John Mowlem Construction Ltd (t/a Irishenco Construction) & Carillion Irishenco (formerly Irishenco Construction) v Dublin City Council & Higgins

JurisdictionIreland
CourtHigh Court
JudgeMr. Justice William M. McKechnie
Judgment Date20 February 2009
Neutral Citation[2009] IEHC 225
Date20 February 2009

[2009] IEHC 225

THE HIGH COURT

[No. 112 M.C.A 2007]
John Mowlem Construction Ltd (t/a Irishenco Construction) & Carillion Irishenco (formerly Irishenco Construction) v Dublin City Council & Higgins
IN THE MATTER OF THE ARBITRATION ACTS 1954 - 1998
AND IN THE MATTER OF AN ARBRITRATION BETWEEN JOHN MOWLEM CONSTRUCTION LIMITED T/A IRISHENCO CONSTRUCTION
CLAIMANT

AND

DUBLIN CITY COUNCIL
DEFENDANT
AND IN THE MATTER OF AN APPLICATION PURSUANT TO ORDER 56 OF THE RULES OF THE SUPERIOR COURTS

BETWEEN

CARILLION IRISHENCO FORMERLY KNOWN AS IRISHENCO CONSTRUCTION
APPLICANT

AND

DUBLIN CITY COUNCIL AND JOHN HIGGINS
RESPONDENTS

UNIFORM CONSTRUCTION LTD v CAPPAWHITE CONTRACTORS LTD UNREP LAFFOY 29.8.2007 2007/59/12564 2007 IEHC 295

BERNSTEIN & WOOD HANDBOOK OF ARBITRATION PRACTICE 2ED 1993 388

TAME SHIPPING LTD v EASY NAVIGATION LTD (THE EASY RIDER) 2004 2 LLOYDS 626 2004 2 AER (COMM) 521

CZARNIKOW & CO LTD v ROTH, SCHMIDT & CO 1922 AER REP 45 1922 2 KB 478

MUTUAL SHIPPING CORP OF NEW YORK v BAYSHORE SHIPPING CO OF MONROVIA (THE MONTAN) 1985 1 WLR 625 1985 1 AER 520 1985 1 LLOYDS 189

ARBITRATION ACT 1950 S22 (UK)

ARBITRATION ACT 1950 S23 (UK)

ARBITRATION ACT 1954 S38

ARBITRATION ACT 1954 S36

MUTUAL SHIPPING CORP OF NEW YORK v BAYSHORE SHIPPING CO OF MONROVIA (THE MONTAN) 1984 1 LLOYDS 389

ARBITRATION ACT 1996 S68 (UK)

ATLANTIC LINES & NAVIGATION CO INC v ITALMARE SPA (THE APOLLON) 1985 1 LLOYDS 597

ARBITRATION ACT 1954 S37

KIRIL MISCHEFF LTD v CONSTANT SMITH & CO 1950 2 KB 616 1950 1 AER 890

SOCIETE FRANCO-TUNISIENNE D'ARMEMENT-TUNIS v GOVT OF CEYLON (THE MASSALIA) 1959 1 WLR 787 1959 3 AER 25 1959 2 LLOYDS 1

ABRAHAMSON ENGINEERING LAW & THE I C E CONTRACTS 4ED 1979

HUDSON BUILDING & ENGINEERING CONTRACTS 11ED 1994

SIMPLEX CONCRETE PILES LTD v ST PANCRAS BOROUGH COUNCIL 1958 14 BLR 80

MUSTILL & BOYD THE LAW & PRACTICE OF COMMERCIAL ARBITRATION IN ENGLAND 1982 266

YAMASHITA SHINNIHON STEAMSHIP CO LTD v ELIOS SPA (THE LILY PRIMA) 1976] 2 LLOYDS 487

SCOTT v AVERY 1859 25 LJ EX 308 1843-60 AER REP 1

ARBITRATION ACT 1954 S27

ARBITRATION ACT 1954 S35

ARBITRATION ACT 1889 S11

ARBITRATION ACT 1934 S15 (UK)

