Mayo County Council v Joe Reilly Plant Hire Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Brian McGovern
• Judgment Date: 31 July 2015
• Neutral Citation: [2015] IEHC 544
• Court: High Court
• Date: 31 July 2015

[2015] IEHC 544

THE HIGH COURT

[No. 188 MCA/2015]

Mayo Co Council v Joe Reilly Plant Hire Ltd

IN THE MATTER OF THE ARBITRATION ACT 2010

IN THE MATTER OF SECTION 9 OF THE ARBITRATION ACT 2010

IN THE MATTER OF ARTICLE 16(3) OF THE UNCITRAL MODEL LAW

BETWEEN

MAYO COUNTY COUNCIL

APPLICANT

AND

JOE REILLY PLANT HIRE LIMITED

RESPONDENT

Arbitration – The Arbitration Act 2010 – Art. 16 (3) of the UNCITRAL Model Law – O. 56, r. 1 (3) (f) of the Rules of the Superior Court, 1986 – Jurisdiction of arbitrator – Competence-competence principle

Facts: The applicant sought a declaration that the arbitrator had no jurisdiction to adjudicate a claim made by the respondent against the applicant in relation to costs of works carried out by the respondent on behalf of the applicant based on a contract between the applicant and the respondent. The applicant contended that there being accord and satisfaction, it ceased the agreement between the parties.

Mr. Justice Brian McGovern refused to grant the declaration to the applicant. The Court held that the arbitration clause in a contract would be an independent agreement giving jurisdiction to the arbitrator who was entitled to inquire upon a preliminary hearing as to whether he had jurisdiction to adjudicate the dispute. The Court found that the issues concerning accord and satisfaction in a contract were for the arbitrator to determine and it could not give or take the jurisdiction already assigned to the arbitrator. The Court held that a challenge under art. 16 (3) of the UNCITRAL Model Law was a challenge to the arbitrator's jurisdiction and it was not an appeal against the construction of the agreement by the arbitrator. The Court held that art. 16 (1) of the UNCITRAL Model Law gave powers to the arbitrator to rule on its own jurisdiction, including objections regarding validity of an arbitration agreement.

1 JUDGMENT of Mr. Justice Brian McGovern delivered on the 31st day of July, 2015

2 1. The applicant seeks a declaration pursuant to O. 56, r. l(3)(f) of the Rules of the Superior Courts, 1986 and Article 16(3) of the UNCITRAL Model Law, that Dr. Brian Boad, an arbitrator, has no jurisdiction pursuant to a contract dated 23 ^rd July, 2004, between the applicant and the respondent, to enter upon an adjudication of a claim made by the respondent against the applicant in respect of the costs of works carried out by the respondent on behalf of the applicant.

3 2. On 11 ^th May, 2015, the arbitrator concluded that he had jurisdiction to arbitrate a dispute between the parties arising out of the remediation of a landfill site between 2004 and 2009. The contract was dated November 2003 and revised in February 2004. The works in question were executed between 2004 and 2009. After the respondent concluded work on the site in 2009, the parties were unable to agree on the final sum due. On 16 ^th February, 2011, the engineer under the contract issued a final determination directing that the balance of €127,408.21 be paid to the respondent. Payment issued to the respondent on 24 ^th February, 2011, and on 2 ^nd March, 2011, the respondent cashed the payment without qualification.

4 3. On 26 ^th August, 2013, two and a half years later, the respondent issued a notice of dispute on the applicant and on 26 ^th February, 2014, served a notice of referral to arbitration. The arbitration clause is to be found in Clause 66 of the agreement. Clause 66(1) reads as follows:-

"Except as otherwise provided for in these Conditions if a dispute of any kind whatsoever arises between the Employer and the Contractor in connection with or arising out of the Contract or the carrying out of the Works including any dispute as to any decision opinion instruction direction certification or evaluation of the Engineer (whether during the process of the works or after their completion and whether before or after the determination abandonment or breach of the contract) it shall be determined in accordance with the following provisions…"

5 4. The clause is wide in its terms and encompasses disputes whether arising during the process of the works or after their completion and after the determination of the contract.

6 5. The applicant argues that because the respondent accepted payment in March 2011 without qualification that there was accord and satisfaction. In Heyman v. Darwins Limited [1942] A.C. 356, Macmillan J. stated at pp. 373 and 374:-

"…an arbitration clause in a contract… is quite distinct from the other clauses. The other clauses set out the obligations which the parties undertake towards each other … but the arbitration clause does not impose on one of the parties an obligation in favour of the other. It embodies the agreement of both parties that, if any...