Court Upholds Binding Nature Of A Conciliator’s Recommendation Under RIAI Contract

Author:Ms Niav O'Higgins and Karen Killoran
Profession:Arthur Cox

In Wise Construction (Limerick) Limited v Donal Ryan Motor Group (Roscrea) Limited (2012, unreported), the Irish High Court upheld the binding nature of a conciliator's recommendation and acknowledged the mandatory nature of conciliation as a first step in the dispute resolution process under the Royal Institute of the Architects of Ireland (RIAI) contract. Background In March 2008, the plaintiff, Wise Construction Limited (the contractor) agreed to carry out certain construction works at the employer's business premises in Tipperary, including an extension to its existing car sales showroom and the construction of ancillary office accommodation. The conditions of contract entered into by the parties were the standard RIAI conditions with quantities (2002 edition) with some minor amendments. When the works reached practical completion, the architect issued two payment certificates (including one in respect of the first tranche of retention monies) certifying the combined amount of €74,363.01 as due and owing to the contractor. The contractor duly raised invoices which were met with a letter from the employer refusing to pay on the basis of alleged defects in the works. Contractor's Claim The contractor sought to have the payment certificates enforced by way of summary judgment. The employer resisted this, asserting that: a dispute existed between the parties under the contract; and in accordance with clause 38 of the contract, the dispute should be referred to conciliation. With a view to expediting resolution of the issues, the contractor instigated a conciliation process with respect to the recovery of the certified sums. The parties did not agree on the appointment of a conciliator and a conciliator was appointed by the RIAI upon the request of the contractor. Despite being written to by the contractor's solicitors on numerous occasions and also by the conciliator, the employer and its solicitors refused to engage in any manner in the conciliation process including: failing to sign the conciliator's form of appointment; not responding to the contractor's submission despite being called on to do so; and not discharging its share of the conciliator's fees. Since the contract provided for conciliation as a mandatory first step before arbitration could be initiated, the contractor discharged the conciliator's fees on behalf of both itself and the employer and requested that the conciliator issue a recommendation. Conciliator's...

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