JJ Rhatigan & Company Ltd v Paragon Contracting Ltd & Roughan
| Jurisdiction | Ireland |
| Judge | Mr. Justice Roderick Murphy |
| Judgment Date | 13 February 2009 |
| Neutral Citation | [2009] IEHC 117 |
| Court | High Court |
| Docket Number | [5 MCA/2008] |
| Date | 13 February 2009 |
[2009] IEHC 117
THE HIGH COURT
AND
AND
AND
ARBITRATION ACT 1954 S27
ARBITRATION ACT 1954 S38
RSC O.54 r4
ARBITRATION ACT 1954 S36
ARBITRATION ACT 1954 S37
ARBITRATION ACT 1954 S40
UNIFORM CONSTRUCTION LTD v CAPPAWHITE CONTRACTORS LTD UNREP LAFFOY 29.8.2007 2007/59/12564 2007 IEHC 295
MUSTILL, BOYD THE LAW & PRACTICE OF COMMERCIAL ARBITRATION IN ENGLAND 2ED 1989 373
ST JOHN SUTTON, GILL, GEARING RUSSELL ON ARBITRATION 23ED 2007 PARA 6.028
BREMER HANDELSGESELLSCHAFT MBH v WESTZUCKER GMBH (NO 2) 1981 2 LLOYD'S 130
BORD NA MONA v JOHN SISK & SON LTD 1990 1 IR 85 1990/1/121
DUBLIN & COUNTY BROADCASTING LTD v INDEPENDENT RADIO & TELEVISION CMSN UNREP MURPHY 12.5.1989 (TRANSCRIPT NOT AVAILABLE)
ARBITRATION ACT 1954 S38(1)
MCCARTHY v KEANE & ORS 2004 3 IR 617 2005 2 ILRM 241 2004/33/7696 2004 IESC 104
KEENAN v SHIELD INSURANCE CO LTD 1988 IR 89 1988/2/325
KING v THOMAS MCKENNA LTD 1991 2 QB 480 1991 2 WLR 1234 1991 1 AER 653
JH RAYNER (MINCING LANE) LTD v SHAHER TRADING CO 1982 1 LLOYD'S 632
MUSTILL, BOYD THE LAW & PRACTICE OF COMMERCIAL ARBITRATION IN ENGLAND 2ED 1989 377-388
ARBITRATION
Set aside
Application to remit or set aside award - Misconduct alleged - Reasons for award set out in separate document - Privileged material accidently disclosed - Reasons sent to party directly instead of to legal representatives - Inappropriate remarks made -Whether misconduct - Whether award with reasons in separate document valid - Whether reasons inadequate - Whether award ambiguous and inaccurate - Whether bias - Whether failure to deal with counterclaim - Whether issue of termination of contract addressed - Whether prejudice to applicant - IEI rules - Bremer Handelgesellschaft v Westzucker [1981] 2 Lloyds Rep 130, Bord na Mona v John Sisk & Son Ltd [1990] 1 IR 85, McCarthy v Keane [2004] IESC 104 [2004] 3 IR 617, Keenan v Shield Insurance Company Ltd [1988] IR 89, King v Thomas McKenna Ltd [1991] 2 QB 480 and JH Rayner v Shaher Trading Co [1982] Lloyds Rep 632 considered; Uniform Construction Ltd v Cappawhite Contractors Ltd [2007] IEHC 295 (Unrep, Laffoy J, 29/8/2007) distinguished - Arbitration Act 1954 (No 26), ss 27, 36, 37, 38 and 40 - Rules of the Superior Courts 1986 (SI 15/1986), O 54, r 4 - Matter remitted to arbitrator (2008/5MCA - Murphy J - 13/2/2009) [2009] IEHC 117
JJ Rhatigan & Company Ltd v Paragon Contracting Ltd
Facts: The plaintiff was a contractor and the second named defendant made an award determining liability. Five issues were put before an arbitrator and a sum was awarded. The plaintiff alleged bias or misconduct on the part of the arbitrator and sought to have the award set aside and /or the arbitrator removed pursuant to the Arbitrator Act 1954 or to have the award remitted to the arbitrator. The plaintiff contended that the arbitrator was bound to give reasons.
Held by Murphy J. that the arbitrator had discretion under the relevant rules to provide reasons separate to the award. The document listing the reasons behind the award answered all but one of the issues identified in the award. To accord with best practice, the arbitrator should make an explicit award on claims and counterclaim. The award should state reasons in sufficient details. The Court would remit the matter for reconsideration of the arbitrator.
Reporter: E.F.
Mr. Justice Roderick Murphy delivered on the 13th day of February, 2009.
The plaintiff, J.J. Rhatigan & Company Limited (Rhatigan) was the contractor and Paragon Contracting Limited, the first named defendant (Paragon) was the steel work subcontractor for the CSCB Building at University College, Dublin.
