Braes of Doune Wind Farm (Scotland) Ltd v Alfred McAlpine Business Services Ltd [QBD (TCC)]
| Jurisdiction | England & Wales |
| Judge | Akenhead J. |
| Judgment Date | 13 March 2008 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 13 March 2008 |
Queen's Bench Division (Technology and Construction Court).
Akenhead J.
David Sears QC and Serena Cheng (instructed by Shepherd and Wedderburn) for the claimant.
Andrew Bartlett QC (instructed by Dundas & Wilson LLP) for the defendant.
The following cases were referred to in the judgment:
Bramall & Ogden Ltd v Sheffield City CouncilUNK (1983) 29 BLR 76.
C v D [2007] EWHC 1541 (Comm); [2007] 1 CLC 1038.
CMA CGM SA v Beteiligungs KG MS Northern Pioneer Schiffahrtsgesellschaft mbH & Co [2003] 1 CLC 141.
Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor CoELR [1915] AC 79.
Keydon Estates Ltd v Western Power Distribution (South Wales) LtdUNK [2004] EWHC 996 (Ch).
Naviera Amazonica Peruana SA v Compania Internacionale de Seguros del PeruUNK [1988] 1 Ll Rep 116.
Arbitration — Seat of arbitration — Engineering, procurement and construction contract — Contract governed by English law and, subject to provisions for dispute resolution, courts of England and Wales to have exclusive jurisdiction — Arbitration to be in accordance with Construction Industry Model Arbitration Rules — Seat of arbitration to be Glasgow — Whether English court had jurisdiction to entertain application for permission to appeal on point of law — Parties' agreement that seat of arbitration was to be Glasgow related to place where hearings should take place — Contract overall provided for curial law or law which governed arbitral proceedings to be that of England and Wales — Where parties agreed that laws of one country would govern and control arbitration, place where arbitration was to be heard would not dictate governing or controlling law — Arbitration Act 1996, s. 2, 3, 69.
These were applications by the claimant for leave to appeal against an arbitration award on a question of law and by the defendant for a declaration that the court had no jurisdiction to entertain such an application and for leave to enforce the award.
The award related to an engineering, procurement and construction (EPC) contract between the claimant employer and the defendant contractor, whereby the contractor undertook to carry out works in connection with the provision of 36 wind turbine generators at a site near Stirling in Scotland. The award dealt with the enforceability of the clauses of the EPC contract which provided for liquidated damages for delay.
The EPC contract provided that it was to be governed by and construed in accordance with the laws of England and Wales and, subject to clause 20.2 (Dispute resolution), the parties agreed that the courts of England and Wales had exclusive jurisdiction to settle any dispute arising out of or in connection with the contract. By clause 20.2.2: (a) any dispute or difference between the parties arising out of or in connection with the agreement was to be referred to arbitration; (b) any reference to arbitration was to be to a single arbitrator and was to be conducted in accordance with the Construction Industry Model Arbitration Rules (February 1998 Edition); (c) the arbitration agreement was subject to English law and the seat of the arbitration was to be Glasgow, Scotland; any such reference to arbitration was to be deemed to be a reference to arbitration within the meaning of the Arbitration Act 1996 or any statutory re-enactment.
The contractor argued that the juridical seat of the arbitration for the purposes of s. 2 of the Arbitration Act 1996 was in Scotland, with the result that the English court had no jurisdiction to entertain an application for leave to appeal.
Held, dismissing the claimant's application and granting the defendant leave to enforce the award:
1. The court did have jurisdiction to entertain an application by either party to the contract under s. 69 of the Arbitration Act 1996. In context the parties” express agreement that the seat of arbitration was to be Glasgow, Scotland had to relate to the place in which the parties agreed that the hearings should take place. By all the other terms the parties were agreeing that the curial law or law which governed the arbitral proceedings was that of England and Wales. Although authorities established that, prima facie and in the absence of agreement otherwise, the selection of a place or seat for an arbitration would determine what the curial law would be, where in substance the parties agreed that the laws of one country would govern and control a given arbitration, the place where the arbitration was to be heard would not dictate what the governing or controlling law would be. The fact that the Scottish courts would have no real control or interest in the arbitral proceedings suggested that the parties could not have intended that the arbitral proceedings were to be conducted as an effectively “delocalised” arbitration. The CIMAR Rules were not inconsistent with the view that the English court was to be the supervisory court.
2. The issue resolved by the arbitrator was a question of law, namely whether the liquidated damages provisions for culpable delay were enforceable. That question was not one of general importance because the liquidated damages clause was very much a “one-off”. Nor was the arbitrator obviously wrong in reaching his decision. Therefore leave to appeal was refused.
Akenhead J:
1. There are two applications before the Court relating to the First Award of an arbitrator, Mr John Uff CBE QC. This award relates to an EPC (Engineering, Procurement and Construction) Contract dated 4 November 2005 (“the EPC Contract”) between the Claimant (“the Employer”) and the Defendant (“the Contractor”) whereby the Contractor undertook to carry out works in connection with the provision of 36 wind turbine generators (the “WTGs”) at a site some 18 kilometres from Stirling in Scotland. This award deals with the enforceability of the clauses of the EPC Contract which provided for liquidated damages for delay.
2. The Claimant applies for leave to appeal against this award upon a question of law whilst the Defendant seeks in effect a declaration that this Court has no jurisdiction to entertain such an application and for leave to enforce the award.
3. I will deal first with the issue of jurisdiction.
4. The issue here arises out of the application of section 2 of the Arbitration Act 1996:
“(1) The provisions of this Part apply where the seat of the arbitration is in England and Wales or Northern Ireland”.
The seat of the arbitration is identified in section 3 as being the “juridical seat” of the arbitration “designated by the parties to the arbitration agreement”. If the juridical seat of the arbitration was in Scotland, the English Courts have no jurisdiction to entertain an application for leave to appeal. The Contractor argues that the seat of the arbitration was Scotland whilst the Employer argues that it was England.
5. There were to be two contractors involved with the project. Whilst Vestas-Celtic Wind Technology Limited was to design, supply, construct and install the 36 WTGs themselves, the Contractor was to design and carry out the bulk of the remaining works such as the foundations for the WTGs, other civil and building works, electrical works connecting the WTGs to the switch room and other connection works. There was an “Interface Agreement” between the Contractor, the Employer and the Wind Turbine Contractor.
6. The material clauses of the EPC Contract were:
“1.4.1. The Contract shall be governed by and construed in accordance with the laws of...
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