Al-Naimi (t/a Buildmaster Construction Services) v Islamic Press Agency Inc.
| Jurisdiction | England & Wales |
| Judge | Waller,Chadwick L JJ |
| Judgment Date | 28 January 2000 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 January 2000 |
Court of Appeal (Civil Division).
Waller and Chadwick L JJ.
Michael Black QC and Rupert Higgins (instructed by Bowling & Co) for the appellant.
John Randall QC and Piers Stansfield (instructed by Masons) for the respondents.
The following cases were referred to in the judgments:
Birse Construction Ltd v St David LtdUNK [1999] BLR 194; [2000] BLR 57 (CA).
Jones (Edwin) v Thyssen (Great Britain) LtdUNK (1991) 57 BLR 116.
Arbitration — Building contract containing arbitration agreement — Whether disputed works arose under contract containing arbitration agreement or under separate oral agreement — Whether judge right to stay proceedings for arbitrator to decide whether subject matter of action covered by arbitration agreement — Arbitration Act 1996, s. 9.
This was an appeal by the claimant from a decision of HHJ Bowsher QC ([1999] CLC 212) staying proceedings pursuant to s. 9 of the Arbitration Act 1996 to enable an arbitrator to decide whether the subject matter of the action was covered by the arbitration agreement relied on by the defendant.
The claimant entered into a contract with the defendant to carry out building works in the form of the JCT agreement for minor building works, 1980 edition, containing an arbitration clause. The claimant carried out certain additional works which he claimed was pursuant to a separate oral contract so that when a dispute arose it was not subject to the arbitration agreement. The claimant took proceedings in respect of the additional works and the defendant applied for a stay of proceedings under s. 9 of the Arbitration Act 1996. Both sides invited the judge to decide on affidavit evidence alone the question whether the additional work was governed by the first contract and therefore the arbitration clause. The judge stayed the proceedings on the basis that there was an arbitration agreement and a relevant dispute and that an arbitrator should decide whether the dispute was covered by the arbitration agreement. The claimant appealed.
Held dismissing the appeal:
Under s. 9 a court should be satisfied that there was an arbitration clause and that the subject matter of the action was within that clause before it could grant a stay. The court had an inherent power to stay proceedings and could therefore grant a stay in a situation where the court could not be certain of those matters but good sense and litigation management made it desirable for an arbitrator to consider the whole matter first. In the absence of agreement that issues should be tried on witness statements alone, a court which formed the view that there were triable issues material to the jurisdiction question would have to direct a trial of those issues. In this case it was possible to resolve the jurisdiction question on the affidavits and the judge was wrong not to do so. On the evidence it was clear that the terms of the JCT contract covered the additional work and thus that the arbitration clause covered the subject matter of the proceedings which were to be stayed under s. 9.
Waller LJ: This is an appeal from the decision of Judge Bowsher QC in the Technology and Construction Court of 2 October 1998 whereby he stayed the claimant's action under s. 9 of the Arbitration Act 1996. In so doing he refused to decide whether the matters the subject matter of the action were covered by the arbitration agreement relied on by the defendants. The appeal raises a point as to the proper approach of the court to an application under s. 9 of the 1996 Act particularly in the light of the change in the law brought about by the same Act as to an arbitrator's powers to decide his own jurisdiction.
The claimant carries on business as a building contractor. The defendant occupies a large property at East Burnham in Buckinghamshire which in 1996 it wished to convert into offices and accommodation. The defendant retained as its advisor Mr Kassim of ASK Planning who has sworn the affidavits in this matter on behalf of the defendant.
On 12 July 1996 the claimant entered into a building contract with the defendant in the form of the JCT agreement for minor building works, 1980 edition, to carry out certain works under the supervision of ASK Planning as contract administrator.
The works were described as the alteration and refurbishment of the so-called block B of Crown House, and were shown and described in drawings, a specification and a supplementary priced schedule. The supplementary priced schedule stated that it should be read with certain documents including the drawings, and listed the items of work. It provided that:
“The list forms part of the contract and represents the formally priced work by the Contractor up to and including all first fixes and some second fix.”
The price for the works identified was £141,750.
By art. 4 it was agreed so far as material as follows:
“If any dispute or difference as to the construction of this Agreement or any matter or thing of whatsoever nature arising thereunder or in connection therewith…shall arise between the Employer or the Architect/the Contract Administrator on his behalf and the Contractor either during the progress or after the completion or abandonment of the Works or after the determination of the employment of the Contractor it shall be and is hereby referred to arbitration in accordance with clause 9.”
It is common ground that the claimant carried out further works other than those identified in the schedule and as part of what is described as “the second fix”. It is the claimant's case that those works were carried out under a separate contract made orally, which did not contain any of the terms of the JCT form including the arbitration clause. It is on that basis that he has brought this action as opposed to commencing arbitration.
It is right to say that when matters began to go sour as between the parties, those conducting the correspondence on the part of the claimant pursued the matter as if there were simply one contract relying on JCT terms as applying to the works asserted now to have been concluded under the separate oral contract. It seems likely that it would have been a matter of indifference to the claimant as to whether the matter went to arbitration, or was the subject of proceedings in court, but for the fact that he could not get legal aid to conduct the arbitration. It is convenient at the outset to put the question of legal aid on one side. Section 31 of the Legal Aid Act 1988 provides:
“(1) Except as expressly provided by this Act or regulations under it–
(a)…
(b) the rights conferred by this Act on a person receiving advice, assistance or representation under it shall not affect the rights or liabilities of other parties to the proceedings or the principles on which the discretion of any court or tribunal is normally exercised.”
Thus, as was common ground before us, it is the duty of the court to resolve any issue as between the parties without regard to the fact that one of them is legally aided; in the arbitration context, albeit in the context of the...
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