The High Court has dismissed an application by Deluxe Art & Theme Limited to set aside an arbitration award in its dispute with Sheffs Limited, which was in receivership and liquidation.
The award, made on 22 July 2013, gave Deluxe Art €60,427.58 including VAT, with interest at 8% a year from 24 August 2009 until payment. It did not grant the company’s requested declaration that it could exercise a contractual lien over unfixed materials and goods valued at €75,536.72.
The dispute arose from an April 2009 contract under which Deluxe Art agreed to provide and install fit-out works for €1.2 million. The contract allowed the contractor, in specified circumstances, to take possession of and retain a lien over certain unfixed materials and goods until money due was paid. Arbitrator Jude O’Loughlin concluded that Deluxe Art was “effectively estopped” from invoking that clause, citing its handover of the site and the disputed items and its acceptance that outstanding money would be paid from projected cash flow.
Deluxe Art argued that estoppel had not been pleaded or raised at the arbitration hearing and that it had no opportunity to respond. It said the finding denied it procedural fairness and relied on grounds in Article 34 of the UNCITRAL Model Law, including inability to present its case and a decision beyond the arbitration’s scope. Sheffs accepted that estoppel had not been raised, but argued that the arbitrator used the word in the general sense of “prevented” and had decided the contractual interpretation issue that the parties had debated.
Mr Justice Gilligan said the court’s power to set aside an arbitral award was very limited and that the question was whether “estoppel” was used in its legal or general sense. He said the award did not discuss the elements of legal estoppel. In his view, the arbitrator had interpreted the contract and found that Deluxe Art no longer met the clause’s conditions for exercising the lien.
The judge accepted that using a word with a distinct legal meaning was unfortunate, given the relief sought. But because the contract clause had been argued in full, the wording did not cause an injustice serious enough to justify setting the award aside. The judge also held that the application did not come within the relevant Model Law grounds. The application was dismissed; the underlying arbitration award remained in place.