The High Court has refused an application to send a dispute over about £1.2 million in consultancy fees connected with the construction of a new hospital in Enniskillen to international arbitration in Geneva.
P. Elliot & Company Limited, then in receivership and liquidation, sued FCC Elliot Construction Limited for money it said was due under a consultancy agreement relating to the hospital project in Co Fermanagh.
The commercial arrangements had begun in 2008 when P. Elliot and Spanish company FCC Construcción S.A. entered a joint venture to bid for the hospital design-and-build contract. That agreement contained an International Chamber of Commerce arbitration clause with Geneva as the seat.
The planned structure subsequently changed following tax advice. A newly incorporated Irish company, FCC Elliot Construction Limited, became the party to the main building contract, while construction works were subcontracted to Northern Irish companies. The main building contract did not use the original arbitration mechanism.
Ten days after that building contract was signed, P. Elliot and FCC Elliot entered the consultancy contract now in dispute. Crucially, that agreement contained no arbitration clause. Instead, it expressly selected Irish law and Irish jurisdiction.
FCC Elliot nevertheless asked the High Court to stay the Irish proceedings after it and FCC Construcción had requested ICC arbitration in Geneva. It argued that the consultancy arrangement was closely connected with the original joint venture and should fall within its arbitration clause.
Mr Justice Mac Eochaidh rejected that argument. He held that commercial connections between the companies were insufficient to allow FCC Elliot to borrow an arbitration clause from an agreement to which it was not a party. The deliberate inclusion of different dispute-resolution provisions in later agreements showed that the parties had chosen different arrangements for different contracts.
The judge also refused to stay the case under the High Court’s inherent jurisdiction. The ruling does not decide whether the claimed consultancy fees are actually due; that dispute remains for determination in the Irish proceedings.