TRINIDAD AND TOBAGO IN THE HIGH COURT OF JUSTICE Cv. #2012/1981 BETWEEN GORDON WINTER COMPANY LIMITED CLAIMANT AND THE NATIONAL GAS COMPANY OF TRINIDAD AND TOBAGO DEFENDANT BEFORE THE HONOURABLE MADAM JUSTICE M. DEAN-ARMORER APPEARANCES Mr. Ian Benjamin Attorney-at-Law for the Claimant. Mr. Prakash Deonarine Attorney-at-Law for the Defendant. Introduction REASONS 1. On 16 th May, 2012, the Claimant, Gordon Winter, instituted proceedings against the National Gas Company (NGC) for damages for breach of contract. 2. By a Notice of Application filed on 9 th October, 2012, the Defendant sought Orders in the following terms: a. A declaration that the Court has no jurisdiction to try the claim. b. Further...if the Court has jurisdiction to try the claim it should not exercise its jurisdiction. Page 1 of 11
3. On 11 th October, 2012, I delivered an oral ruling dismissing the Defendant s Application. My reasons for so doing are set out below. In so doing I considered the circumstances in which the Court was invested with jurisdiction to set aside arbitral awards and what was the appropriate order which the Court would made if it chose to refrain from setting aside. 4. In support of this application the Defendant relied on the Affidavit sworn by Sham Sahadeo on 9 th October, 2012. On 28 th February, 2013, the Claimant filed an Affidavit sworn by Simon Jardine in opposition to the Defendant s Application. 5. Parties relied on written and oral Submissions. Facts 6. The relevant facts are largely undisputed and begin on the 6 th May, 2008 when the Claimant and the Defendant executed a contract pertaining to the piling and foundation works for the Pheonix Park Valve Upgrade Project. 7. The contractual documents incorporated the General Conditions of Contract per FIDIC 1 1999. The contract included amendments to the FIDIC Contract and in particular to Clause 20.6. The amended sub-clause reflected the following agreement. 20.6 unless settled amicably any dispute shall be finally settled by reference at the option of either party to arbitration. 8. Disputes arose. On 22 nd December, 2008, parties met to chart the way forward and it was agreed that a FIDIC Dispute Adjudication Board (DAB) 2 be convened to adjudicate the Claim. 9. Parties therefore entered into a new agreement entitled the Dispute Adjudication Agreement the DAA 3 with Professor Winston Suite, who was selected as the sole adjudicator. 1 Federation Internationale des Ingenieurs Conseils. 2 Dispute Adjudication Board. 3 Dispute Adjudication Agreement. Page 2 of 11
10. The DAA is a written document and its interpretation is at the heart of this Application. I will return to it. 11. On 13 th August, 2010, the parties accepted the resignation of Professor Suite, who opted to resign owing to an apparent conflict of interest. 12. On 16 th August, 2010, the Claimant served a Notice of their pending Claim. In this letter the Claimant accepted that the DAA was terminated 4 : Accordingly on reference to the General Conditions of the DAA... the Adjudicator has provided simple notice and your are notified that the DAA is terminated...consequently we hereby serve notice of our pending claim for this matter and consequential cost which will be assessed... 13. Parties exchanged correspondence. The Defendant adhered to the position that the High Court was an inappropriate forum. On 3 rd April, 2012, the Claimant issued a Pre-action Protocol Letter. 14. The Defendant replied to the Pre-action Protocol Letter dated the 31 st July, 2012. In this letter, learned Attorneys-at-Law for the Defendant expressed the view that the High Court had no jurisdiction and that the DAB 5 is the proper forum and that proceedings could be continued with a replacement to Professor Suite. The DAA 6 15. The DAA was an agreement signed by the parties and Professor Winston Suite on 14 th October, 2009. The document recorded the following agreement: That the DAB should decide matters described in Appendix II. Such decisions should be in accordance with terms in Appendix I. Appendix I was attached to the DAA and was an extract of printed terms. 4 DAA... Dispute Adjudication Agreement. 5 DAB... Dispute Adjudication Board. 6 DAA... Dispute Adjudication Agreement. Page 3 of 11
