Wealands v CLC Contractors Ltd [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Tuckey J |
| Judgment Date | 25 February 1998 |
| Date | 25 February 1998 |
| Court | Queen's Bench Division (Commercial Court) |
Queen's Bench Division (Commercial Court).
Tuckey J.
Toby Landau (instructed by Burges Salmon) for the appellant.
Geoffrey Brown (instructed by Hextall Erskine & Co) for the defendant.
The following cases were referred to in the judgment:
Chandris v Isbrandtsen-Moller Co IncELR[1951] 1 KB 240.
Edwards v Great Western Rly CoENR(1851) 11 CB 588; 138 ER 603.
Hayter v NelsonUNK[1990] 2 Ll Rep 265.
Socit Commerciale de Rassurance v ERAS International Ltd (The Eras EIL actions)UNK[1992] 1 Ll Rep 570.
Arbitration Stay of proceedings Whether contractor's third party proceedings against subcontractor to be stayed Whether contractor's claim within arbitration clause Whether arbitrator had power to award contribution Arbitration Act 1996, s. 9, 48.
This was an application by a subcontractor for third party proceedings against it by the contractor to be stayed under s. 9 of the Arbitration Act 1996.
The defendant contractor was engaged to paint Hammersmith Bridge by the local authority. It engaged the third party as a scaffolding subcontractor on terms which referred to arbitration any dispute arising in connection with the contract or the carrying out of the subcontract works. One of the defendant's employees fell from the scaffold and was killed. His widow claimed damages alleging negligence and breach of statutory duty on the basis that the scaffolding was in some way unsafe or defective and caused him to fall. The defendant said that there was nothing wrong with the scaffolding but that if there was then the third party was liable. The plaintiff had not joined the third party as a defendant.
The defendant's claim against the third party was for indemnity or contribution on the grounds that if the allegation made by the plaintiff was true the third party was in breach of its contractual obligations to the defendant under the subcontract and/or their tortious duty to the plaintiff to exercise reasonable care and skill and/or a warranty that the scaffold complied with the relevant statutory regulations. The claim was also put on the basis that there was a duty of care owed by the third party to the defendant.
The third party applied to stay the proceedings under s. 9(4) of the Arbitration Act 1996. The defendant argued that the claim was not within the wording of the arbitration clause and that the claim for contribution could not be referred to arbitration since it was a remedy confined by statute to the courts.
Held, staying the third party proceedings:
1. The defendant's primary claims against the third party were for breach of contract in failing to perform the works in accordance with the subcontract and for indemnity under the various indemnity clauses in the subcontract. As a matter of construction those claims plainly arose in connection with or out of the subcontract or the carrying out of the subcontract works.
2. If an arbitrator at the end of the day decided that he did not have jurisdiction to award contribution then that would be the result of what the parties had agreed, but that was not necessarily what the arbitrator would decide. If it was right that the arbitral tribunal did impliedly have the right to grant the same remedies as a court of law then there was no difficulty. Section 48 of the 1996 Act allowed parties to agree on what powers the arbitral tribunal should have as regards remedies and the parties had not agreed that the arbitral tribunal should have a remedy equivalent to the right to order contribution. That might or might not be an argument against the view that the arbitrator should have such power. It was not a reason to construe the clause in such a way as to confine the arbitrable part of the third party claim to those claims made under the contract itself and not to those made under the 1978 Act.
3. Despite the disadvantages of the claim against the third party going to arbitration (if the plaintiff did not join the third party as a defendant) the 1996 Act gave priority to party autonomy and entitled the third party as of right to the stay which it asked for.
Tuckey J: Where a subcontract between a main contractor and his subcontractor contains an arbitration agreement is the main contractor's third party claim against the subcontractor in personal injury litigation caught by the arbitration agreement and therefore bound to be stayed under s. 9 of the Arbitration Act 1996?
This point arises in these proceedings. The defendant main contractors were engaged to paint Hammersmith Bridge by the local authority. They engaged the third party as a scaffolding subcontractor to provide...
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