Achill Sheltered Housing Association CLG v Dooniver Plant Hire Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Brian
• Judgment Date: 12 January 2018
• Neutral Citation: [2018] IEHC 6
• Judgment citation (vLex): [2018] 1 JIC 1203
• Docket Number: [2017 No. 165 MCA]
• Court: High Court
• Date: 12 January 2018

[2018] IEHC 6

THE HIGH COURT

McGovern J.

[2017 No. 165 MCA]

IN THE MATTER OF THE PURPORTED APPOINTMENT OF AN ARBITRATOR TO ARBITRATE A CLAIM BY DOONIVER PLANT HIRE LIMITED AGAINST ACHILL SHELTERED HOUSING ASSOCIATION CLG

AND IN THE MATTER OF AN INTENDED ARBITRATION

AND IN THE MATTER OF THE ARBITRATION ACT 2010

BETWEEN

ACHILL SHELTERED HOUSING ASSOCIATION CLG

APPLICANT

AND

DOONIVER PLANT HIRE LIMITED

RESPONDENT

Arbitration - The Arbitration Act 2010 - Art. 16(3) of the UNCITRAL Model Law on International Commercial Arbitration ('Model Law') - Validity of the appointment of arbitrator - Breach of terms of contract - Delay

Facts: The applicant sought an order pursuant to art. 16(3) of the Model Law that the purported appointment of the arbitrator by the President of the relevant institution was invalid. The applicant also sought an order to the effect that the arbitrator made an error in law, in making a preliminary ruling that his appointment was valid and he had jurisdiction to continue with the arbitration. The applicant contended that there was delay in making the referral for arbitration by the respondent and that the respondent's notification of matters in dispute contained new items for which there was no agreement to refer those disputes to arbitration.

Mr. Justice Brian McGovern granted the relief sought by the applicant. The Court held that the respondent breached the condition of giving a prompt notice to the applicant in relation to the matters in dispute. The Court found that the respondent gave notice of the dispute that was not the subject to conciliation and thus, it was not appropriate for the President of the relevant institution to nominate or appoint the arbitrator.

JUDGMENT of Mr. Justice Brian McGovern delivered on the 12th day of January, 2018

1 The applicant in its Originating Notice of Motion dated 24th May, 2017, seeks the following reliefs:-

(i) an order pursuant to Article 16(3) of the UNCITRAL Model Law on International Commercial Arbitration (' the Model Law') that the purported appointment in or about the month of April 2017, by the President of the Royal Institution of Architects in Ireland of Donogh O'Riordan (' the arbitrator') as arbitrator to arbitrate a claim by the respondent against the applicant is invalid and that the said Donogh O'Riordan does not have jurisdiction to so arbitrate; and

(ii) an order pursuant to Article 16(3) of the Model Law that the arbitrator erred in fact and in law in determining on 8th May, 2017, that he had been validly appointed and that he had jurisdiction to continue with the arbitration.

2 In early 2008, the applicant entered into an agreement (' the Construction Contract') with the respondent for the construction of six houses, a laundry building, site development works, drainage and services at Cuan Aoibhinn, Keel, Achill, Co. Mayo. The contract price was €1,241,988.04, or such other sums as should become payable by virtue of additions to or deductions from the contract sum or otherwise pursuant to the conditions of the contract.

3 On 14th February, 2011, the architect appointed in the Construction Contract gave notice of his intention to issue the Final Certificate. On 25th March, 2011, the respondent contractor wrote to the applicant giving notice of dispute under Clauses 35 and 37 of the contract and since that time certain issues in dispute remain unresolved.

4 One very unsatisfactory feature of this dispute is the delay by the respondent in requesting the appointment of an arbitrator. This step was taken on 2nd August, 2016, almost four and a half years after the previous engagement between the parties when the respondent had notified the applicant of a dispute.

5 As the parties were unable to agree an arbitrator, the respondent wrote to the President of the RIAI, Ms. Carole Pollard, asking her to appoint an arbitrator under Clause 37(b) of the Construction Contract which provides that the arbitrator shall be:-

'…such person as the parties hereunto may agree to appoint as Arbitrator or, failing agreement as may be appointed on (sic) the request of either party by the President for the time being of the Royal Institute of the Architects of Ireland.' ('the RIAI')

6 In due course, the President of the RIAI nominated Mr. Donogh O'Riordan (' the arbitrator') and on 8th May, 2017, the arbitrator made a preliminary ruling that he had been validly appointed although he was aware that the applicant was contending that his appointment was invalid and that the precondition of prompt referral to conciliation of the dispute specified in the respondent's letters of 17th February, 2012, and 9th March, 2012, had not been met and furthermore that the notice of dispute given on 9th March, 2012, contained a new matter which had not previously been referred to and had not been the subject of a conciliation process.

7 The affidavits filed in this application set out the background facts which are not in dispute.

Issues

8 There are two issues that arise in this application. The first is whether or not the President of the RIAI was entitled to make a nomination or appointment of an arbitrator. The second is whether or not the arbitrator was entitled to rule, as a preliminary issue, that he was validly appointed.

The Model Law

9 Article 6 of the Arbitration Act 2010 provides that the Model Law shall have the force of law in the State both in respect of international commercial arbitrations and domestic arbitrations.

10 The two provisions of the Model Law most relevant to this application are Article 11 and Article 16.

11 Article 11 deals with the appointment of arbitrators and provides as follows:-

'(1) No person shall be precluded by reason of his nationality from acting as an arbitrator, unless otherwise agreed by the parties.

(2) The parties are free to agree on a procedure of appointing the arbitrator or arbitrators, subject to the provisions of paragraphs (4) and (5) of this article.

(3) Failing such agreement,

(a) in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two arbitrators thus appointed shall appoint the third arbitrator; if a party fails to appoint the arbitrator within thirty days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within thirty days of their appointment, the appointment shall be made, upon request of a party, by the court or other authority specified in article 6;

(b) in an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, he shall be appointed, upon request of a party, by the court or other authority specified in article 6.

(4) Where, under an appointment procedure agreed upon by the parties,

(a) a party fails to act as required under such procedure, or

(b) the parties, or two arbitrators, are unable to reach an agreement expected of them under such procedure, or

(c) a third party, including an institution, fails to perform any function entrusted to it under such procedure, any party may request the court or other authority specified in article 6 to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.

(5) A decision on a matter entrusted by paragraph ( 3) or (4) of this article to the court or other authority specified in article 6 shall be subject to no appeal. The court or other authority, in appointing an arbitrator, shall have due regard to any qualifications required of the arbitrator by the agreement of the parties and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator and, in the case of a sole or third arbitrator, shall take into account as well the advisability of appointing an arbitrator of a nationality other than those of the parties.'

12 For the purposes of Article 6, the High Court has been designated as the forum for dealing with such matters and, within the High Court, issues arising under the Model Law shall be decided by the designated arbitration judge.

13 Article 16 of the Model Law deals with the competence of an arbitral tribunal to rule on its jurisdiction. It provides:-

'(1) The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment of, an arbitrator. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope...