<center><span class="news-text_medium">Case:</span> <span class="news-text_italic-underline">Stonegate Farmers Limited v Heavey [2026] EWHC 2519 (Comm)</span></center>
<center><span class="news-text_medium">Court:</span> English Commercial Court</center>
<center><span class="news-text_medium">Judge:</span> Thomas Raphael KC, sitting as a Deputy High Court Judge</center>
<center><span class="news-text_medium">Judgment date:</span> 9 October 2026</center>
Stonegate, an egg packer, retained the respondent’s “Lion Code” registration and declined to release it while the termination date of their exclusive supply agreement remained disputed.
The arbitrator found the agreement contained an implied term requiring Stonegate to release the registration. Neither party had advanced that argument and the arbitrator had not invited submissions on it before issuing his award.
His reasoning was also materially influenced by conclusions he had reached in a separate arbitration involving Stonegate and similar circumstances, referred to as the Chucks Farm arbitration. Stonegate successfully challenged the Chucks Farm award under section 68 of the Arbitration Act 1996. Following remission and detailed argument from the parties, the arbitrator reaffirmed the implied term in a further award, the Remission Award.
Stonegate then challenged that award under section 68. In the present proceedings, the court ordered disclosure of the Remission Award under the established exceptions to arbitral confidentiality.
The court considered:
<span class="news-text_medium">Serious irregularity:</span> The arbitrator’s failure to give Stonegate a reasonable opportunity to present its case on the implied term constituted a serious irregularity. The term had not been argued by either party, yet it formed the basis of the decision against Stonegate.
<span class="news-text_medium">Substantial injustice:</span> Establishing a serious irregularity was not sufficient: Stonegate also had to show substantial injustice. This required consideration of whether the outcome might have differed without the procedural failing, focusing on what the arbitrator might realistically have concluded when acting fairly and reasonably on the law and evidence.
The Remission Award was particularly relevant. In that award, the arbitrator had upheld the same implied term after hearing detailed submissions. Had the Remission Award remained unchallenged, the court would have found no substantial injustice in the present case: it supported a near-certain inference that a fair opportunity to make submissions would not have changed the outcome.
However, the Remission Award was itself under challenge. If that challenge succeeded, the same inference about the arbitrator’s likely decision might no longer be available. The court therefore adjourned final determination of substantial injustice pending the outcome of those proceedings.
<span class="news-text_medium">No issue estoppel from the section 69 decision:</span> HHJ Pelling had previously refused permission to appeal the present award under section 69, describing the implied term as “obviously correct”. The court held this did not create an issue estoppel. Among other reasons, the refusal involved applying a procedural permission threshold rather than determining the merits and therefore did not have res judicata effect.
The decision highlights the distinction between serious irregularity and substantial injustice. A procedural failing does not, by itself, establish that an award should be disturbed: the court must consider its realistic potential effect on the outcome.
An award in a parallel arbitration may provide important evidence for that assessment, particularly where the same issue has subsequently been considered after full argument. The case also reinforces that arbitrators proposing to rely on a matter outside the record should invite the parties’ comments before issuing their award.
