Collins (Contractors) Ltd v Baltic Quay Management (1994) Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE JACKSON |
| Judgment Date | 11 October 2004 |
| Neutral Citation | [2004] EWHC 2339 (TCC) |
| Date | 11 October 2004 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | No: HT-04–133 |
[2004] EWHC 2339 (TCC)
The Honourable Mr Justice Jackson
No: HT-04–133
IN THE HIGH COURT OF JUSTICE
Court No 7
St Dunstan's House
133–137 Fetter Lane
London EC4A 1HD
MR V RAMSEY QC and MR S HUGHES (instructed by Wragge & Co) appeared on behalf of the Claimant.
MR J MARRIN QC and MS S HANNAFORD (instructed by Treasury Solicitor) appeared on behalf of the Respondent.
Monday, 11th October 2004
(10.30 am)
1. : This judgment is in seven parts: namely, part 1, introduction; part 2, the facts; part 3, the proceedings to challenge the jurisdiction of the arbitrator; part 4, was there a dispute on 11th December 2002; part 5, was Pell Frischmann's document, dated 18th December 2002, a valid decision under clause 66; part 6, is the engineer's jurisdiction limited to claims in respect of defects A, B and C as identified in the engineer's decision; part 7, conclusion.
Part 1: Introduction
2. These proceedings concern a challenge to the jurisdiction of an arbitrator, pursuant to section 67 of the Arbitration Act 1996. AMEC Civil Engineering Ltd is the claimant in these proceedings and the respondent in the arbitration. I shall refer to this company as “AMEC”.
3. The Secretary of State for Transport is respondent in these proceedings but claimant in the arbitration. I shall refer to this party as “the Secretary of State”.
4. The Highways Agency at all material times acted as agent for the Secretary of State. I shall refer to the Highways Agency as “HA”.
5. Pell Frischmann Consultants Ltd is a firm of engineers which was named as “the engineer” in the contract with which this court is concerned. I shall refer to this firm as “Pell Frischmann”.
6. The issues between the parties arise out of renovation works which were carried out to Thelwall Viaduct in the mid-1990s. Thelwall Viaduct is the viaduct which carries the M6 motorway across the Manchester Ship Canal, the River Mersey and Warrington Road.
7. The scheme of this judgment is as follows: I shall first outline the relevant facts. I shall then describe the course which proceedings have taken thus far. I shall then address the three challenges which AMEC mount to the jurisdiction of the arbitrator.
8. In the factual section of this judgment, I shall refer to certain letters which are headed “Without Prejudice”. The phrase “without prejudice” has been used inappropriately by the writers of certain letters in this case. The use of this phrase has no practical effect. In no instance has the letter thereby become privileged. I shall therefore generally make no reference to the fact that a particular letter is headed “Without Prejudice”.
9. In the course of this judgment I shall make references to the oral evidence. That oral evidence was called before the arbitrator at a hearing on 13th February 2004. A transcript of that oral evidence has been placed before this court. It is agreed that I should treat this as evidence in the present proceedings.
10. The witnesses who gave oral evidence were Mr Rodney Chilton and Mr John Gallagher of Pell Frischmann and Mr David Grunwell of HA.
11. Finally, I should mention that on 19th December 2002 the Treasury Solicitor, on behalf of the Secretary of State, served a document headed “Notice of Dispute to Refer and to Concur in the Appointment of an Arbitrator.” For simplicity, I shall refer to this document as “the notice of arbitration”.
