Rule 55 Limits Post‑Draft Representations: New Issues Cannot Be Introduced to Found a Rule 68(2)(c) “Serious Irregularity” Appeal

1. Introduction

In Arbitration No.1 of 2025 ([2026] CSOH 2), Lord Lake in the Outer House of the Scottish Court of Session addressed the scope of a “serious irregularity” appeal under Rule 68(2)(c) of the Scottish Arbitration Rules (Schedule 1 to the Arbitration (Scotland) Act 2010). The dispute arose from a lease repairing obligation and a dilapidations/repairs claim. The parties were a Landlord (Anderson, R) and a Tenant (Morrison), though in the arbitration their procedural roles were reversed; the court used “Landlord/Tenant” for clarity.

A part award dated 28 March 2025 had already been the subject of a prior Court of Session decision refusing leave to appeal for alleged legal error. This petition instead alleged serious irregularity, contending that the arbitrator failed to deal with an issue said to have been put to her: a “Common Law Interpretation Argument” which, properly characterised, was an argument based on the doctrine of mutuality of contract (i.e., the Landlord’s alleged antecedent breach would bar enforcement of the Tenant’s repairing obligations).

Key issue

Whether the Tenant’s mutuality-based argument was (i) an “issue” and (ii) “put to” the arbitrator such that the arbitrator’s failure to address it in the award amounted to a Rule 68(2)(c) serious irregularity.

2. Summary of the Judgment

3. Analysis

3.1 The statutory and procedural framework

The appeal was brought under Rule 68(2)(c), which defines “serious irregularity” to include:

The court accepted the shared understanding (drawn from the DAC Report on the English Arbitration Bill 1996 and adopted in Scotland) that serious irregularity appeals are a “long stop” remedy reserved for extreme cases. Lord Lake referenced Lord Woolman’s approval of that approach in Arbitration Application No 1 of 2013, [2014] CSOH 83.

3.2 The four questions for Rule 68(2)(c) (from Petrochemical Industries Company (K.S.C) v The Dow Chemical Company [2012] EWHC 2739)

The parties agreed the court should ask:

1. Was the matter an “issue” for decision?
2. Was it “put to” the arbitrator for decision?
3. If yes to 1 and 2, did the arbitrator fail to deal with it?
4. If yes to 3, did that cause (or will it cause) substantial injustice?

It was common ground that the mutuality argument was not addressed in the part award (question 3), and that if it had been an issue properly put, omission could be capable of substantial injustice (question 4). The dispute therefore focused on questions 1 and 2.

3.3 What was the Tenant’s “Common Law Interpretation Argument” in substance?

Lord Lake held the label was misleading. Despite being presented as “interpretation” of clause 6.1, it was in essence a mutuality argument: because the Landlord allegedly failed to meet an antecedent obligation to deliver premises in tenantable condition, the Landlord could not enforce the Tenant’s repairing obligations at all. That is not a question of construing the repairing clauses’ scope; it is a contention that enforceability is barred by the Landlord’s prior breach.

3.4 Lease provisions anchoring the dispute (clauses 6.1 and 6.21)

The repairing obligation (clause 6.1) required work necessary to ensure the premises were in good and substantial order and repair and fit for permitted use, but capped the Tenant’s obligation so it would not keep/return the premises in any better condition than the Schedule of Condition. Clause 6.21 imposed an end-of-lease obligation aligned with the same cap. The arbitration as framed concerned the proper interpretation of these provisions and the measure of loss.

3.5 Was the mutuality point an “issue” (as opposed to an argument)?

The Tenant relied on Akenhead J’s discussion in Secretary of State for the Home Department v Raytheon Systems Limited [2014] EWHC 4375 (TCC) distinguishing “issues” from “arguments/lines of reasoning” and emphasising a high threshold, with reference to Petrochemical Industries v Dow and Primera v Jiangsu [2014] 1 Lloyd's Rep 255. Additional “essential issue” formulations were drawn from World Trade Corp v C Czarnikow Sugar Ltd [2005] 1 Lloyd's Rep 422 and Weldon Plan Ltd v The Commission for the New Towns [2000] BLR 496, and noted as recently quoted in The Republic of Kazakhstan v World Wide Minerals Ltd [2025] EWHC 452 (Comm). The Tenant also cited Buyuk Camlica v Progress Bulk Carriers [2010] EWHC 442 (Comm).