The second-named defendant (the arbitrator) made an award on 6 th February, 2007, determining Rhatigan's liability to Paragon and the former's counterclaim. The reasons related to the credibility of the witness rather than to the quantum of claim and counterclaim.
The award found five issues having not been settled by the parties and which were put before the arbitrator for determination. The award noted the claimant's (Paragon's) claim being €305,347 plus VAT and the respondent's (Rhatigan's) counterclaim being for €388,418 plus VAT.
The arbitrator awarded and directed that Rhatigan pay Paragon the sum of €175,000. The award itself did not give reasons but indicated on an accompanying compliment slip that reasons would follow under separate cover. The reasons and background to the final award of 6 th February, 2007, were listed in a separate document. That document gave a précis and assessment of the evidence of four witnesses.
In these present proceedings Rhatigan alleges misconduct by the arbitrator and seeks to have the award set aside and/or the arbitrator removed pursuant to sections 27 and 38 of the Arbitration Act 1954 and Order 54 Rule 4 of the Rules of the Superior Courts. Alternatively, the plaintiff seeks to have the award remitted to the arbitrator pursuant to s.36 of the Arbitration Act 1954.
The first named defendant, Paragon, was the specialist contractor to the plaintiff, Rhatigan, pursuant to a sub-contract agreement made between the parties on 18 th May, 2004. It was agreed that Paragon would provide drawings, and would supply, install and fabricate structural steelwork for the proposed CSCB building at University College Dublin. The subcontract price was €247,000. It was alleged by Rhatigan that Paragon failed to carry out the works in accordance with the sub-contract, and failed to rectify those failures. Rhatigan terminated the employment of Paragon on 29 th October, 2004, pursuant to paragraph 19 of the sub-contract. A dispute arose between the parties and in accordance with paragraph 25 of the subcontract, this matter was referred to arbitration. The parties agreed to appoint the second named defendant to act as arbitrator.
On 22 nd January, 2006, the arbitrator directed, inter alia, that the rules governing the arbitration would be the Institution of Engineers of Ireland Arbitration Procedure 2000 (hereinafter the IEI rules) and that there would be a reasoned award at the conclusion of the arbitration. There was no evidence before the court as to what the parties sought in this preliminary meeting leading to the directions of the arbitrator.
Rule 20 of the IEI rules provides:
2 "20.1 The Arbitrator shall not provide reasons for the award unless requested to do so by at least one of the parties. If so requested and unless both parties request that reasons form part of the award, the Arbitrator shall have a discretion as to whether such reasons form part of the award or are provided in a separate document not forming part of the award.
3 20.2 The Arbitrator shall not be required to provide reasons for a summary award."
Paragon, as claimant in the arbitration, submitted its Statement of Case on 6 th February, 2006. A defence and counterclaim was served by Rhatigan on 23 rd February, 2006. The counter-claim was based on the loss suffered arising out of the alleged default and delay of Paragon, which included, inter alia, the extra cost incurred by Rhatigan by having to employ an alternative sub-contractor, Bisset Engineering Ltd (hereinafter referred to as Bisset.)
The arbitrator heard the dispute on 5 th, 6 th, 7 th, 8 th and 14 th September, 2006. Extensive submissions were then made by both Paragon on 13 th October and Rhatigan on 16 th October, 2006.
By e-mail of 5 th February, 2007, the arbitrator informed the parties that he intended to publish the award "followed on shortly by the reasons for the award." The arbitrator published his final award, save as to costs and interests, on the following day, 6 th February, 2007. Having recited preliminary matters, the award continued as follows:
"I, NOW, having considered the documentary and oral evidence and the submissions of the advocates at the hearing, FIND the remaining issues not settled by the Parties and put before me for determination to be as follows:-"
(i) The quality and phasing of the steel fabrication drawings,
(ii) The quantity of steel fabricated for the project,
(iii) The Bisset contract and the Paragon cut-off point,
(iv) The steel tender documents including the question of drawing approvals,
(v) And the counterclaim of the respondent.
The Claimant's claim is for €305,347 plus costs plus VAT
The Respondent's counterclaim is for €388,418 plus interest plus VAT.
AND ACCORDINGLY I AWARD AND DIRECT THAT:-
2 1.01.1 The Respondent shall pay to the Claimant the sum of €175,000.00 (one hundred and seventy five thousand euro plus VAT) in full and final settlement of all claims referred to me herein. The Respondent shall pay to the Claimant the amount of the Award within four weeks of receipt of this Award.
3 1.01.2 The parties' costs in the arbitration shall be paid by such party or parties as I may direct in a future award after hearing both parties on that issue."
A compliments slip accompanying the award stated:-
"Herewith my final award save as to costs and interest. Reasons to follow under separate cover."
The award itself made no reference to reasons being given at a later date.
On 20 th March, 2007, the arbitrator sent the parties a document entitled "Reasons and background for final award 6 th February, 2007" which purported to list the reasons behind the award. That document purported to list the reasons behind the Award. It...
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