Ravestein B.v v. Trant Engineering Ltd
| Jurisdiction | England & Wales |
| Judge | Kelly |
| Judgment Date | 09 January 2023 |
| Neutral Citation | [2023] EWHC 11 (TCC) |
| Docket Number | Case No: HT-2022-LDS-000004 |
| Court | King's Bench Division (Technology and Construction Court) |
[2023] EWHC 11 (TCC)
Her Honour Judge Kelly sitting as a Judge of the High Court
Case No: HT-2022-LDS-000004
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN LEEDS
TECHNOLOGY AND CONSTRUCTION COURT (KBD)
The Court House
Oxford Row
Leeds LS1 3BG
Mr Mischa Balen (instructed by Tyr Solicitors) for the Claimant
Mr Dalton Hale (instructed by KT Construction Law Limited) for the Defendant
Hearing date: 21 July 2022
Date draft circulated to the Parties: 22 December 2022
Date handed down: 9 January 2023
APPROVED JUDGMENT
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:00am on Monday 9 January 2023.
Her Honour Judge Kelly
This judgment follows the hearing of the Claimant's application for permission to appeal and for other orders concerning the arbitration award dated 22 March 2022 and corrected on 4 April 2022 of Mr Robert J Evans pursuant to section 69 of the Arbitration Act 1996 (“the 1996 Act”).
The claim was issued on 19 April 2022 and was supported by the Claimant's skeleton argument and other documents. The Defendant filed an acknowledgement of service contesting the claim on 4 May 2022 and filed a Respondent's notice, skeleton argument and authorities on 11 May 2022. The Claimant filed a skeleton argument in reply on 18 May 2022. By order dated 17 June 2022, the case was listed for an oral hearing. The hearing took place via Microsoft Teams on 21 July 2022.
I had the benefit of hearing oral submissions and reading the skeleton arguments of Mr Mischa Balen for the Claimant and Mr Dalton Hale for the Defendant, both of counsel.
Background
The background to the matter is set out in the corrected arbitration award dated 4 April 2022. The Claimant is a shipyard and construction company, incorporated under the laws of the Netherlands, which specialises in heavy steel construction work. The Defendant is an engineering procurement and construction company. The arbitration arose out of a subcontract between the parties dated 14 September 2010 which was made on an amended version of the NEC3 Engineering and Construction Subcontract June 2005 (with amendments June 2006), Option A: Priced Subcontract with Activity Schedule, Dispute Resolution Option W2 and a number of secondary options.
The Defendant referred a dispute to adjudication on 24 February 2021 where it alleged that the Claimant's works were defective and sought damages as a result. The Claimant did not, for the most part, take an active role in the adjudication. The adjudicator was appointed by the Institution of Civil Engineers and he issued his decision on 11 April 2021, with a correction on 16 April 2021. The adjudicator ordered the Claimant pay the Defendant damages of £454,083.09 plus VAT and costs. Thereafter, judgment in default was obtained by the Defendant. The Defendant has not been paid.
The Claimant served a notice to refer a dispute to arbitration on 27 October 2021. The notice informed the Defendant of an intention to refer to arbitration the dispute concerning the Claimant's liability for defects as found by the adjudicator. The parties agreed that the arbitrator should first determine whether the Claimant had complied with clause W2.4(2) by giving a valid Notice of Dissatisfaction. It was not in dispute that if the Claimant had not given a valid Notice of Dissatisfaction, the adjudicator's decision had become final and binding and could not be the subject of further dispute resolution process.
The award of the arbitrator on jurisdiction was dated 22 March 2022 and corrected on 4 April 2022. The arbitrator found that the Claimant had not served a valid Notice of Dissatisfaction and as a result the adjudicator's decision was final and binding. The arbitrator did not have jurisdiction. The Claimant seeks leave to appeal the arbitrator's decision pursuant to section 69 of the 1996 Act.
The grounds for the application for permission to appeal as set out in the Claim Form are:
(1) determination of the question will substantially affect the rights of the parties because the effect of the arbitration decision was that the tribunal did not have jurisdiction to determine the dispute and so the adjudication decision became final and binding;
(2) the question was the only one which the tribunal was asked to determine;
(3) the decision of the tribunal was obviously wrong because:
a. the tribunal incorrectly held that to comply with the relevant clauses, the Notice of Dissatisfaction had to both notify the matter in dispute and state the intention to refer it to the tribunal; and
b. the tribunal incorrectly held that the Notice of Dissatisfaction served by the Claimant challenged only the jurisdiction of the adjudicator rather than contesting his underlying decision;
(4) alternatively, the question was one of public importance given the widespread use of the standard NEC3 Engineering and Construction Subcontract and the decision of the tribunal was open to serious doubt for the reasons set out in (1) to (3) above;
(5) it was just and proper in all the circumstances for the court to determine the question.
