The High Court refused Mayo County Council’s application to stop an arbitrator from hearing a payment dispute with Joe Reilly Plant Hire Limited. Mr Justice Brian McGovern ruled that the arbitrator had jurisdiction to hear a preliminary issue about his own jurisdiction. Whether the company was barred from seeking further payment remained for the arbitrator to decide.
The dispute concerns landfill remediation works carried out for the council between 2004 and 2009. The parties could not agree on the final amount due. In February 2011, the contract engineer directed that a balance of €127,408.21 be paid to the company. The council paid it, and the company cashed the payment without qualification.
The council argued that accepting the payment created an accord and satisfaction, settling the claim and making the arbitration clause inoperative. The company later sought further sums under the contract. After conciliation failed, it referred the dispute to arbitration.
On 11 May 2015, the arbitrator ruled at a preliminary hearing that he had jurisdiction. The council then applied to the High Court under Article 16(3) of the UNCITRAL Model Law, which allows a party to ask the court to decide a challenge to an arbitrator’s preliminary ruling on jurisdiction.
The judge said the arbitration clause covered disputes connected with the contract, including those arising after the works were completed. The parties did not dispute that the clause was valid or that the payment dispute fell within its scope. The council’s case was that the clause had ceased to operate because of the payment.
The court held that the accord and satisfaction argument did not go to the arbitrator’s jurisdiction. It was a defence to the company’s claim, and the arbitrator was the proper person to decide it. The judge also accepted that, in an Article 16(3) application, the court may consider evidence beyond what was put before the arbitrator.
The court refused the relief sought. It did not decide whether the payment settled the company’s claim or whether any further sum was due; those issues remained for the arbitration.