ACE Engineering Ltd v Montreal Management Consultants Est Development General Service
| Jurisdiction | Dominica |
| Judge | ‘Stephenson J.’ |
| Judgment Date | 18 May 2020 |
| Neutral Citation | DM 2020 HC 11 |
| Date | 18 May 2020 |
| Docket Number | CASE NO. DOMHCV2019/0054 |
| Court | High Court (Dominica) |
IN THE EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
(CIVIL)
CASE NO. DOMHCV2019/0054
Heather Felix Evans of Optimum Legal for the Claimant
Lennox Lawrence with Jodi Luke of Platinum Law Chambers for the first Defendant
Fernillia Felix of National Bank of Dominica for the second Defendant
Before the court there are two opposing applications. There is an application by Montreal Management Consultants Est. Development General Service (the first named defendant) to continue an anti-arbitration injunction which they obtained on an exparte application and an application by ACE Engineering Ltd (ACE) to discharge the said injunction.
Arbitration is a private dispute resolution process which effectively involves the parties to arbitration agreement contracting out the rights to Arbitration which they would otherwise submit to the High Court for resolution. Arbitration is said to be consensual and is to be construed depending on the intention of the parties as expressed in their agreements. One has to look at the agreement as it is only from that agreement is it possible to tell how disputes are to be resolved between the parties. In Mitsui Construction Co Ltd v AG of Hong Kong 1 it was held that it was a “fundamental rule of construction of contractual documents that the intention of the parties must be ascertained from the language they had used, interpreted in the light of the relevant factual situation in which the contract was made”.
It is therefore proper for the court in construing the terms of a contract to give effect, so far as the language of the contract permits to the commercial purpose of the arbitration clause. Re: Fiona Trust and Holdings Corporation v Privalov 2.
In seeking to ascertain the intention of the parties to a contract the court should seek to ascertain the meaning which the document would convey to the reasonable person having all the background knowledge which ought to have been available to the parties in the situation in which they were at the time of the contract. Re: Investors Compensation Scheme Ltd v West Bromwich Building Society 3.
In The Fiona Trust Case 4 it was decided inter alia that:
“the construction of an arbitration clause should start from the assumption that the parties as rational businessmen, are likely to have intended any dispute arising out of their relationship to be decided by the same tribunal and accordingly the arbitration clause ought to be construed in accordance with this presumption unless the language of the contract
clearly states that certain questions were intended to be excluded from the arbitrator” 5.
In the case at bar ACE commenced arbitration proceedings against the first named defendant in the United States of America before the International Court of Arbitration International Centre for ADR numbered 24714/MK.
On 25 th September 2019, the first named defendant applied for and obtained an exparte order from this court restraining ACE from continuing the prosecution of its request for arbitration before the International Court of Arbitration for ADR dated 19 th August 2019 and numbered 24714/MK. On the 8 th November 2019 ACE applied for the said anti arbitration injunction to be discharged.
The following documents are before the court for its consideration in this ruling:
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a. An application by Ace to discharge or set aside the anti-arbitration injunction filed on 8 th November 2019;
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b. Affidavit of Anthony Le Blanc in support of the said application filed on even date with exhibits (“ALB23 – ALB28”);
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c. Submissions filed on behalf of ACE filed on 8 th November 2019;
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d. Submissions in support of Anti-Suit injunction filed on behalf of the first named defendant filed on 15 th November 2019;
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e. The Court Order dated 30 th January 2020 and entered on the 19 th February 2020;
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f. Answers to questions by the Court filed on behalf of the claimant on the 4 th February 2020;
This court received written submissions and heard oral submissions from both counsel on the issue as to whether the anti-arbitration injunction should be continued or discharged. The court has reviewed the quite lengthy submissions filed by both counsel in this matter. Reference will be made to those submissions which were considered necessary to explain the court's
conclusions. It is to be noted that failure to make specific mention of any point of submission does not mean that it has been ignored or there has been a failure to take it into account. Similarly, a good many issues of and points have been raised by both counsel which in the court's view is not necessary to discuss in order to resolve or to decide the main issue in the case at barThis is the court's ruling on this issue. For the sake of simplicity I shall refer to the injunction obtained as an “ anti-arbitration injunction”.