12. That concludes the introductory remarks. It is now necessary for me to outline the relevant facts.
Part 2: The Facts
13. By a contract not under seal, made on 31st March 1995, the Secretary of State engaged AMEC to carry out renovation works at Thelwall Viaduct. The contract incorporated the ICE conditions, 5th edition, subject to certain amendments. Clause 66 of the ICE conditions, as amended by the parties for the purpose of this contract, so far as material, provided as follows:
“1. If any dispute or difference of any kind whatsoever shall arise 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 certificate or valuation of the engineer (whether during the progress of the works or after their completion and whether before or after determination, abandonment or breach of the contract) it shall be referred to and settled by the engineer who shall state his decision in writing and give notice of the same to the employer and the contractor. Unless the contract shall have been already determined or abandoned, the contractor shall in every case continue to proceed with the works with all due diligence and he shall give effect forthwith to every such decision of the engineer unless and until the same shall be revised by an arbitrator as hereinafter provided. Such decisions shall be final and binding upon the contractor and the employer unless either of them shall require that the matter be referred to arbitration as hereinafter provided. If the engineer shall fail to give such decision for a period of three calendar months after being requested to do so or if either the employer or the contractor be dissatisfied with any such decision of the engineer, then and in any such case either the employer or the contractor may within three calendar months after receiving notice of such decision or within three calendar months after the expiration of the said period of three months (as the case may be) require that the matter shall be referred to the arbitration of a person to be agreed upon between the parties or (if the parties fail to appoint an arbitrator within one calendar month of either party serving on the other party a written notice to concur in the appointment of an arbitrate) a person to be appointed on the application of either party by the president for the time being of the Institution of Civil Engineers … Any such arbitration shall be deemed to be a submission to arbitration within the meaning of the Arbitration Act 1950 or the Arbitration (Scotland) Act 1984 as the case may be or any statutory re-enactment or amendment thereof for the time being in force. Any such reference to arbitration may be conducted in accordance with the Institution of Civil Engineers Arbitration Procedure (1983) or any amendment or modification thereof being in force at the time of the appointment of the arbitrator and in cases where the president of the Institution of Civil Engineers is requested to appoint the arbitrator, he may direct that the arbitration is conducted in accordance with the aforementioned procedure or any amendment or modification thereof. Such arbitrator shall have full power to open up review and revise any decision opinion instruction direction certificate or valuation of the engineer and neither party shall be limited in the proceedings before such arbitrator to the evidence or arguments put before the engineer for the purpose of obtaining his decision above referred to. The award of the arbitrator shall be final and binding on the parties …”
14. Pell Frischmann were named as engineer in the contract. The work which was specified in the contract included the replacement of the existing reinforced concrete deck slab of Thelwall Viaduct and the provision of new roller bearings which permit the slab or other elements of the viaduct to move.
15. Whilst clause 8 (b) of the ICE conditions as amended provides for various design responsibilities to be imposed on AMEC, there is a possible issue as to the extent, if at all, that all or some of those responsibilities were transferred to the engineer.
16. The works to Thelwall Viaduct were substantially completed on 23rd December 1996 and were so certified by the engineer. In June 2002 defects came to light. The roller bearings on pier V had deteriorated and one of those bearings, namely bearing number 5, had failed. In July, HA informed Pell Frischmann of this development, and over the following months Pell Frischmann gave considerable help to HA and its various consultants in dealing with the problem.
17. On 19th July Pell Frischmann informed HA that the bearing design had been carried out by AMEC and suggested that AMEC be contacted.
18. On 29th July Mr Grunwell of HA wrote to AMEC informing them about problems with the roller bearings. In the third paragraph, Mr Grunwell wrote:
“The investigation work is being managed by our managing agents Atkins with input from the original designers Pell Frischmann. Given that the failure may have a connection with the work executed by yourselves under the renovation contract, you may wish to contact our agents and make arrangements to inspect the damaged bearings.”
19. Upon receiving this letter, AMEC appreciated that a claim might be made against them by the Secretary of State. AMEC made a written note that they should contact their insurers and also their suppliers, a firm known as “FIP”.
20. On 20th September a meeting was held in Manchester to discuss the Thelwall Viaduct bearings. Representatives attended from HA, Atkins (who were HA's current advisers), FIP, Pell Frischmann and AMEC.
21. The history of events to date was outlined. Proposed future investigations were discussed. The question of responsibility was discussed. Pell Frischmann expressed the view that they were not to blame. AMEC also expressed the view that they were not responsible. See the minutes of that meeting, Pell Frischmann's letter of 15th October supplementing those minutes, and the evidence-in-chief of Mr Chilton at pages 38–39 of the...
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