The High Court has refused an application by Newlyn Homes (Portugal) Limited to stay a deposit dispute between Maurice Walsh and Yvonne Rattigan pending arbitration, holding that the issue should have been raised alongside the company’s earlier jurisdiction challenge.
Mr Justice Hedigan gave judgment on 9 November 2012. The company had sought a stay under Order 56, rule 4 of the Rules of the Superior Courts, arguing that the dispute was subject to an arbitration agreement.
The plaintiffs agreed to buy a property in a Portuguese holiday development and paid a refundable €7,500 deposit. They later signed a real estate investment agreement on 4 September 2006 and paid a further €22,500. After planning approval was received in 2008, they declined to sign a promissory contract over concerns about its terms. The company retained the deposit, and the plaintiffs sought its return.
They issued proceedings in May 2011. The company first asked the court to decline jurisdiction, relying on a clause in the investment agreement that provided for Portugal as the forum. The High Court President refused that application after finding the plaintiffs were consumers and the jurisdiction clause could not be enforced against them. The company then brought the separate application for a stay based on the arbitration part of the same clause.
Applying the principle in Henderson v Henderson, Mr Justice Hedigan said a party may be prevented from raising an issue later if it could have been brought forward in earlier proceedings. He rejected the company’s argument that raising arbitration at the same time as its jurisdiction challenge would have waived its right to arbitration, saying no authority supported that proposition in the circumstances.
The judge also noted that the claim was for €22,500 plus interest, stated in the judgment as €42,027.75, and appeared to turn on interpretation of the investment agreement. He considered that resolving the dispute in Ireland would be more efficient than a three-arbitrator process, particularly given the possibility of a later appeal to a Portuguese court.
The court refused the stay application and said it would make any further orders needed to ensure the speedy resolution of the case. The judgment does not determine whether the plaintiffs are entitled to recover the deposit or resolve the underlying contractual dispute.