rounding Error Does Not Prevent CGT Relief

13th May, 2024 By

There are often very specific rules that must be complied with in order to claim tax reliefs, but if a small mistake arises, the courts may be able to provide assistance. In a recent case, the First-tier Tribunal (FTT) found that an investor was entitled to Entrepreneurs' Relief on the disposal of his shares in a company, despite owning one share fewer than he needed to qualify for it. The investor had agreed to purchase 5 per cent of the shares in the company for £500,000. He wished to own...

Wife Entitled to Maintenance Until Sale of Family Home

10th May, 2024 By

When divorcing couples disagree on how assets should be divided, the courts will seek to arrive at a fair outcome for both parties. In deciding how the proceeds of sale of a former couple's home should be apportioned, the Family Court agreed with the wife that she should receive maintenance payments until the sale took place. The couple had married in 2006. Following a brief separation, they had reconciled for two years before finally separating in 2022. The husband and wife both contended that they should be entitled to about...