The High Court has dismissed an application by Declan Hogan to set aside or remit arbitration awards arising from the sale of an accountancy practice by Thomas Byrne and Henry J. Curtin. The application concerned the calculation of the consideration Hogan owed and the arbitrator’s decision on interest and costs.
The sale agreement, dated 29 July 1994, provided for Hogan to contribute 70% of the consideration, with payments due in 1994, 1995 and 1996. It also allowed for adjustments if recurring fees were not maintained. Hogan argued that some clients had not been retained and that he was entitled to an abatement. The sellers claimed a balance of IR£56,539.70 in February 1997.
The arbitrator first acted as an expert under the agreement and issued an opinion in 1999. The parties later referred further disputes to him as an arbitrator. In an interim award in 2003, he set out the method for calculating the consideration. A final award in August 2007 applied that method, finding a balance of IR£69,030.36, equivalent to €87,658.36, after crediting payments already made. The award also set interest and costs.
Hogan argued that the interim award contained errors in its calculation method and that the final award contained a patent arithmetic error. He also said the arbitrator adopted a method the parties had not argued for without giving him a chance to address it. The defendants argued that the interim and final awards dealt with separate issues and that Hogan had waited too long to challenge the interim award.
Miss Justice Laffoy held that the interim award finally determined the methodology, while the final award applied it to the facts. Hogan had participated in the resumed arbitration without challenging that methodology, and was therefore estopped from seeking to set aside or remit the interim award. The judge also found that he had not established a patent error on the face of that award.
The court rejected the challenge to the final award as well. The arbitrator was not legally required to explain how he reached the balance figure, and the plaintiff’s calculations relied on a Scott Schedule that was not incorporated into the award. Without a reasoned calculation on the face of the award, the alleged monetary error was not obvious. The court found no basis to interfere with the final award’s determination of interest or costs and dismissed the application.