The High Court has stayed proceedings brought by BAM Building Limited against UCD Property Development Company Limited over a payment recommended in a dispute about construction of UCD’s Sutherland School of Law.
The dispute arose under a construction contract dated 17 February 2012. A conciliator recommended on 30 November 2015 that UCD pay BAM €1,141,838.93. UCD issued a notice of dissatisfaction and referred the dispute to arbitration, but did not pay the recommended sum on account. BAM then brought court proceedings seeking, among other relief, a declaration that UCD had breached the contract and an order for specific performance of its payment provisions.
UCD applied to stay the court proceedings under Article 8(1) of the Model Law, as adopted by the Arbitration Act 2010. The parties agreed that their arbitration agreement was valid and that the underlying dispute had been referred to arbitration. They had also agreed on an arbitrator, although arbitration had not yet begun.
UCD argued that the conciliator’s recommendation was void because it was delivered after the agreed deadline. The deadline had been extended to 27 November 2015. The conciliator said that on that date a representative communicating for UCD asked for until the following Monday to respond to a query about the amount. The conciliator agreed to deliver the recommendation on 30 November. UCD disputed the recommendation both on the amount and on the timing; BAM argued that the timing issue fell outside the arbitration clause.
Mr Justice Brian J. McGovern held that the timing and validity issue was within the scope of the arbitration agreement, as was the question of the recommended amount. He said the contract’s dispute clause covered disputes arising under the contract and the notice of dissatisfaction identified the matters disputed and the reasons. Whether the representative had authority to seek more time, and whether the recommendation was therefore invalid, were matters for the arbitrator. The court did not decide those questions or determine whether the recommended payment was due.
The judge granted UCD’s application and stayed the court proceedings under Article 8(1). The order left the disputes for the arbitrator to determine.