It was agreed in the DAA that Clause 20.4 of the Appendix I would be amended. By Clause 20.4 as amended the parties agreed that disputes could be referred to a DAB 7. It was also agreed that Clause 20.6 which allows parties to be referred to arbitration be deleted. 16. By Clause 6 of the Dispute Adjudication Agreement the parties agreed: Save as expressly amended above, the provisions of the Construction Contract shall continue to apply with the same effect as was provided prior to the effective date... 17. An Appendix to the DAA 8 contained the General Conditions of the Dispute Adjudication Agreement. Clause 9 thereof states: Any dispute or claim arising out of or in connection with the Dispute Adjudication Agreement shall be finally settled under the Rules of Arbitration of the ICC. ISSUE 18. The issue which arose for my decision was therefore to ascertain the intentions of the parties as stated in the DAA Agreement of 14 th October, 2009 and to ascertain the intention of the parties upon the resignation of the sole adjudicator. LAW 19. Civil Proceedings Rules 1998 Part 9.7 1. A defendant who wishes: a. To dispute the court s jurisdiction to try the claim; or 7 DAB...Dispute Adjudication Board. 8 DAA... Dispute Adjudication Agreement. Page 4 of 11
b. Argue that the court should not exercise its jurisdiction may apply to the court for an order declaring that it has no such jurisdiction or should not exercise any jurisdiction which it may have. 2. A defendant who wishes to make such an application must first enter an appearance. 3. An application under this rule must be made within the period for filing a defence... 4. If the defendant a. enters an appearance; and b. does not make such an application within the period for filing a defence he is treated as having accepted that the court has jurisdiction to try the claim... 20. Czarnikow v Roth Schmidt & Co [1922] 2KB 478 was cited by Mr. Benjamin, learned Counsel for the Claimant. That case concerned a contract for the sale of sugar. The contract was subject to the rules of the Refined Sugar Association Rule 19 of which required: Neither, buyer, seller, trustee in bankruptcy... shall require nor shall they apply to the Court to require the arbitrators to state... a special case for the opinion of the Court... A dispute arose. The buyers requested the arbitrators to state a special case under section 7 of the Arbitration Act 1889. It was held by the Court of Appeal that the agreement was contrary to public policy and invalid as involving an ouster of the statutory jurisdiction of the Courts under the Arbitration Act. 21. In the course of oral submissions, learned Counsel, Mr. Deonarine referred to the words of Bankes L.J. in Czarnikow: No one has ever attempted a definition of what constitutes an ouster of jurisdiction. Each case must depend on its own circumstances... Page 5 of 11
Bankes L.J. highlighted differences of opinion between Crompton J. and Coleridge J., the latter of whom entertained the view that the judgment of the Court of Exchequer: Stood on a safe distinction between an agreement which would close entirely access to the Courts of law and that which only imposes as a condition precedent... that the parties shall first have settled by an agreed mode the precise amount to be recovered... 22. The claimants relied as well on H.C.A. #Cv. 1541 of 2003 ICS Grenada Ltd. v NH International in which the Respondent contended that Article 28(6) was void. The relevant ICC Rules provides: Every award shall be binding on the parties. By submitting the dispute to arbitration... the parties undertake to carry out any award without delay and shall be deemed to have waived their right to any form of recourse in so far as such waiver can validly be made. The Honourable Justice Jamadar (as he then was) held that the Article was not intended to operate as an absolute waiver. The jurisdiction of the Courts in the context of Arbitration agreements. 23. Mr. Deonarine Learned Counsel for the defendant cited and relied on two judgments of the High Court of Trinidad and Tobago: THA v Ronald Nurse and Seereeram Bros 9 which was a decision of the Honourable Justice Narine. THA v Ronald Nurse 10 The two judgments were related to the same fact situation. The parties, THA and Seereeram Bros had entered into an agreement in respect of works on the Crown Point Aerodrome, Tobago. Unhappy differences arose and the parties entered into an arbitration agreement, appointing Ronald Nurse as arbitrator. 9 Cv. 603 of 2006. 10 H.C.A. 765 of 2005. Page 6 of 11
