Moohan v Bradley (t/a Bradley Construction) & S & R Motors (Donegal) Ltd
| Jurisdiction | Ireland |
| Judge | Mr. Justice Clarke |
| Judgment Date | 31 July 2009 |
| Neutral Citation | [2009] IEHC 391 |
| Court | High Court |
| Date | 31 July 2009 |
[2009] IEHC 391
THE HIGH COURT
BETWEEN
AND
AND
AND
MOOHAN & BRADLEY (T/A BRADLEY CONSTRUCTION) v S & R MOTORS (DONEGAL) LTD 2008 3 IR 650 2007/42/8816 2007 IEHC 435
S & R MOTORS (DONEGAL) LTD v MOOHAN & BRADLEY (T/A BRADLEY CONSTRUCTION) UNREP CLARKE 12.12.2008 2008 IEHC 383
VEOLIA WATER UK PLC & ORS v FINGAL CO COUNCIL (NO 2) 2007 2 IR 81 2006/57/12085 2006 IEHC 240
ARBITRATION (INTERNATIONAL COMMERCIAL) ACT 1998 S4
RSC O.56 r4(E)
KELCAR DEVELOPMENTS LTD v MF IRISH GOLF DESIGN LTD UNREP KELLY 19.12.2007 2007/32/6548 2007 IEHC 468
RUSSELL & WALTON RUSSELL ON THE LAW OF ARBITRATION 19ED 1979
BORD NA MONA v JOHN SISK & SON LTD & ORS UNREP BLAYNEY 31.5.1990 1990/1/104
MUSTILL & BOYD THE LAW & PRACTICE OF COMMERCIAL ARBITRATION 2ED 1989 568
CLANCY & KEHOE v NEVIN UNREP LAFFOY 25.4.2008 2008/7/1294 2008 IEHC 121
LIMERICK CITY COUNCIL v UNIFORM CONSTRUCTION LTD 2007 1 IR 30 2005/36/7522 2005 IEHC 347
UNIFORM CONSTRUCTION LTD v CAPPAWHITE CONTRACTORS LTD UNREP LAFFOY 29.8.2007 2007/59/12564 2007 IEHC 295
1.1 This is yet another judgment in a long running dispute between the applicants ("Bradley Construction") and the respondent ("S. & R. Motors"). On 14 th December, 2007 I gave judgment in proceedings ( Moohan and Another v. S. & R. Motors (Donegal) Limited (2007) IEHC 435) in which Bradley Construction sued for money said to be due on foot of a construction contract for S. & R. Motors relating to a Volkswagen car showroom at Drumlonagher in Donegal town. For the reasons set out in that judgment I allowed the claim made by Bradley Construction but placed a stay on a portion of that claim pending a referral to arbitration of certain issues concerning an allegation of defective work, delay and a minor issue concerning safety.
1.2 Those issues, therefore, went to arbitration before the notice party ("the arbitrator"). Subsequent to the arbitrator making his award, S. & R. Motors challenged that award in proceedings before this court. For the reasons set out in a judgment in those proceedings delivered on 12 th December, 2008 ( S. & R. Motors (Donegal) Limited v. Moohan and Another, [2008] IEHC 383) I remitted back certain aspects of the award concerned to the arbitrator.
1.3 In substance only two matters were remitted back. The first matter concerned the way in which the arbitrator had structured his award. The arbitrator found against S. & R. Motors in respect of its allegations relating to delay and the safety issue. The arbitrator found in favour of S. & R. Motors, to some extent, in relation to its allegations concerning defects and measured the amount found to be due in respect of those defects. While a challenge was mounted to the substance of some of the findings of the arbitrator I was not persuaded, for the reasons set out in the judgment to which I have referred, that any basis for such a challenge had been made out. However, the way in which the arbitrator had structured his award was to take into account the sums due by S. & R. Motors to Bradley Construction and reduce those sums by the amount found to represent the defects identified so as to award Bradley Construction the net balance.
1.4 For the reasons set out in the judgment to which I have referred, I came to the view that it was not open to the arbitrator to make an award in respect of the sums undoubtedly due under the contract by S. & R. Motors to Bradley Construction because those sums had already been dealt with by the court. The matter was remitted back to the arbitrator to allow him to correct that matter. However, in addition, the award by the arbitrator of costs (which was, necessarily, influenced by the way in which he had structured his award) was also remitted back. In the course of the relevant judgment I drew attention to jurisprudence identified in cases such as Veolia Water UK plc and Ors v. Fingal County Council [2007] 2 I.R. 81 concerning the proper approach to costs.