KEENAN v SHIELD INSURANCE CO LTD 1988 IR 89 1988/2/325

MCSTAY v ASSICURAZIONI GENERALI SPA 1991 ILRM 237 1991 ILT 126 1990/9/2720

MCCARTHY v KEANE & ORS 2004 3 IR 617 2005 2 ILRM 241 2004/33/7696

LIMERICK CITY COUNCIL v UNIFORM CONSTRUCTION LTD 2007 1 IR 30 2005/36/7522 2005 IEHC 347

MCCARRICK v THE GAIETY (SLIGO) LTD 2001 2 IR 266 2002 1 ILRM 55 2002/19/4846

KING v THOMAS MCKENNA LTD 1991 2 QB 480 1991 2 WLR 1234 1991 1 AER 653

CHAMPSEY BHARA & CO v JIVRAJ BALLO SPINNING & WEAVING CO LTD 1923 AC 480 1923 AER REP 235

WILLIAMS v WALLIS & COX 1914 2 KB 478

SHEAHAN v FBD INSURANCE PLC UNREP SUPREME 20.7.1999 (EX TEMPORE)

RUSSELL RUSSELL ON THE LAW OF ARBITRATION 20ED 1982 422

MUSTILL & BOYD THE LAW & PRACTICE OF COMMERCIAL ARBITRATION IN ENGLAND 1982 602

RUSSELL RUSSELL ON THE LAW OF ARBITRATION 20ED 1982 398-9

MACPHERSON TRAIN & CO LTD v J MILHEM & SONS (NO 1) 1955 2 LLOYDS 59

MILLER CONSTRUCTION LTD v JAMES MOORE EARTHMOVING 2001 BLR 10

PHONOGRAPHIC PERFORMANCE (IRL) LTD v CODY 1998 4 IR 504

DOYLE v KILDARE CO COUNCIL & SHACKLETON 1995 2 IR 424 1994/2/473

GILLESPIE BROS & CO v THOMPSON BROS & CO 1922 13 LLOYDS 519

OLEIFICIO ZUCCHI SPA v NORTHERN SALES LTD 1965 2 LLOYDS 496

ARBITRATION

Award

Set aside award - Removal of arbitrator - Construction agreement - Dispute regarding additional payment and extension of time for works - Rejection of claims by engineer - Appointment of arbitrator - Whether award to be reasoned - Whether court entitled to consider reasons where agreement by parties that reasons do not form part of award - Balancing of private interest in party autonomy and public interest in finality of awards - Whether affidavit of arbitrator could be considered - Interim award - Whether arbitrator misconducted arbitration - Whether failure to consider and adjudicate on central submission - Whether failure to comply with express assurance that legal advice on admissibility would be sought - Whether reliance on evidence not disclosed to parties - Whether documentary hearsay evidence contradicted by oral evidence accepted - Whether award irrational or unreasonable - Whether excess of jurisdiction - Whether partiality - Whether error on face of award - Supervisory role of court - Interference with awards - Policy considerations - Circumstances where remittal appropriate - Test for misconduct - Acts amounting to misconduct - Whether site instruction issued under duress - Whether arbitrator entitled to consider extension of time issue - Whether arbitrator entitled to consider costs and interest - Uniform Construction Ltd v Cappawhite Contractors Ltd (Unrep, Laffoy J, 29/8/2007) [2007] IEHC 295; Thames Shipping Ltd v AT Navigation Ltd [2004] 1 Lloyd's Rep 626; Czarnikow & Company Ltd v Roth, Schmidt & Co [1922] All ER 45; Mutual Shipping Corp v Bayshore Shipping Co Ltd [1985] 1 WLR 625; Montan and Atlantic Lines and Navigation Co Inc [1985] 1 Lloyd's Rep 597; Kiril Mischeff Ltd v Constant Smith [1950] 2KB 616; Societé Franco-Tunisienne d'Armement-Tunis v Government of Ceylon [1959] 1 WLR 787; Annie Fox v PG Wellfair Ltd [1981] 2 Lloyd's Rep 214; Simplex Complex Piles Ltd v Metropolitan Borough of St Pancreas (1958) 14 BLR 8; Yamashita Shinnihon Steam Ship Co Ltd v Elios SPA [1976] 2 Lloyd's Rep 587; Scott v Avery (1859) 25 LR Ex 308; Keenan v Shield Insurance Co Ltd [1988] IR 89;McStay v Assicurazione Generali SPA [1991] ILRM 237; McCarthy v Keane [2004] 3 IR 617; Limerick City Council v Uniform Construction Ltd [2005] IEHC 347, [2007] 1 IR 30; McCarrick v The Gaeity (Sligo) Ltd [2001] 2 IR 266; King v Thomas McKenna Ltd [1991] 2 QB 480; Champsey Bhara & Co v Jivraj Balloo Spinning and Weaving Company Ltd [1923] AC 480; Williams v Wallis & Cox [1914] 2 KB 478; Sheehan v FBD Insurance Plc (Unrep, SC, 20/7/1999); McPherson Train & Co Ltd v Milhem & Sons [1955] 2 Lloyd's Rep 59; Miller Construction Ltd v James Moore Earth Moving [2001] BLR 1; Phonographic Performance (Ireland) Ltd v Cody [1990] 2 IR 504; Doyle v Kildare County Council [1995] 2 IR 424; Gillespie Bros v Thompson Bros [1922] 13 Lloyd's Rep 519 and Oleificio Zucchi v Northern Sales Ltd [1965] 2 Lloyd's Rep 496 considered - Arbitration Act 1954 (No 26), ss 27, 36, 36, 38 and 56 - Relief refused save as relating to costs and interest (2007/112MCA - McKechnie J - 20/2/2009) [2009] IEHC 225

