States of Guernsey v Jacobs UK Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Akenhead |
| Judgment Date | 15 April 2011 |
| Neutral Citation | [2011] EWHC 918 (TCC) |
| Docket Number | Case No: HT_10-436 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 15 April 2011 |
[2011] EWHC 918 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Akenhead
Case No: HT_10-436
Jonathan Acton Davis QC (instructed by Eversheds LLP) for the Claimant
Rachel Ansell (instructed by Beale & Co) for the Defendant
Hearing date: 1 April 2011
The States of Guernsey ("Guernsey") seek through Part 8 proceedings determination of issues relating to whether or not there were binding arbitration agreements entered into between them and Jacobs UK Ltd ("Jacobs") in relation to a project which involves the development of a new terminal at Guernsey Airport. The case raises some issues of more general interest in relation to the circumstances in which an arbitration agreement might (or might not) be entered into after the project is substantially completed.
It has been agreed that, where necessary, I will decide any relevant contentious issues of fact on the documents and written evidence filed by the parties. There is a substantial history to the project and to the dealings between the parties, by which they sought to establish a contractual relationship, including one which at various stages of negotiation did or did not include provision for arbitration. It is accepted by the parties that I do not need to decide whether or not there was any underlying agreement between the parties by which Jacobs actually performed their various engineering services on the project.
The context of this current dispute is that Guernsey wishes to pursue various claims against Jacobs and there is an issue as to whether the agreed forum is arbitration or the Courts.
The History and the Facts.
Initially, Guernsey wanted to retain its entire professional team contractually by way of one contract with a lead consultant, namely the Architect, Kensington Taylor ("the Architect"). Jacobs is and was a firm of consulting engineers, formerly known as Babtie, who were to be retained. In May 1998 Jacobs sent to the Architect an appendix which identified in broad terms the services which they were prepared to provide. Although this schedule has no specific reference to an arbitration agreement it relates to a schedule of services under the then current ACE conditions which did have an arbitration clause.
On 5 January 1999, the Architect effectively quoted to Guernsey for the costs of providing the multi-disciplinary services which included those of Architect, Quantity Surveyor and a full Engineering Consultancy including Structural, Civil, Traffic, Environmental and Mechanical and Electrical Engineering Services, together with Airport Consultancy. The quote was a total of £1,143,600, including some fees already paid. This was put forward inferentially by the Architect on the basis that possibly the RIBA standard terms would govern the relationship. This letter was copied to Jacobs.
On 21 January 1999, Guernsey sent to the Architect a memorandum dated 20 January 1999 from its Strategic Property Adviser referring to the earlier quotation letter which, apart from suggesting that the final form of agreement between Guernsey and the Architect was to be subject to Law Officer approval, did not suggest obviously that arbitration was essential. The Architect replied on 22 January 1999 (copied to Jacobs) that it would respond which it did on 9 February 1999 to the effect that all of the issues raised in the memorandum would eventually be covered in the Conditions appointment.
It is a common feature of the correspondence that there are (or appear from the files) to be long gaps in the responses of the various parties. On 22 July 1999 Guernsey indicated that the relevant government committee had formally agreed to the Architect's fee proposal in principle but limited the Architect's instructions at that stage to proceeding up to "planning submission stage". Guernsey asked if the Architect could forward it's "proposed finalised terms of engagement so that they can be forwarded as one document to the Law Officers."
On 12 August 1999, there was a meeting between various Guernsey representatives, the Architect and the Quantity Surveyors ("the QS"), Jacobs not being there. However at the Project Start up Meeting on 17 August 1999, Jacobs did attend with the others, Guernsey and British Aerospace who were providing airport consultancy services to Guernsey. The formal start date for the project was confirmed as having been 12 August 1999. The "Contracting Strategy" was "confirmed as traditional, i.e. Design Team, separate [Project Manager] and then Tendered Main Contractor." The reference to the Design Team was in effect to the engagement by Guernsey of the Architect as the Lead Consultant responsible for the provision of all relevant design related services, with the idea being that the Architect would sub-contract the non-Architect design services to others including Jacobs. The minutes revealed that there was a discussion about insurances and in that context the Architect confirmed that it had "utilised an RIBA agreement with back to back terms for ACE and RICS Terms of Engagement for their sub consultants Babtie and DLE respectively." There is no suggestion or inference that this involved any express or conscious discussion about there being arbitration agreements as between the Architect and Jacobs.
There was some correspondence between the Architect and Guernsey about proposed conditions of engagement which led to a letter dated 22 October 1999 in which the Architect sent to Guernsey some draft conditions of engagement. It is wholly unclear what was sent but it may well be that there were some references to arbitration within those conditions because Guernsey's Strategic Property Adviser wrote a memorandum which made its way onto Jacobs' files which amongst other things said that "references to arbitration are not consistent". That memorandum suggests that there were documents from the Architect, QS and Jacobs but it is not clear what they were.
