The High Court has dismissed an application by Clarke Quarries Limited to stop P. T. McWilliams Limited from pursuing a compensation claim through adjudication while arbitration over the same dispute was pending.
In a judgment delivered on 24 August 2009, Miss Justice Laffoy decided the contractual interpretation issue at the hearing of what had been brought as an application for an interlocutory injunction. The parties had agreed that the court should treat it as the trial of that issue. The court did not determine the underlying contractual disputes or the amount, if any, payable.
The dispute arose from a design and build contract for a multi-storey car park and site enabling works in a major development in Monaghan. McWilliams had suspended work in November 2008, alleging a contractual termination event. Clarke then purported to terminate the contract, first on stated contractual grounds and later on different grounds, and subsequently said McWilliams had repudiated the contract. An adjudicator, Anthony Hussey, found on 24 February 2009 that Clarke’s 4 December termination notice was wrongful. Clarke referred that issue and a separate suspension dispute to arbitration. McWilliams also served an arbitration notice that included a claim for unpaid sums.
McWilliams later sought €4,456,302.50, plus VAT as applicable, as compensation following termination. It referred that claim to adjudication in May 2009. Clarke argued that the compensation claim was the same dispute McWilliams had already referred to arbitration and could not be pursued in both processes. McWilliams submitted that the contract allowed adjudication and arbitration to run at the same time.
Justice Laffoy found nothing in the contract expressly or implicitly barring adjudication of a dispute already referred to arbitration. She considered the adjudication provisions designed to provide a speedy, provisional decision that would bind the parties pending final resolution by arbitration, legal proceedings or agreement. The possibility that the same claim might need to be addressed in both processes, and the risk of inconsistent findings, were inherent in that arrangement.
The judge also rejected Clarke’s argument that compensation quantification was unsuitable for adjudication, pointing to contract provisions directing disputes about termination consequences, including compensation, to a fast track adjudication procedure. She said she inclined to the view that the contract contemplated adjudication as a preliminary stage before arbitration, but did not express a definitive view on that point.
The court dismissed Clarke’s application and, on the stated understanding of the parties’ intention if the application failed, dismissed the proceedings. The ruling determined that McWilliams could continue the May adjudication despite its earlier arbitration notice; it did not decide the compensation claim itself.