1.5 The matter was then reconsidered by the arbitrator who made a revised award (described by the arbitrator as a corrected award) in which full costs were given to S. & R. Motors on the basis that S. & R. Motors had succeeded in the arbitration, albeit for a sum significantly below the amount claimed and notwithstanding the fact that S. & R. Motors' claim in respect of delay had not been allowed at all.
1.6 This further challenge is brought by Bradley Construction against the corrected award made by the arbitrator arising out of the remittal back to which I have referred ("the corrected award"). The arbitrator, while served with these proceedings, did not participate.
1.7 Against that background it is necessary to touch briefly on the issues which arise.
2.1 In substance two issues arose at the hearing before me. The first concerned whether Bradley Construction are out of time to bring this challenge.
2.2 The second issue concerned the substantive challenge to the corrected award so far as costs are concerned. In that context it is said that the corrected award in respect of costs contains an error on the face of the award such that the award should be set aside and/or remitted back to the arbitrator. It is appropriate to turn to the time in question first.
3.1 An initial question under this heading arose as to the appropriate characterisation of this arbitration in relation to whether it is properly described as an international arbitration governed by the Arbitration (International Commercial) Act, 1998 ("the 1998 Act") or whether it is a purely domestic arbitration.
3.2 The importance of the distinction stems from the adoption, by virtue of s. 4 of the 1998 Act, of the Model Law of the United Nations Commission on International Trade Law ("UNCITRAL Model Law") into Ireland for the purposes of international arbitration.
3.3 Article 34(3) of the UNCITRAL Model Law provides as follows:-
"An application for setting aside may not be made after three months have elapsed from the date in which the party making that application has received the award or, if a request had been made under Article 33, from the date on which that request has been disposed by the Arbitral Tribunal."
3.4 Thus, it would appear that there is a strict three month limit contained in the UNCITRAL Model Law in respect of which no possibility for an extension of time exists. It is also important to note that, in accordance with the terms of Article 34(3) of the UNCITRAL Model Law, time begins to run when the party seeking to set aside "has received the award".
3.5 The time limits in respect of purely domestic arbitration challenges are to be found in Order 56(4)(e) of the Rules of the Superior Courts. That rule provides that an application to remit or set aside an award "shall be made within six weeks after the award has been made and published to the parties or within such further time as may be allowed by the court". In Kelcar Developments Limited v. M.F. Irish Golf Design Limited, [2007] IEHC 468, Kelly J. adopted a passage from Russell on Arbitration in following terms as setting out correctly the position in this jurisdiction relating to when an arbitral award can be said to have been published to the parties:-
"Publication to the parties of an award (as distinct from "publication" of it simply) entails both completion of the award so that the arbitrator has finally adjudicated and retains no power of altering it, and also notice to the parties that this has been done. It is immaterial, however, whether or not the parties are then made acquainted with the contents of the award or received copies of it."
3.6 However, as noted by Kelly J., the position under the Rules of the Superior Courts permits an extension of time in an appropriate case. As to the criteria to be applied, Kelly J. adopted the test identified by Blayney J. in Bord Na Mona v. John Sisk and Son Limited, (The High Court, Unreported, Blayney J., 31 st May, 1990). While noting that there is no rigid test because the only overall criteria is as to whether the interest of justice require that time should be enlarged, Blayney J. nonetheless quoted, as of assistance, the factors identified by Mustill J. in Commercial Arbitration (2 nd Ed.) which Mustill J. co-authored with Boyd. The relevant list is to be found at p. 568 of that book and is as follows:-
"1. The desirability of adhering to time limits prescribed by Rules of Court.
The likelihood of prejudice to the party opposing the application if time is extended.
The length of delay by the applicant.
Whether the applicant has been guilty of unreasonable or culpable delay.
Whether the applicant has a good arguable case on the merits."
3.7 Laffoy J in Clancy and Anor v Nevin (2008) IEHC 121, followed the test identified by Kelly J in Kelcar both in respect of when time runs and the criteria for adjudicating on an...
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