Al-Naimi v Islamic Press Agency Inc.
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WALLER |
| Judgment Date | 28 January 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0128-2 |
| Docket Number | Case No: QBENI 1998/1646/A2 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 January 2000 |
[2000] EWCA Civ J0128-2
Lord Justice Waller
Lord Justice Chadwick
Case No: QBENI 1998/1646/A2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
TECHNOLOGY AND CONSTRUCTION COURT
His Honour Judge Bowsher QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Michael Black Esq QC, Mr Rupert Higgins (instructed by Messrs Bowling & Co for the Claimant/Appellant)
John Randall Esq QC, Mr Piers Stansfield (instructed by Messrs Masons for the Defendant/Respondent)
Friday, 28 January 2000
This is an appeal from the decision of His Honour Judge Bowsher QC in the Technology and Construction Court of 2 October 1998 whereby he stayed the claimant's action under section 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 section 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 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 Article 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; (see in the Arbitration context albeit in the context of the 1950 Act this principle was confirmed in Edwin Jones v Thyssen (Great Britain) Ltd (1991) 57 BLR 116).
Approach to application for stay under section 9
The judge in this case was dealing with the matter under the Rules of the Supreme Court. It is by those rules which this court must judge whether the judge erred in the exercise of his discretion. If this court was to be of the view that he did err, then this court should act under the new CPR although I am doubtful whether in the context of an application under section 9 the approach will be very different.
Under the old rules, and in the context of a dispute as to whether there was a contract, and in particular a contract that contained an arbitration clause, His Honour Judge Humphrey Lloyd QC considered how the court should approach a section 9 application in Birse Construction Ltd v St David Ltd [1999] BLR 194. His decision was reversed on appeal (see Transcript Friday 5 November 1999), but I do not understand his suggestions as to approach, save conceivably on one aspect, to have been criticised. The reversal resulted (a) from the fact that the parties had failed to make clear to him, that they were not agreed that he should decide the question whether there was an arbitration agreement on the affidavit evidence alone, and (b) because the majority thought that without that agreement, it would be an illegitimate exercise of discretion in that case, to decide to determine, and then to determine the question whether there was a contract upon affidavit evidence, which showed a genuine dispute of relevant fact; (see Pill LJ at page 4 and Aldous LJ at page 7). His approach must of course be read with that last point in mind.
I find that what he had to say about the approach to a section 9 application very helpful, and both Counsel before us suggested that it provided useful guidance. It is particularly helpful to note his attitude to the situation in which what is in dispute is not whether a clause exists at all but as to precisely what is covered by that clause. I will set out the relevant passage in full:-
"It is common ground that the following courses are open to me:
1. To determine, on the affidavit evidence that has been filed, that an arbitration agreement was made between the parties, in which case the proceedings will be stayed in accordance with section 9 of the 1996 Act since article 5 and clause 41 of the JCT Conditions contain an arbitration agreement;
2. To stay the proceedings but on the basis that the arbitrator will decide the question of whether or not there is an arbitration agreement since section 30 of the Arbitration Act 1996 provides �
(1) Unless otherwise agreed by the parties, the arbitral tribunal may rule on its own substantive jurisdiction, that is, as to �
(a) whether there is a valid arbitration agreement,
�
(c) what matters have been submitted to arbitration in accordance with the arbitration agreement.
(2) Any such ruling may be challenged by any available arbitral process of appeal or review or in accordance with the provisions of this Part.
Sub section (2) is a reference to provisions such as section 67 which states �
(1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court �
(a) challenging any award or the arbitral tribunal as to its substantive jurisdiction; �
3. Not to decide the question immediately but to order an issue to be tried. RSC Order 73, rule 6(2) provides �
Where a question arises as to whether an arbitration agreement has been concluded or as to whether the dispute which is the subject matter of the proceedings falls within the terms of such agreement, the court may determine that question or give directions for its determination, in which case it may order the proceedings to be stayed pending the determination of that question.
4. To decide that there is no arbitration agreement and to dismiss the application to stay.
Mr Darling for the plaintiff contended that there should be no stay of the proceedings unless the court was satisfied that there was clearly an arbitration agreement. I do not consider that the position is that clear cut. The circumstances of the application must be taken into account. I accept that if it is clear on the evidence that a contract did or did not exist then the court should so decide for it cannot be right either to direct an issue pursuant to Order 73, rule 6(2) or to leave the "dispute" to be determined by an arbitral tribunal. The dominant factors must be the interests of the parties and the avoidance of unnecessary delay or expense. Where the rights and obligations of the parties are clear the court should enforce them. Unless the parties otherwise agree section 30 of the Arbitration Act 1996 now permits an arbitral tribunal to decide questions of jurisdiction where it might not previously have been competent to do so. It is not...
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