Learned Counsel Felix Evans on behalf of ACE in her submissions stated that in any event the question as to whether ACE could go directly to arbitration is a question of jurisdiction which should be canvassed before the Adjudicators and not the court. I do not agree with learned counsel in this regard.
The court has an inherent power to stay proceedings, to allow for arbitration to proceed or continue, even where the parties have contracted to resolve their disputes by arbitration. Re: Channel Tunnel Group Ltd and another v Balfour Construction Ltd and others. 6
In Hashwani v OMV Maurice Energy Ltd 7 the court addressed the issue of the principle relating to the curial powers of the High Court. Moore-Bick LJ suggested that it was the court's responsibility to decide a challenge to the jurisdiction of arbitrators. The learned Judge said where a party makes an application to the court to determine whether the tribunal in question has the jurisdiction to hear the matter is a question of law which can be dealt with by the court;
“…it is the court's responsibility to decide the question on the basis of the evidence the parties have chosen to put before it, unless there is some justification for not doing so. There is a good reason for that. Although
arbitrators have jurisdiction to decide their own jurisdiction, they do not have the final word on the subject, because it is open to the parties to challenge their award…”
During the arguments before the court I ruled that the issue before the court is as to what form the dispute resolution will take, that is an interpretation of the dispute resolution clause contained in the contract not the substantive issues arising as it regards the dispute.
There is no dispute that there was a contract (the contract) entered between ACE and the first named defendant dated the 3 rd January 2017 and executed on the 7 th March 2017 for certain works to be executed at Bellvue Chopin in the island of Dominica. 8
It is my view that both interpretations of the relevant sub paragraphs of Part 20 of the Contract are arguable and were in fact well argued before this court.
This case raises a short question of the construction of the dispute resolution clause in the Design and Build agreement entered into between the first named defendant and ACE.
It is the first named defendant's point that the dispute between the parties herein should have been referred to a Dispute Adjudication Board (DAB). ACE disputes this and contends that the matter could proceed direct to arbitration pursuant to the terms of Clause 20.8 of the contract.
It is clear to this court that the Clause 20 of the contract provides for two forms of dispute resolution that of DAB and arbitration. The contract contains what can be called a multi-tiered approach to dispute resolution between the parties.
Under the contract essentially ACE undertook to do works including design and the construction inter alia at the Affordable Development Housing Scheme Resettlement at Bellevue Chopin in the Commonwealth of Dominica.
Works commenced and there arose a dispute between the two parties to the contract.
I will lay out the relevant parts of Part 20 of the agreement as the issue before the court really concerns the true construction to be placed on this part of the contract.
The relevant clauses in the case at bar are set out below;
“Part 20.2 – Appointment of the Dispute Adjudication Board
Disputes shall be adjudicated by the DAB in accordance with Sub-Clause 20.4 [obtaining Dispute Adjudication Board's Decision]. The parties shall jointly appoint a DAB by the date 28 days after a Party give notice to the other Party of its intention to refer a dispute to a DAB in accordance with Sub Clause 20.4.
…
The appointment of any member may be terminated by mutual agreement of both parties but not by the employer of the contractor alone. Unless otherwise agreed by both the Parties, the appointment of the DAB (including each member) shall expire when the DAB has given its decision on the dispute referred to it under Sub Clause 20.4 [Obtaining Dispute Adjudication Board's Decision] unless other disputes have been referred to the DAB by the time under Sub-Clause 20.4, in which even the relevant date shall be when the DAB has also given directions on those disputes.
20.3 Failure to Agree Dispute Adjudication Board
If any of the following conditions apply, namely:
(a) the parties fail to agree upon the appointment of the sole member of the DAB by the date stated in the first paragraph of Sub-Clause 2 [Appointment of the Dispute Adjudication Board],
(b) either Party fails to nominate a member (for approval by the other Party) of the DAB of three person by such date,
(c) the Parties fail to agree upon the appointment of...
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