Bowen Construction Ltd ((in Receivership)) v Kelly's of Fantane (Concrete) Ltd ((in Receivership))

JurisdictionIreland
JudgeMr. Justice David Barniville
Judgment Date06 December 2019
Neutral Citation[2019] IEHC 861
Date06 December 2019
Docket Number[2018 No. 76 MCA]
CourtHigh Court

[2019] IEHC 861

THE HIGH COURT

David Barniville

[2018 No. 76 MCA]

IN THE MATTER OF THE ARBITRATION ACT 2010 AND IN THE MATTER OF AN ARBITRATION

BETWEEN
BOWEN CONSTRUCTION LIMITED (IN RECEIVERSHIP)

AND

SOMAGUE ENGENHARIA SOCIEDADE ANOMINA TRADING TOGETHER IN JOINT VENTURE AS BOWEN SOMAGUE JV
APPLICANT
AND
KELLY'S OF FANTANE (CONCRETE) LIMITED (IN RECEIVERSHIP)
RESPONDENT

Arbitration – Jurisdiction – Joint venture – Applicant seeking an order deciding that the arbitrator did not have jurisdiction over certain parts of the claims made in the arbitration – Whether the arbitrator did have jurisdiction in relation to the relevant parts of the respondent’s claim

Facts: An application by a joint venture between Bowen Construction Ltd (in receivership) and Somague Engenharia SA, a Portuguese company, which was a party to an arbitration brought by Kelly’s of Fantane (Concrete) Limited (in receivership), challenged a ruling by the arbitrator pursuant to Article 16(3) of the UNCITRAL Model Law on International Commercial Arbitration 1985 (as amended in 2006) (the Model Law), that she had jurisdiction over certain parts of the claims made in the arbitration. In this High Court judgment, the applicant to this application was referred to as the “respondent” (as it was the respondent in the arbitration) and the respondent to the application was referred to as the “claimant” (as it was the claimant in the arbitration). In the course of the arbitration, the respondent contended that the arbitrator did not have jurisdiction over certain parts of the claim sought to be advanced by the claimant as those claims had not been referred to in the notice referring the dispute to arbitration.

Held by Barniville J that the arbitrator did have jurisdiction in relation to the relevant parts of the claimant’s claim which was the subject of this application and that the arbitrator was correct in ruling that she had such jurisdiction.

Barniville J rejected the respondent’s application for an order deciding that the arbitrator did not have jurisdiction over the contested issues.

Application refused.

JUDGMENT of Mr. Justice David Barniville delivered on the 6th day of December, 2019
Introduction
1

This is my judgment on an application by a joint venture between Bowen Construction Limited (in receivership) and Somague Engenharia SA, a Portuguese company, which is a party to an arbitration brought by Kelly's of Fantane (Concrete) Limited (in receivership). The joint venture challenges a ruling by the arbitrator pursuant to Article 16(3) of the UNCITRAL Model Law on International Commercial Arbitration 1985 (as amended in 2006) (the “Model Law”), that she has jurisdiction over certain parts of the claims made in the arbitration. For ease of reference, and to avoid endless confusion, I will refer in this judgment to the applicant to this application as the “respondent” (as it is the respondent in the arbitration) and the respondent to the application as the “claimant” (as it is the claimant in the arbitration).

2

In the course of the arbitration, the respondent contended that the arbitrator did not have jurisdiction over certain parts of the claim sought to be advanced by the claimant as those claims had not been referred to in the notice referring the dispute to arbitration. The issue on jurisdiction arose in the following circumstances. The respondent sought to rely on certain points by way of defence to the claimant's claim. It argued that, on the basis of certain determinations made by it following the termination of the relevant contract between the parties, the claimant could not succeed in certain parts of its claim which were affected by those determinations. When the claimant sought to challenge the determinations in the course of the arbitration proceedings, the respondent contended that the claimant was not entitled to do so as it had not referred those issues to arbitration and that, as a consequence, the arbitrator did not have jurisdiction to deal with the attempted challenges to its determinations.

3

The parties agreed that it was open to the respondent to rely upon its determinations by way of defence to the relevant parts of the claimant's claim. However, the parties did not agree that the claimant could, in response to the defence advanced by the respondent in reliance upon the determinations it had made, seek to challenge those determinations in the arbitration, as no such challenge had been adverted to in the notice referring the dispute to arbitration.

4

The claimant's position was that the dispute referred to arbitration encompassed a challenge to the relevant determinations and that, once it was open to the respondent to rely on the determinations by way of defence, it would in turn be open to the claimant to respond to that defence by challenging the determinations in the arbitration.

5

The arbitrator delivered a ruling on 9th March, 2018, in which she found that she did have jurisdiction in respect of the contested parts of the claimant's claim. The respondent disagreed with that ruling on jurisdiction and brought this application to the court pursuant to Article 16(3) of the Model Law requesting the court to decide the issue of jurisdiction in relation to the relevant parts of the claimant's claim.

