Lloyd's Maritime and Commercial Law Quarterly
English arbitration law 1999
Fraser Davidson *
Here begins a survey of English arbitration cases in 1999. These are more or less arbitrarily defined as cases which were reported during the year.
1. Beaufort Developments (N.I.) Ltd v. Gilbert-Ash (N.I.) Ltd. 1
Stay of proceedings
—power of arbitrator to open up, review and revise certificates issued by architects
—whether power possessed by court
Under a standard form of building contract disputes were to be referred to arbitration and the arbitrator was accorded power inter alia
to open up, review and revise any certificate. The contractors commenced litigation against the employers, claiming payment for work in respect of which architects’ interim certificates had been issued. The employers denied liability and alleged they were entitled to set off an amount in excess of that claimed. The contractors sought the appointment of an arbitrator and the employers then issued a writ against both the contractors and the architects, claiming damages for negligence and breach of contract. The contractors sought a stay of proceedings. This was granted and successive appeals dismissed on the basis that the court did not have the power which the contract conferred on the arbitrator to open up, review and revise certificates issued by the architects.
Decision:
The court possessed the aforesaid power. The appeal was allowed and a stay refused.
Held:
An arbitrator has no jurisdiction save that which is conferred by the parties, while the jurisdiction of the court is unlimited. So it is necessary for the contract to specify the powers which the arbitrator is to have, whereas there is no need to refer to the powers of the court. Accordingly it cannot be concluded that, by explicitly conferring powers on an arbitrator, the parties intend to remove these powers from the court. Thus the court did have the powers in question.
Comment:
This case overrules the celebrated decision of the Court of Appeal in Northern Regional Health Authority
v. Crouch (Derek) Construction Ltd,
2
which seemed to establish that the certificates of architects and engineers in such a context were reviewable only by arbitrators. It is also clear that their Lordships did not consider that such certificates could be conclusive unless the contract very clearly confers that status upon them.3
Thus if parties desire this result, their contracts must be expressed with some care.
* Alexander Stone Professor of Commercial Law, University of Glasgow.
1. [1999] A.C. 221 (H.L. (N.I.)).
2. [1984] Q.B. 644.
3. See, e.g., [1999] A.C. 221, 291G–H, per
Lord Hope of Craighead.
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