The High Court has sent a €175,000 arbitration award arising from structural steelwork on a University College Dublin building back to the arbitrator for further consideration.
Mr Justice Roderick Murphy rejected J.J. Rhatigan & Company Limited's claims that arbitrator Dermot F. Roughan had acted with bias or misconduct. However, he found that the reasons supplied for the award did not adequately explain how the final sum had been calculated.
Rhatigan was the main contractor for the CSCB Building at UCD. Paragon Contracting Limited was engaged under a May 2004 subcontract to provide drawings and fabricate, supply and install structural steelwork for €247,000.
Rhatigan terminated Paragon's engagement in October 2004. The resulting dispute went to arbitration. Paragon claimed €305,347 plus VAT, while Rhatigan counterclaimed for €388,418 plus interest and VAT, including costs associated with engaging replacement subcontractor Bisset Engineering.
After hearings over five days in September 2006, the arbitrator issued an award on 6 February 2007 directing Rhatigan to pay Paragon €175,000 plus VAT. A separate reasons document followed in March.
Rhatigan argued that the award should be set aside, alleging inadequate reasons and lack of impartiality. The court accepted that the applicable arbitration rules allowed reasons to be supplied separately from the formal award.
It also rejected allegations of bias relating to privileged material inadvertently disclosed during the case, questions asked of witnesses and a remark comparing one witness to Margaret Thatcher. The court found no real likelihood of bias and no misconduct sufficient to justify removing the arbitrator or setting aside the award.
The problem instead was the explanation of the figure. Although the arbitrator discussed witness credibility and most disputed issues, he did not explain how claims totalling hundreds of thousands of euro were resolved into the €175,000 award or explicitly deal with the counterclaim.
The High Court therefore remitted the matter to the arbitrator for reconsideration rather than setting the award aside.