6

The application involves a number of interesting points of law which have not previously been considered by the Irish Courts, although they have been considered elsewhere in the common law world. It will, in, due course, be necessary to consider those points, including the principles applicable to the construction of a notice referring a dispute to arbitration and to the ascertainment of the ambit or scope of a particular dispute referred to arbitration.

7

Before considering those issues, it is necessary to set out the relevant factual background contractual relationship between the parties as well as the circumstances in which the dispute between the parties was referred to arbitration and the manner in which it was dealt with in the course of the arbitration. It will be necessary to consider the function of the court and the proper approach to be taken in the context of an application under Article 16(3) of the Model Law. It will then be necessary to consider the respective contentions of the parties on the jurisdiction issue and, in that context, to address the legal principles applicable to the construction of a notice referring a dispute to arbitration and to the question as to how a court should determine whether a particular dispute (or issue within a dispute) has been referred to arbitration. Having done all that, I will set out my conclusions on the various issues.

Outcome of Application
8

I should indicate at this stage that, for the detailed reasons set out in this judgment, I have concluded that the arbitrator does have jurisdiction in relation to the relevant parts of the claimant's claim which is the subject of this application and that the arbitrator was correct in ruling that she had such jurisdiction.

Factual Background
9

There is substantial agreement between the parties as to the relevant facts. The following is a summary of the relevant facts as found by me, which I have taken from the affidavits sworn by the parties in connection with the respondent's application.

The Parties

10

The respondent is an unincorporated joint venture between Bowen Construction Limited (“Bowen”) and Somague Engenharia SA (“Somague”), a Portuguese entity, which was formed by way of an agreement between the parties made in February, 2008. Bowen went into receivership in July, 2011. Thereafter, Somague assumed all of the obligations of the joint venture under the terms of the relevant joint venture agreement. Bowen did not, therefore, participate in the proceedings.

11

The claimant, Kelly's of Fantane (Concrete) Limited, is a specialist building subcontractor providing road paving and associated works. The claimant went into receivership on 21st March, 2011.

The Contracts

12

On 31st January, 2008, the respondent and Laois County Council entered into a contract under which the respondent was to execute and complete various works, including paving works, on the N7 Castletown to Nenagh (Derrinsallagh to Ballintotty) Scheme (the “main contract”). The main contract was in the form of the “Public Works Contract for Civil Engineering Works designed by the Contractor”(19 February 2007). On 19th January, 2009, the respondent entered into a subcontract with the claimant under which the claimant was appointed to carry out and supply road surfacing works and materials to the respondent in connection with the scheme (the “subcontract”). The subcontract expressly incorporated the “Conditions of Sub-contract for use in conjunction with the Forms of Main Contract for Public Works for use with Domestic Sub-contractors”. Substantial completion of the works under the main contract was achieved on 22nd December, 2010. The respondent certified that the claimant's subcontract works were substantially complete on that date and the road was opened for public traffic around that time.

13

The parties engaged in discussions in relation to monies which were being claimed by the claimant and which it contended were outstanding from the respondent under the subcontract.

9

th March 2011 Claim

14

On 9th March, 2011, the claimant submitted a claim to the respondent under clauses 10(a), 10(b) and 10(c) of the subcontract (the “9th March, 2011 claim”). The 9th March, 2011 claim was expressly stated to incorporate sums unpaid from previous applications and included a claim for extension of time and additional costs allegedly incurred by the claimant as a result of alleged delays to the works under the subcontract which it is alleged were beyond the claimant's control. The 9th March, 2011 claim was made by way of a letter of that date which enclosed four folders of documents...

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2 cases
  • Narooma Ltd v Health Service Executive
    • Ireland
    • High Court
    • 26 June 2020
    ...on that issue again more recently in Bowen Construction Ltd ((in Receivership)) v Kelly's of Fantane (Concrete) Ltd ((in Receivership)) [2019] IEHC 861 (at paras. 80 I will, therefore, proceed to consider the issue as to whether clause 21 amounts to an “arbitration agreement” for the purpos......
  • Coen v Doyle
    • Ireland
    • High Court
    • 25 March 2021
    ...IEHC 357; Townmore (No. 2); and Bowen Construction Ltd (In Receivership) & anor v. Kelly's of Fantane (Concrete) Ltd (In Receivership) [2019] IEHC 861. 19 In the present case, the court will have to consider the issue as to whether an arbitration agreement exists between the relevant partie......
1 firm's commentaries
  • Construction Arbitration: Ireland
    • Ireland
    • Mondaq Ireland
    • 19 August 2022
    ...must be given to this question in Bowen Construction Ltd ((in Receivership)) v Kelly's of Fantane (Concrete) Ltd ((in Receivership)) [2019] IEHC 861. The guidance in these cases was reiterated in Narooma Ltd v Health Service Executive [2020] IEHC The High Court also commented on the approac......

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