The High Court has sent parts of an arbitration award back to the arbitrator to correct and reconsider costs, while refusing to disturb the amounts assessed for building defects at a car showroom in Donegal Town.
In a judgment delivered on 12 December 2008, Mr Justice Clarke ruled on S & R Motors (Donegal) Limited’s application to set aside or remit an award arising from a construction dispute with Kathleen Moohan and John Bradley, trading as Bradley Construction. Kevin Brady was the notice party and arbitrator.
The dispute concerned alleged defective construction and delay in building the showroom. In an earlier judgment, the court had entered final judgment for Bradley Construction on sums due under architects’ certificates, while staying execution on part of the amount pending arbitration of S & R Motors’ claims. The arbitrator’s July 2008 award directed S & R Motors to pay Bradley Construction €107,573.18, plus €9,639.88 in interest, and ordered it to pay the arbitration costs.
Justice Clarke held that Bradley Construction’s entitlement to payment had already been determined by the court. The arbitrator therefore exceeded his jurisdiction by addressing the principal debt, interest on it and the time for payment. The arbitration was limited to assessing S & R Motors’ claims for defective construction and delay; any amount allowed for defects would be set off against the court judgment by a further court order.
The judge remitted the award so the arbitrator could confine it to the issues within his jurisdiction and reconsider costs. He did not direct that S & R Motors receive all the costs. The arbitrator must take account of its success on the defects claim, while also considering that its separate claim about delay failed.
The court rejected the challenge to the arbitrator’s assessments of €20,000 for the floor defect and €11,500 for other defects. Justice Clarke said the arbitrator was entitled to assess damages on the basis that the contractor could have been given an opportunity to carry out remedial work before S & R Motors took possession. The court was not satisfied that the assessments contained a fundamental error warranting intervention.
The substantive proceedings were to be relisted after the arbitrator amended the award, so the court could consider its final order. S & R Motors would receive a set-off for the amount allowed on the defects claim; the existing stay would then end.