John Mowlem Construction Ltd v Dublin City Council & Carillion Irishenco v Dublin City Council

Facts: The claimant entered into an agreement to carry out certain works involving the construction of the James Joyce Bridge in Dublin. The claimant/ applicant issued a claim which was resisted by the defendant and resulted in arbitration. The core question before the Arbitrator was whether the applicant was entitled to payment for the costs incurred in the fabrication of the structural steel framework for the box girders used in the bridge. The applicant's claim was dismissed by the arbitrator and resulted in the proceedings. The applicant/ claimant sought to have the award set aside on the grounds of inter alia alleged misconduct of the arbitrator in failing to consider a central submission, in failing to comply with an assurance to seek legal advice and in granting an irrational award.

Held by McKechnie J. that an arbitration award would only be set aside if the impugned conduct was "so fundamental" that it could not be allowed to stand. It would be grossly unfair to the City Council if all of these findings were set at nought by setting aside the award and removing the Arbitrator. The pre-trial procedure was most extensive, the documentation substantial, the expertise of the assembled witnesses renowned, with most if not all meeting in the UK for four days before the arbitration started. The costs to date were very significant. There would be no injustice to the applicant which lost on every fact/ technical issue before the Arbitrator if his award would stand. Its complaints did not relate to any such issues. There was no injustice in refusing the reliefs claimed.

Reporter: E.F.

1

JUDGMENT of Mr. Justice William M. McKechnie delivered on the 20th day of February 2009

2

1. On the 29 th March 2001, Carillion Irishenco Limited (formerly known as John Mowlem Construction Limited t/a Irishenco Construction) entered into an Agreement with Dublin City Council (the "Respondent", "D.C.C." or "the City Council") to carry out certain works involving the construction of a bridge, now known as the James Joyce Bridge (formerly referred to as the Blackhall Place Bridge), in Dublin. This Agreement (the "Main Contract"), which incorporated the various documents identified at para. 2 thereof, was based on the Institute of Engineers of Ireland ("I.E.I."), 3 rd Ed. 1980 Contract, as revised and reprinted in October 1990 and as amended by the parties. The Engineer appointed for the purposes of the contract was Roughan and O'Donovan, Consulting Engineers ("the Engineer"). The bridge was designed by a Spanish firm, Santiago Calatrava Vallis ("the Designer"). As permitted under the Main Contract the applicant entered into a sub-contract with Harland & Wolff Heavy Industries Limited (the "Subcontractor", "Harland & Wolff", or "H&W") for the steel work fabrication involved in the erection of this bridge.

3

2. The contract work price was €6.3 million inclusive of VAT and the contract period was eleven months. Difficulties arose during the construction of these works; these led to the applicant ("Irishenco") seeking payment of an additional sum of €6,454,846.46 and to the actual works lasting for a period of 26 months. This claim, which was resisted by the City Council and rejected by the Engineer under Clause...

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