Lord Lake did not ultimately need to decide in the abstract whether mutuality could be an “issue” of the type that might determine the whole claim; he accepted that if it had been an issue put to the arbitrator, omission could be significant. The decisive failure was that it was not put as an issue requiring decision within the arbitration as conducted.

3.6 Was the mutuality issue “put to” the arbitrator?

(a) The correct test: attention must be clearly drawn

Lord Lake applied the approach articulated by the Privy Council in RAV Bahamas Ltd v Therapy Beach Club [2021] UKPC 8: the court must review the arbitration proceedings as a whole (pleadings, written submissions, oral submissions) and ask whether the tribunal’s attention was sufficiently clearly drawn to the matter as one it was required to determine, such that it would reasonably be expected to deal with it. The judgment notes this passage was also quoted with approval in Petrochemical Industries.

(b) Stage 1: pre-hearing materials—issue not raised

The arbitrator had directed the parties (19 November 2023) to provide notes identifying essential details and matters requiring to be addressed. The Landlord’s note identified interpretation of clauses 6.1 and 6.21 and measure of loss; the Tenant’s note was broadly similar. Both parties’ written submissions tracked that framing—construction of the repairing provisions and the schedule of condition.

Lord Lake held there was no mention whatsoever pre-hearing of a mutuality contention that the Landlord’s alleged breach rendered the repairing obligations unenforceable. References to initial condition and photographs were treated as part of a construction argument (benchmarking the Tenant’s obligation), not an enforceability bar.

(c) Stage 2: the hearing—still not clearly put

The Tenant argued the point was advanced orally, relying on Napier v Ferrier 1847 9D 1354 and solicitor’s notes of the hearing. Lord Lake examined the notes (while acknowledging the Landlord’s objection to their accuracy/weight) and found that what was recorded concerned the scope/content of the Tenant’s obligation (“keep in repair” rather than “put in repair”), not a mutuality plea disabling enforcement. The notes did not mention “mutuality”.

Accordingly, even on the Tenant’s own account, the hearing submissions aligned with the previously identified interpretive issues and did not put a mutuality issue to the arbitrator for decision.

(d) Stage 3: post-hearing “representations” on the draft award—too late and out of scope

After the hearing, the arbitrator circulated a draft part award (email 4 December 2024) inviting comments within 14 days. The Tenant lodged a 10-page “representations” document largely re-arguing interpretation and authorities (including urging revisiting Dem-Master Demolition Limited v Healthcare Environmental Services Limited [2917] CSOH 14 and challenging the arbitrator’s view of McCall's Entertainments (Ayr) Limited v South Ayrshire Council (No 2) 1998 SLT 1421).

Crucially, only at this stage did the Tenant make a first (and passing) reference to mutuality and assert the Landlord could not enforce the repairing obligation due to the premises’ condition. Lord Lake held:

• This was the first reference to mutuality; it had not been raised previously in written or oral submissions, despite the Tenant’s claim to the contrary.
• The Landlord was correct that it was too late to introduce a new issue post‑draft.
• Rule 55 requires the arbitrator to consider representations “about the draft”, not new issues which would re-open the arbitration and undermine the Act’s object of fair, impartial resolution without unnecessary delay or expense (section 1 of the 2010 Act).

Lord Lake reasoned that allowing new issues at the draft stage would create iterative cycles of new arguments, require responses (and possibly further hearings) as a matter of fairness, and frustrate arbitration’s efficiency objectives. Therefore, the Tenant’s late mutuality point did not become an issue “put to” the arbitrator.

3.7 Result: no Rule 68(2)(c) serious irregularity

Applying RAV Bahamas Ltd v Therapy Beach Club [2021] UKPC 8, Lord Lake concluded the mutuality argument was not put to the arbitrator as an issue requiring determination; it was not necessary to decide it to resolve the issues actually advanced. Since Rule 68(2)(c) targets failure to deal with issues put to the tribunal, the award was not vitiated and the appeal failed.

