Fraserburgh Harbour Commissioners v McLaughlin and Harvey Ltd
| Jurisdiction | Scotland |
| Judge | Lady Wolffe |
| Judgment Date | 06 October 2021 |
| Court | Court of Session (Inner House) |
| Docket Number | No 6 |
First Division
Lady Wolffe
Anglian Water Services v Laing O'Rourke Utilities Ltd [2010] EWHC 1529; [2011] All ER (Comm) 1143; [2010] CILL 2873; 131 Con LR 94
Brodie v Ker 1952 SC 216; 1952 SLT 226
Caledonian Insurance Co v Gilmour (1892) 20 R (HL) 13; [1893] AC 85
Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334; [1993] 2 WLR 262; [1993] 1 All ER 664; [1993] 1 Lloyd's Rep 291; 61 BLR 1; 32 Con LR 1; [1993] IL Pr 607; [1993] NPC 8
DGT Steel and Cladding Ltd v Cubitt Building and Interiors Ltd [2007] EWHC 1584; [2008] Bus LR 132; [2007] BLR 371; [2007] TCLR 8; 116 Con LR 118; [2007] CILL 2492
Dawnus Construction Holdings Ltd v Amey LG Ltd [2017] EWHC B13
Gilbert Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689; [1973] 3 WLR 421; [1973] 3 All ER 195; 1 BLR 73
Hamlyn & Co v Talisker Distillery (1894) 21 R (HL) 21; 2 SLT 12; [1894] AC 202
North British Rly v Newburgh and North Fife Rly (No 1) 1911 SC 710; 1911 1 SLT 266
Institution of Civil Engineers, NEC3: Engineering and Construction Contract (ECC) (Institution of Civil Engineers, London, April 2013), cl W2
Thomas, D, et al, Keating on NEC3 (Sweet and Maxwell, London, December 2012), para 11.098
Arbitration — Submission and reference — Contract to refer — Effect of provision requiring alternative dispute resolution — Whether court retaining jurisdiction to entertain action — Whether action to be sisted pending outcome of ADR process — Arbitration (Scotland) Act 2010 (asp 1), sec 10
Fraserburgh Harbour Commissioners raised an action for reparation in the Court of Session against McLaughlin and Harvey Ltd. On 20 October 2020, the action was remitted to the commercial roll. The cause called before the commercial judge (Lady Wolffe) for a debate on the defender's preliminary plea of contractual bar, on 25 November 2020. At advising, on 26 January 2021, the commercial judge put the matter out by order ([2021] CSOH 8; 2021 SLT 1009). On 3 February 2021, the commercial judge dismissed the action. The pursuers reclaimed.
Section 10(1) of the Arbitration (Scotland) Act 2010 (asp 1) (‘the 2010 Act’), provides, “The court must, on an application by a party to legal proceedings concerning any matter under dispute, sist those proceedings in so far as they concern that matter if– (a) an arbitration agreement provides that a dispute on the matter is to be resolved by arbitration (immediately or after the exhaustion of other dispute resolution procedures), (b) the applicant is a party to the arbitration agreement (or is claiming through or under such a party), (c) notice of the application has been given to the other parties to the legal proceedings, (d) the applicant has not– (i) taken any step in the legal proceedings to answer any substantive claim against the applicant, or (ii) otherwise acted since bringing the legal proceedings in a manner indicating a desire to have the dispute resolved by the legal proceedings rather than by arbitration, and (e) nothing has caused the court to be satisfied that the arbitration agreement concerned is void, inoperative or incapable of being performed.”
In 2012, the pursuers engaged the defenders to carry out construction works at Fraserburgh harbour. The defenders were employed under the NEC3: Engineering and Construction Contract. Clause W2.1 of the contract provided that a dispute arising out of the contract was to be determined by an adjudicator. Clause W2.4 provided that, if a party was dissatisfied with a decision of the adjudicator, that decision could be referred to arbitration.
The pursuers identified defects in the works. They brought an action against the defenders for damages without first referring the dispute to adjudication. No motion to sist the cause pending adjudication or arbitration was made. The defenders insisted upon their preliminary plea that cl W2 created a contractual bar preventing the pursuers from bringing an action prior to referring the matter to adjudication.
The commercial judge dismissed the action, holding that cl W2 required an adjudication followed by arbitration. The pursuers accepted that the court could not determine the merits of the dispute. The commercial judge held that the action served no purpose. An adjudication hearing followed. Both parties served notices of dissatisfaction with the adjudicator's decision. The next stage in the dispute was a reference to arbitration. The pursuers reclaimed.
The pursuers contended that the settled approach where a dispute was to be referred to alternative dispute resolution (‘ADR’), reflected also in sec 10 of the 2010 Act, was for any action to be sisted pending resolution of the dispute by that process. The right to resort to a court could be excluded in its entirety only by clear wording.
The defenders contended that the pursuers were contractually required to adjudicate before bringing the matter before another tribunal. They were barred from bringing a court action prior to the conclusion of that process.
Held that: (1) a contract would not be interpreted as excluding the court's jurisdiction unless by clear words or necessary implication, and that the proper course was for the court to sist proceedings pending a...
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Leander Cb Consultants Limited T/a Leandor Advisors Against Bogside Investments Limited And Another
...the jurisdiction of the court such that the action would fall to be dismissed: Fraserburgh Harbour Commissioners v McLaughlin & Harvey Ltd 2022 SC 84. Finally, as pointed out by the Dean, it is difficult to see how the pursuer could circumvent the terms of section 10(1)(d)(i) of the 2010 Ac......