24. The learned Justice Narine (as he then was) set out in his judgment the many attempts of the arbitrator over some ten (10) years to mobilise the proceedings, and the arbitrator s final decision to proceed on the basis of documents in his possession 11. On 14 th November, 2005 the Arbitrator delivered his award and the claimant, THA applied to the High Court to set aside the award. 25. At paragraph 9 of his judgment, the Honourable Justice Narine identified those situations in which the High Court has jurisdiction in respect of an Arbitrators Award. He had this to say: Jurisdiction: 1. Where an Arbitrator has misconducted himself or the proceedings, the Court may remove him and set the award aside - See: Section 19 (1) and (2) of the Arbitration Act Ch. 5:01. 2. The Court also has an inherent jurisdiction to set aside an award which a. is subject to an error of law or fact on the face of the award. b. is wholly or partly in excess of jurisdiction, or c. does not comply with the requirements of finality and certainty. 3. The Court has a discretion to remit an award for re- consideration where: a. the award is bad on the face if it; b. there has been an admitted mistake and the Arbitrator himself asks that the matter be remitted; c. there has been misconduct on the part of the Arbitrator; and d. additional evidence has been discovered after the making of the award. See: Russell on Arbitration ibid 429 12. 11 See Cv. 603 of 2006 THA V Ronald Nurse and Seereeram Bros. Per Narine J. at paragraph 38. 12 Cv. 603 of 2006 Tobago House of Assembly v Ronald Nurse and Anor. Per Narine J. at page 9 of 15. Page 7 of 11
26. Learned Counsel, Mr. Deonarine, in the course of his supplemental oral submissions cited and relied on DGT Steel and Cladding Ltd. v Cubitt Building and Interiors Ltd. 13. In that case, Justice Peter Coulson Q.C. identified the issue raised before him in this way: In what circumstances if any should a temporary stay be granted to restrain court proceedings until an adjudication of the underlying dispute has taken place... 14 In that case, the claimant was engaged by the defendant to carry out works under a sub contract based on the defendant s standard terms. One term of the sub contract reflected the parties agreement in mandatory terms to submit any dispute question or difference to adjudication. The claimant s claim that the defendant owed 193,000.00 was rejected. The claimant instituted court proceedings. Judge Peter Coulson Q.C. granted the stay of the Court proceedings and held that if parties had agreed on a particular method by which their disputes were to be resolved then the court had an inherent discretionary jurisdiction to stay proceedings brought in breach of that agreement. 15 27. In the course of his judgment Judge Peter Coulson Q.C. considered the court s jurisdiction to grant a stay. He referred to the House of Lords decision in Channel Tunnel Group Ltd. v Balfour Beatty Construction where court proceedings had been commenced despite a term of the contract which referred disputes first to a panel of experts and then to arbitration in Brussels. The House of Lords there held that the court had an inherent albeit discretionary power to stay proceedings brought before it in breach of an agreement to decide disputes by an alternative method. 16 At page 136 H, Judge Peter Coulson Q.C. summarised the law in this way: 12. I derive from the authorities the following three principles... 13 DGT Steel and Claddings Ltd v Cubitt Building & Interiors Ltd. [2008] Bus L.R. 14 Ibid at page 133G. 15 DGT Steel and Cladding Ltd. v Cubitt Building & Interiors Ltd. [2008] Bus L.R. page 132. 16 DGT Steel Ltd. v Cubitt Building Ltd. [2008] Bus LR. Page 8 of 11
a. The court will not grant an injunction to prevent one party from commencing and pursuing adjudication proceedings... b. The court has an inherent jurisdiction to stay court proceedings issued in breach of an agreement to adjudicate. Reasoning & Decision 28. Learned Counsel Mr. Deonarine submitted that there were three possible interpretations of the Dispute Adjudication Agreement. The first two were that Clause 9 of the General Conditions of Dispute Adjudication Agreement refers disputes to the ICC. 29. The third interpretation was built on an acceptance that the Dispute Adjudication Agreement having failed or terminated the parties would revert to paragraph 20.6 of the Pre-Dispute Adjudication Board Agreement and the dispute should be referred to arbitration. 