4. Precedents Cited and Their Role

• Arbitration Application No 1 of 2013, [2014] CSOH 83: Cited for the policy that serious irregularity appeals are exceptional (“long stop”), reinforcing the high threshold.
• Petrochemical Industries Company (K.S.C) v The Dow Chemical Company [2012] EWHC 2739: Provided the four-question framework for Rule 68(2)(c)-type appeals and supported the “issue”/“put to” analysis.
• Secretary of State for the Home Department v Raytheon Systems Limited [2014] EWHC 4375 (TCC): Cited by the Tenant to define “issue” vs “argument” and to stress only essential matters qualify; contextually relevant but not decisive given the “not put” finding.
• Primera v Jiangsu [2014] 1 Lloyd's Rep 255: Referenced (via Raytheon) for the high threshold in serious irregularity.
• World Trade Corp v C Czarnikow Sugar Ltd [2005] 1 Lloyd's Rep 422 and Weldon Plan Ltd v The Commission for the New Towns [2000] BLR 496: Cited (via Raytheon) for the notion that essential, outcome-critical matters must be dealt with—again, subordinate here to whether the matter was ever properly raised.
• The Republic of Kazakhstan v World Wide Minerals Ltd [2025] EWHC 452 (Comm): Noted as recent approval of the Raytheon passages; used to support the Tenant’s doctrinal framing.
• Buyuk Camlica v Progress Bulk Carriers [2010] EWHC 442 (Comm): Cited for when a matter is an “issue” because it is necessary to decide submissions; not determinative due to the “not put” conclusion.
• RAV Bahamas Ltd v Therapy Beach Club [2021] UKPC 8: Central authority for the “put to” inquiry, emphasising a holistic view of proceedings and the need for sufficiently clear articulation to the tribunal.
• Napier v Ferrier 1847 9D 1354: Used by the Tenant to argue “keep in repair” implies an initial landlord obligation; Lord Lake treated the reliance as going to scope of obligation, not mutuality/enforceability.
• Dem-Master Demolition Limited v Healthcare Environmental Services Limited [2917] CSOH 14 and McCall's Entertainments (Ayr) Limited v South Ayrshire Council (No 2) 1998 SLT 1421: Mentioned as authorities the Tenant sought to have reconsidered in post-draft representations; they illustrate the Tenant’s attempt to reopen merits rather than clarify the draft.

5. Complex Concepts Simplified

• “Serious irregularity” (Rule 68): A narrow safety net. It is not a general appeal on the merits; it targets procedural failures (such as not deciding issues properly presented) that cause substantial injustice.
• “Issue” vs “argument”: An “issue” is a question the tribunal must decide to resolve the dispute (e.g., what clause 6.1 means). An “argument” is a reason advanced to persuade the tribunal on an issue. Rule 68(2)(c) is engaged when an issue put to the tribunal is not decided.
• “Put to” the tribunal: Not a technical pleading requirement, but the tribunal must be clearly alerted that it is being asked to decide the matter. Vague hints or late references may not suffice.
• Mutuality of contract: A party in material breach may be unable (depending on circumstances) to demand performance by the other. Here, the Tenant sought to use mutuality to bar the Landlord from enforcing repairing obligations due to alleged failure to deliver premises in tenantable condition.
• “Keep in repair” vs “put in repair”: A “keep in repair” obligation often implies maintaining an existing standard, whereas “put in repair” can imply upgrading from disrepair. The Tenant’s reliance on this distinction was treated as interpretive, not as an enforceability defence.
• Rule 55 draft award “representations”: Comments are permitted to address the draft (e.g., typographical errors, clarification, or points arising from what the draft decides). This case holds Rule 55 is not a vehicle to introduce wholly new issues after the tribunal has effectively decided the matters presented.

6. Impact

This decision is likely to be relied upon in Scottish arbitration practice for two practical propositions:

• Finality and efficiency at the draft award stage: Rule 55 representations must be confined to the draft; parties cannot use them to introduce new issues and later claim a Rule 68(2)(c) irregularity when the tribunal does not deal with those late points.
• Clarity in case presentation: If a party wishes an enforceability defence (such as mutuality) to be decided, it must be clearly raised in the arbitration in time—through pleadings/issues lists where used, and in written/oral submissions—so the tribunal can fairly receive evidence/submissions and the other party can respond.

More broadly, the judgment reinforces the policy that “serious irregularity” is exceptional and is not to be expanded by characterising late-breaking, undeveloped submissions as “issues” the tribunal failed to decide.

7. Conclusion

Lord Lake’s opinion confirms that a Rule 68(2)(c) challenge fails where the allegedly omitted matter was not properly “put to” the arbitrator as an issue requiring decision. Importantly, the judgment clarifies the function of Rule 55: post‑draft “representations” are limited to matters about the draft and do not permit parties to inject new issues after the tribunal has reached a draft decision. The case strengthens arbitration finality in Scotland and provides a clear warning that parties must raise outcome-determinative defences—such as mutuality—squarely and timeously within the arbitration itself.