CFC Construction (Engineers) Ltd v Runaway Bay Development Ltd
| Jurisdiction | Jamaica |
| Judge | SYKES J |
| Judgment Date | 13 February 2006 |
| Judgment citation (vLex) | [2006] 2 JJC 1301 |
| Date | 13 February 2006 |
| Court | Supreme Court (Jamaica) |
IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
CIVIL DIVISION
ARBITRATION - Permission to enforce award - Application
APPLICATION FOR PERMISSION TO ENFORCE ARBITRATION AWARD UNDER SECTION 12 OF THE ARBITRATION ACT
1. CFC Construction (Engineers) Limited (CFC) has applied for permission to enforce an arbitration award as if it were a judgment of this court. Section 12 of the Arbitration Act permits this. Runaway Bay Development Limited (RBDL) is opposing the application. This is an inter partes hearing. This came about because on December 20, 2005, at the commencement of CFC's ex parte application, RBDL appeared and indicated their opposition to the application. It was thought prudent to invite RBDL to make submissions in this regard.
How the courts should approach arbitration awards
2. The law is now at the point where the courts should seek to uphold arbitration awards rather than work assiduously to overturn them. There are a number of good reasons for this. I cite just some of the authorities that support this proposition. The quotations also include the reasons for this approach. In 1948 Lord Goddard stated in Mediterranean & Eastern Export Company Ltd v Fortress Fabrics (Manchester) Ltd [1948] 2 All ER 186, 189 said
The day has long gone by when the Courts looked with jealousy on the jurisdiction of the arbitrators. The modern tendency is, in my opinion, more especially in commercial arbitrations, to endeavour to uphold award of the skilled person that the parties themselves have selected to decide the question at issue between them. If the arbitrator has acted within the terms of his submission and has not violated any rules of what is so often called natural justice, the Courts should be slow indeed to set aside his award.
No doubt this was to refute the approach of Scrutton L.J. in In re Boks & Co and Peters, Rushton & Co Ltd [1919] 1 K.B. 491 who said at page 497, that the summary method of enforcement is only to be used in reasonably clear cases.
The modern approach was affirmed by the English Court of Appeal in Middlemiss v Hartlepool Corporation [1972] 1 W.L.R. 1643. In February 1988 the Jamaican Court of Appeal said, through Downer J.A., in Marley and Plant Ltd v Mutual Housing Services (1988) 25 J.LR. 38, 39D:
The jurisdiction of the Supreme Court to set aside the award of an arbitrator is circumscribed because the parties have chosen their own tribunal and the findings of an arbitrator expressed or necessarily implied are not to be disturbed save in well defined circumstances.
3. While it is true that the application before me is an application for permission to enforce the arbitration award and not an application to set aside I cannot ignore how the courts treat arbitration awards. It seems to me that in light of the courts' attitude to setting aside awards courts should endeavour to facilitate enforcement of the awards rather than seek to restrain enforcement.
4. I had a similar application to deal with in November 2004. In that case I declined to set aside a previous order for permission to enforce the award (see VRL Services Ltd v Sans Souci Limited Claim No HCV 02205/2004, (delivered November 9, 2004)). On appeal the decision was reversed on the basis that I had erroneously concluded that the failure by the enforcing party to disclose the fact of a challenge to the judge who had granted permission to enforce the award was not a material non-disclosure (see Sans Souci Ltd v VRL Services Ltd SCCA No 108/2004 (November 18, 2005)). The Court of Appeal did not say that my views on the approach to applications of this nature were incorrect. The position I took then was advanced before the Court by Mr. Mahfood QC (see pages 18 and 19) but McCalla J.A. (Ag) declined to comment one way or the other preferring, instead, to resolve the case on the non-disclosure point. Consequently, I see no reason to revise them and I have seen no new material to show that I was misconceived in that approach. I therefore adhere to the approach set out at paragraphs 12 to 17 of my judgment in the San Souci case referred to above and so there is no need to repeat them at length here.
5. The point therefore is that it is not sufficient for an opponent of the application for permission to enforce the award to turn up and simply say, "Judge, you cannot grant permission because I am challenging the award". The opponent must do more. He must show, from an examination of the award and/or other material before the arbitrator some defect that gives him a real prospect of successfully setting aside the award. This means he must identify some prima facie error on the face of the record or some error in logic or interpretation of law, evidence or application of law to fact or breach of natural justice or some other kind of misconduct before the pendulum in favour of permission to enforce begins to swing back in his favour. If it were otherwise, it would make nonsense of arbitrations because the parties who would have expended significant time and resources could not be confident that even the best arbitration would not be brushed aside. This is all the more important given the renewed thrust towards non-litigious resolution of disputes where this is possible. We as judges don't assume arbitrators are wrong thus shifting the burden to those who wish to enforce to show that the arbitrator was correct. Rather, we assume he did his job properly unless there is some showing that this might not be so. The opponent to the permission to enforce does not at this stage have show that he is certain to be successful but it surely cannot be as low as merely filing a challenge. This is how I approach the application in this case. I now turn to a brief history of the matter.
The contract
6. On September 17, 1997 RBDL employed CFC to construct a massive 225 room hotel in, the parish of St. Ann, the land of Marcus Garvey and Robert Marley, two of Jamaica's icons. They might not have approved of the eventual name of the hotel which was Hedonism 111 but they would have certainly welcomed the employment and income generated in the parish. The value of the contract was a substantial JA$726,850,869.04.
7. In contracts of this magnitude the parties anticipated that disputes would arise during the course of construction and so made provisions for resolving them. The contract stipulated that there would be a project manager and an adjudicator. These two persons were charged, inter alia, with the responsibility of settling the expected disagreements. The contract also provided for arbitration in the event the contracting parties could not resolve certain issues between them at the level of the project manager or the adjudicator. Another feature of the contract was a system of damages imposed on the contractor if he failed to meet certain targets and bonuses payable to him if he met certain targets.
The arbitration
8. Needless to say a severe dispute arose between the parties. They proceeded to arbitration. By joint letter dated January 3, 2001, both...
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