The High Court has refused an application by Kildare and Wicklow Education and Training Board to refer its payment dispute with K&J Townmore Construction Limited to arbitration. Mr Justice David Barniville found that the parties’ expert determination agreement displaced the contract’s arbitration clause for the disputes before the court.
The application concerned proceedings in which K&J Townmore sought payment of €2,954,147.22 for construction work at St. Conleth’s Community College in Newbridge, Co. Kildare. The contractor said the sum was due under invoices based on determinations made by an expert. The board did not pay. The judgment addressed only the board’s application under Article 8(1) of the UNCITRAL Model Law to refer the disputes to arbitration; it did not decide the payment claim or the merits of the parties’ dispute over the expert process.
The parties’ October 2015 building contract provided for conciliation and arbitration. After disputes arose, they agreed in 2016 to refer certain matters to expert determination. Revised terms signed in January 2017 gave the expert powers that included determining matters of quantum and directing payment or deduction of sums. The board later sought to withdraw from the process, disputing the expert’s jurisdiction and the way it had been conducted. The expert continued issuing determinations, which the contractor relied on in seeking payment.
The board argued that the expert process replaced the contract’s conciliation procedure but left its arbitration clause in force. The contractor argued that the agreement displaced both procedures for the matters referred to the expert. The judge concluded that the agreement provided for final and binding expert determinations and that the arbitration clause did not apply to those disputes. The contract’s arbitration clause covered disputes that could be referred to conciliation; the parties had instead agreed to send these disputes to the expert.
The judge also considered a later conciliation agreement, signed in August 2018. He said it did not restore the board’s right to refer these disputes to arbitration. The agreement gave the contractor certain options, including a possible referral to arbitration if the court refused to enforce the expert determinations, but did not give the board an equivalent right. The judge said this was an additional reason the board could not obtain the referral it sought.
The court refused the Article 8(1) application. The ruling applied to the disputes covered by the expert determination process; the judge said the contract’s arbitration clause remained applicable to other disputes. He directed that the parties be heard on the terms of the order and any consequential issues. The proceedings for payment and the contractor’s applications for summary judgment and entry to the Commercial List were not determined by this ruling.