In its Respondent's notice, the Defendant sought to uphold the award of the arbitrator on the grounds that:
(1) the decision of the arbitrator was not “obviously” wrong:
a. The arbitrator had correctly interpreted the relevant notice provisions. A Notice of Dissatisfaction requires the dissatisfied party both to identify the matter disputed and to indicate an intention to refer the matter to arbitration, although the notice does not need to condescend into any particular detail.
b. The adjudicator had correctly interpreted the relevant email alleged to be the Notice of Dissatisfaction as disputing the jurisdiction of the adjudicator only, rather than identifying a dispute concerning the underlying merits of the adjudicator's decision.
c. The decision of the arbitrator that the relevant email alleged to be the Notice of Dissatisfaction did not identify the two separate elements required for the notice to be valid – that is it did not identify that it took issue with the underlying merits nor did it state any intention to refer the dispute to arbitration.
(2) Although the correct interpretation of notice provisions in the standard form is capable of being a matter of public importance, it was denied that it was in this case and the decision of the arbitrator was open to serious or any doubt.
(3) In any event, it was not just and proper in all the circumstances for the court to determine the question because the Claimant's continued to refusal to pay goes against the “pay now, argue later” objectives of the 1996 Act.
I do not propose to rehearse all of the arguments raised, nor all of the documentation referred to during the course of the hearing. However, I record that I read and considered the documentation as a whole, as well as all of the arguments raised by the parties before coming to my decision.
The Law
Section 69(3) of the 1996 Act provides that leave to appeal shall be given only if the court is satisfied:
(a) that the determination of the question will substantially affect the rights of one or more of the parties,
(b) that the question is one which the tribunal was asked to determine,
(c) that, on the basis of the findings of fact in the award—
(i) the decision of the tribunal on the question is obviously wrong, or
(ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and
(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question.
Section 82(1) of the 1996 Act defines a “question of law” as “for a court in England and Wales, a question of the law of England and Wales”.
The burden is on the Claimant to persuade the court that permission to appeal should be given.
I was referred by the parties to the following cases:
(1) Transport for Greater Manchester v Keir Construction Ltd [2021] EWHC 804 (TCC)
(2) Bunge SA v Nibulon Trading BV [2013] EWHC 3936 (Comm)
(3) MBE Electrical Contractors v Honeywell Control Systems [2010] B.L.R. 561
(4) Covington Marine Corp & Ors v Xiamen Shipbuilding Industry Co [2006] 1 CLC 624
(5) The Council of the City of Plymouth v D R Jones (Yeovil) Ltd [2005] EWHC 2356 (TCC)
(6) Finelvet A.g. v Vinava Shipping Co. Ltd [1983] 1 WLR 1469
(7) BTP Tioxide Ltd v Pioneer Shipping Ltd [1982] AC 724
(8) Fehn Schiffahrts GmbH v Romani Spa [2018] 2 Lloyd's Rep. 385
(9) The Pera [1985] 2 Lloyd's Rep. 103
(10) The Antaios [1985] A.C. 191
(11) Forrest v Glasser [2006] 2 Lloyd's Rep. 392
(12) The Abqaiq [2012] 1 Lloyd's Rep 18
(13) Rainy Sky SA v Koomin Bank [2011] UKSC 50.
From those cases, I summarise the legal position.
The interpretation of a contract is a question of law. In considering whether an arbitrator's decision is wrong in law, the arbitrator's process of reasoning is split into three stages:
(1) The arbitrator ascertains the facts. This process includes the making of findings on any facts which are in dispute.
(2) The arbitrator ascertains the law. This process comprises not only the identification of all material rules of statute and common law, but also the identification and interpretation of the relevant parts of the contract, and the identification of those facts when the decision is reached.
(3) In the light of the facts and the law so ascertained, the arbitrator reaches his decision.
Stage (2) is the proper subject matter of an appeal pursuant to section 69 of the 1996 Act. Pursuant to CPR PD62, paragraph 12.5, the only documents...
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