Matters appear to have drifted somewhat and on 8 June 2000 the Architect wrote to Guernsey with what was called a "finalised draft of the Conditions of Engagement". This document broadly outlined which disciplines the Architect was responsible for and attached the conditions of engagement of the Architect, the QS and Jacobs, albeit that at this stage what was still apparently being envisaged was one contract between Guernsey and the Architect and separate sub-contracts between the Architect and the other consultants. The Conditions of Engagement relating to Jacobs were the ACE Conditions of Engagement 1995 2 nd Edition 1998 which envisaged that for the engineering works the agreement would be governed by the laws of England whose courts would have "non-exclusive jurisdiction". There was no arbitration agreement in these standard terms.
Guernsey's Strategic Property Adviser issued internal advice (not copied to Jacobs) which suggested that Guernsey Law was to apply and "in particular reference must be made to Guernsey Arbitration Law." Guernsey wrote to the Architect on 25 September 2000 considering the proposed draft contracts with the various professionals and stated:
"At present, all contracts are expressed to be subject to English law. In general, it would be expected that the contracts would be subject to Guernsey Law and the jurisdiction of the Royal Court and I would advise that this would be appropriate for a project such as this. By specifying Guernsey Courts having jurisdiction purposes, this would avoid needless travel and delay in the event of any dispute and the use of Guernsey Law ought to avoid the misapplication of the UK and other Regulations by the contractors or related interpretation problems in the event of a dispute."
There is nothing in this letter, which was copied to Jacobs by the Architect, about arbitration. Indeed the only way that this letter can be interpreted is that Guernsey was asking for a Guernsey Law and Guernsey Court jurisdiction.
The Architect responded on 3 October 2000 explaining that the Architect was the lead consultant who would in turn employ all the other consultants. It envisaged that there would be identical back to back agreements between it and those consultants.
On 24 January 2001, there was a meeting between Guernsey, the Architect, Jacobs and DLE (and possibly others) at which there was some discussion about contracts and the hand written note suggests that the main contract between the Architect and Guernsey and the individual contracts between the Architect and the other consultants would be "back to back". The note, which was never translated into minutes, rather cryptically says "Guernsey Arbitration" but does not record what if anything was discussed about it.
At some stage in early 2001, Guernsey had a change of mind about how the professional services were to be procured. It decided that it would have separate appointments with each of the consultants. As from 28 February 2001, Jacobs started to submit invoices direct to Guernsey for its fees for professional engineering services in respect of the airport terminal project. Although it does not appear that terms had been agreed the invoices contained the words "in accordance with the Terms of Engagement interest is due on accounts which are not paid within 14 days."
On 25 June 2001, Guernsey sent to BAE a letter which did not find its way onto Jacobs' file which stated:
"I attach, for your information, copies of documents with regard to the Guernsey Airports Contracts for the following parties:
Babtie (letter dated 07 June 2001)
Kensington Taylor (letter dated 06 June 2001)
Davis Langdon & Everest (letter dated 06 June 2001)
I should be most grateful to receive...
To continue reading
Request your trial
-
King Ryan v Rafikool Mohammed
...cases see for example Maple Leaf Macro Volatility Master Fund v Rouvroy [2009] EWCA Civ. 1334 and States of Guernsey v Jacob UK Ltd. [2011] EWHC 918. 36. In Chitty on Contract, supra, it is also noted at para. 2-030: “But conduct will amount to acceptance only if it is clear that the offer......
-
Table of cases
...84 III.25.262 State rail authority (NSW) v Baulderstone hornibrook pty (1988) 5 BCL 117 II.7.49 States of Guernsey v Jacobs UK Ltd [2011] EWhC 918 (TCC) I.2.42, III.25.40 State Water Corporation v Civil Team Engineering pty Ltd [2013] NSWSC 1879 III.24.166, III.24.168, III.24.187, III.24.20......
-
Arbitration
...it may be diicult to prove that such an agreement was reached: see, by way of illustration, States of Guernsey v Jacobs UK Ltd [2011] EWHC 918 (TCC); Duta Wajar Sdn Bhd v Pasukhas Construction Sdn Bhd [2012] MYCA 9. 124 See Arbitration Act 1996 (UK) section 5 (which provides when an arbitra......
-
Contract formation
...even if the terms of the counterofer difer from those of the ofer in only minor respects: see States of Guernsey v Jacobs UK Ltd [2011] EWHC 918 (tCC) at [43], per akenhead J. 132 Cf Buchan v Melville (1902) 9 SLt 459 at 459, per the Lord President (Balfour): “it was certainly unsatisfactor......