30. Mr. Benjamin relied on the principle that an agreement to oust the jurisdiction of the Court is contrary to public policy. Mr. Deonarine countered that what was being sought was not an ouster of the Court s jurisdiction but a declaration that the Court does not have exclusive jurisdiction 31. Mr. Benjamin referred as well to Clause 20.3 of Appendix I to the Dispute Adjudication Board Agreement which provides inter alia for the eventuality of the parties failing to agree on the appointment or replacement person within forty-two (42) days after the date on which a sole member declined to act. Clause 20.3 provides in that situation for the appointing entity or official named in the Appendix to tender to appoint this member to the Dispute Adjudication Board. 32. There was no dispute that Professor Suite resigned on 13 th August, 2009 and that after forty-two (42) days thereafter there had been no appointment for the reason that there was no official or entity named in the Appendix to tender. 33. Mr. Benjamin submitted further that the failure to appoint a replacement under Claim 20.4 fell to be resolved by Clause 20.8 which referred the matter to Arbitration. Mr. Page 9 of 11
Benjamin argued further that the Arbitration Clause which was 20.6 had been deleted and there was no agreement to proceed to arbitration, leaving recourse to the High Court as the only option. 34. Learned Counsel Mr. Deonarine submitted that the Court should apply a business common sense approach. Learned Counsel cited Rainy Sky v. Kookmin Bank [2011] UKSC 20 at paragraph 21: Where there are two possible meanings the Court will be entitled to prefer the construction which is consistent with a business common sense...and to reject the other.... 35. I considered whether the Dispute Adjudication Agreement was susceptible multiple meanings. Firstly it is clearly restricted to the adjudication of matters listed at Appendix II. In my view disputes related to matters extraneous to Appendix II fall to be determined according to the Pre-Dispute Adjudication Agreement. 36. The Dispute Adjudication Agreement appears to remove all avenues for arbitration, by deleting Clauses 20.6, 20.7 and 20.8. The Dispute Adjudication Agreement by Appendix I has become impossible to perform, forty-two (42) days having lapsed, it falls to the appointing entity to appoint a replacement under 20.3. There is no such official. The absence of such an official in my view appears to result in a complete stalemate and failure of the Dispute Adjudication Agreement. In such circumstances, it would be necessary to have the Dispute Adjudication Agreement considered and interpreted before having it declared frustrated. In my view, it is a matter of contention whether this task falls by Clause 9 to the ICC or whether its falls to the High Court. 37. In my view before approaching the High Court the parties must exhaust avenues provided for in their agreement. Clause 9 of the Appendix provides for recourse to the International Chamber of Commerce. In my view this avenue must be exhausted before there is an approach to the High Court and it is proper that the proceedings be stayed until this is done. Page 10 of 11
38. I considered whether I should grant a stay of the proceedings before me. The defendant would, in my view have been entitled to a stay as envisaged in DGT Steel and Cladding Ltd. v Cubitt Building. As in that case, the parties before me were under an obligation to exhaust the avenue provided at Clause 9 of Appendix I of DAA, that is to say to have the disputes as to the interpretation of the DAA resolved by recourse to the International Chamber of Commerce. 39. The defendant had not however sought a stay. In their Notice of Application filed on 9 th October, 2012, the defendant was faithful to all the paces indentified at Part 9 of the Civil Proceedings Rules of 1998. The defendant, within the time prescribed sought a declaration that the Court had no jurisdiction. According to Mr. Deonarine s submission however the defendant was not seeking a declaration of a want of jurisdiction, but a declaration that the Court lacks exclusive jurisdiction. 40. In my view the proper application ought to have been crafted according to the principles identified by Judge Peter Coulson Q.C. in DGT Steel v Cladding Ltd. v Cubitt Building and Interiors Ltd. 41. In so far as the defendant is contending that the claimant failed to exhaust agreed measures, the defendant ought to have sought a stay. 42. The orders sought in the Notice of Application are not appropriate to the instant case and accordingly I was of the view that the Notice of Application ought to be dismissed. Dated this 7 th day of November, 2013. M. Dean-Armorer Judge Page 11 of 11