Stonegate Farmers Limited v Chucks Farm Limited

Stonegate Farmers Limited v Chucks Farm Limited

The arbitrator committed a serious procedural irregularity by finding and applying an implied term as the basis for a damages award without giving Stonegate a reasonable opportunity to address the point. The implied term was not sufficiently 'in play' prior to the award, and the arbitrator’s failure to invite submissions on it breached section 33(1)(a) of the Arbitration Act 1996. This breach caused substantial injustice to Stonegate, as they had a reasonably arguable case against the implied term and the resulting damages award. The award must be remitted to the arbitrator for reconsideration.

Parties
Claimant/applicant: Stonegate Farmers Limited; Defendant/respondent: Chucks Farm Limited
Jurisdiction
England and Wales
Judgment Date
27 March 2026
Procedural Posture
Commercial Arbitration Challenge / Judgment on Section 68 Challenge and Section 69 Application
Outcome
Award 2 remitted to the arbitrator for reconsideration under section 68(3) Arbitration Act 1996.
Legal Topics
Serious Procedural Irregularity, Implied Terms, Damages for Breach of Contract, Arbitrator's Duty of Fairness, Remittal of Arbitral Award
Arbitration Contract Law Serious Procedural Irregularity Implied Terms Damages for Breach of Contract Arbitrator's Duty of Fairness Remittal of Arbitral Award

Case Brief

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Parties

Stonegate Farmers Limited

Claimant/applicant

Chucks Farm Limited

Defendant/respondent

Procedural Posture

Commercial Arbitration Challenge / Judgment on Section 68 Challenge and Section 69 Application

Legal Issues

  1. 1 Whether the arbitrator committed a serious procedural irregularity under section 68 of the Arbitration Act 1996 by finding an implied term without giving Stonegate a reasonable opportunity to address it
  2. 2 Whether the implied term found by the arbitrator was 'in play' prior to the award
  3. 3 Whether the breach caused substantial injustice to Stonegate

Ratio Decidendi

The arbitrator committed a serious procedural irregularity by finding and applying an implied term as the basis for a damages award without giving Stonegate a reasonable opportunity to address the point. The implied term was not sufficiently 'in play' prior to the award, and the arbitrator’s failure to invite submissions on it breached section 33(1)(a) of the Arbitration Act 1996. This breach caused substantial injustice to Stonegate, as they had a reasonably arguable case against the implied term and the resulting damages award. The award must be remitted to the arbitrator for reconsideration.

Court Disposition

Award 2 remitted to the arbitrator for reconsideration under section 68(3) Arbitration Act 1996.

Orders

  • Award 2 is remitted to the arbitrator for reconsideration of the implied term, Chucks Farm’s damages claim, and the issue of costs.
  • Any further terms to be attached to the remitter will be determined after hearing the parties on consequential matters.