The High Court dismissed Bradley Construction’s challenge to an arbitrator’s corrected costs award, finding that the application could proceed but did not meet the high threshold for setting aside or remitting the award.
Mr Justice Clarke delivered judgment on 31 July 2009. The dispute arose from a construction contract for a Volkswagen showroom in Drumlonagher, Donegal town. In earlier proceedings, the court allowed Bradley Construction’s claim for money due under the contract, while staying part of it pending arbitration of S. & R. Motors’ allegations about defective work, delay and a safety issue.
The arbitrator found against S. & R. Motors on delay and the safety issue, but allowed part of its defects case. After an earlier challenge, the High Court remitted aspects of the award, including costs, for reconsideration. The arbitrator then issued a corrected award giving S. & R. Motors its full arbitration costs. Bradley Construction challenged that costs decision. The arbitrator did not participate in the court proceedings.
The court first considered whether the challenge was brought in time. For a domestic arbitration, the applicable court rules set a six-week limit from notification that the award was available, with the court able to extend time where the interests of justice required. The court said the challenge missed that limit but extended time because there had been an unusually long delay in the parties receiving the corrected award, Bradley Construction was not culpably responsible for the delay, and there was no evidence of prejudice to S. & R. Motors. The court therefore did not need to decide whether the arbitration was domestic or international; the challenge was not time-barred either way.
On the merits, Bradley Construction argued that full costs were wrongly awarded when S. & R. Motors had succeeded only on defects and had lost on delay and the safety file. It also argued that the arbitrator should consider whether the unsuccessful issues increased arbitration costs, including the arbitrator’s own fees. The judge agreed that an arbitrator’s costs are a relevant factor, and said there was a case for taking a different approach to costs.
However, the judge noted that costs generally follow the event and that S. & R. Motors had obtained a reduction in the amount due only through arbitration. The arbitrator was best placed to assess whether the unsuccessful delay issue materially lengthened the hearing. The court was not satisfied that the award contained an error so fundamental that it could not stand. It dismissed the proceedings, leaving the corrected costs award in place.