Jamaica Hydroponics Ltd v Alumina Partners of Jamaica
| Jurisdiction | Jamaica |
| Judge | PANTON, P. , DUKHARAN, J.A. , HARRISON J.A (Dissenting) |
| Judgment Date | 14 May 2010 |
| Neutral Citation | JM 2010 CA 72 |
| Judgment citation (vLex) | [2010] 5 JJC 1401 |
| Court | Court of Appeal (Jamaica) |
| Date | 14 May 2010 |
ARBITRATION - Final award - Reconsideration of final award - Arbitration Act, s. 11 - Breach of collateral agreement - Loss of profits - Interest
ORDER
By a majority (Harrison, J.A. dissenting) appeal dismissed. Order of Sykes, J. affirmed. Costs to the respondent to be agreed or taxed.
On 11 December 2008, Sykes, J. refused the appellant's application to remit the matter of the sums to be awarded to the appellant under paragraphs 1 and 9 of the final award to the arbitrator for reconsideration pursuant to section 11 of the Arbitration Act.
The appellant and the respondent were in a contractual relationship whereby the respondent would provide a prepared area for the appellant to operate six greenhouses. The respondent failed to keep its part of the bargain. The dispute was referred to arbitration. The arbitrator Miss Hilary Phillips, Q.C., (now a judge of appeal) handed down her award. There are aspects of that award which are not to the liking of the appellant. The arbitrator was written to with a view to amending the award. The arbitrator held her ground, and pointed out that the issues raised did not fall under section 8(c) of the Act, in that there was no clerical mistake or error arising from any accidental slip or omission. The appellant turned to the Supreme Court for a resolution in its favour. Sykes, J. refused the application.
The final award reads thus:
"1. The Claimant is entitled to compensation for the breach of the collateral agreement between the parties dated the 21 st day of January 2005, such compensation to be calculated by way of lost profits, that is $76,398,594.67 to be paid by the Defendant subject to clause 6 below.
2. The Claimant is entitled to payment from the Defendant of the increased amount for construction costs in the amount of $12,469,163.00.
3. The Claimant is entitled to payment from the Defendant of the costs for preparing and marling the roads in the amount of $2,817,000.00.
4. The Claimant is not entitled to recover from the Defendant, Bank charges.
5. The Claimant is entitled to recover from the Defendant the sum of $9,984,045.16 representing interest on loss of profits.
6. The amount of $37,500,000.00 already paid by the Defendant pursuant to the interim order made on 30th May 2007 must be deducted from the amounts set out above.
7. I find that the Claimant has taken reasonable steps to mitigate its losses.
8. The Claimant is entitled to be paid by the Defendant, as aforesaid, all reasonable costs of these Arbitration Proceedings to be agreed between the parties and must only refer to the Arbitrator for final determination, if the parties fail to agree the sum. The amount of Six Million Dollars ($6,000,000.00) must be deducted from the costs agreed or ordered on the basis of the interim award made on the 30th May 2007.
9. The Defendant is ordered to pay the Arbitrator's fees and ancillary expenses relative to the use of the venue, which is submitted with the award.
10. Interest is due on the final amount calculated and awarded herein at the rate of 6% from the date of the award until payment.
11. There shall be deemed to be awarded and incorporated in this award the appendices attached hereto."
Before Sykes, J. was an amended fixed date claim form which sought the following order:
"1. The following matters be remitted to the learned Arbitrator for reconsideration pursuant to section 11 of the Arbitration Act, namely:
(1) What is the sum which ought lawfully to have been awarded to the Claimant under paragraphs 1 and 9 of the award, for loss of profits and interest thereon, in place of the sums set out in the said paragraphs, based on the findings of fact made by the arbitrator;
(2) What is the sum which ought lawfully to have been awarded to the Claimant in respect of bank charges and interest thereon, in place of the nil award set out in paragraph 4 of the Award, based on the undisputed evidence before the Arbitrator.
(2) Such further or other relief as may be just.
(3) The Defendant pay the Costs of these proceedings and of the reconsideration by the learned arbitrator."
The grounds on which the claim was based were:
"1. The award of the learned Arbitrator in relation to loss of profits was vitiated by a serious error of law on the face of the record, in that on the basis of the facts as found by her, the only award which could lawfully have been made by (sic) for this item of loss was 117,815,976.00 and not $76,398,594.67
2. The learned Arbitrator erred in law in failing to exercise her powers under section 8(c) of the Arbitration Act to correct the error which she had made;
3. In ruling that the Claimant was not entitled to recover bank charges from the Defendant, the learned Arbitrator erred in law in that:
(a) the projections of expenditure submitted by the Claimant were unchallenged and accepted by the learned Arbitrator (at paragraph 57);
(b) those projections had included the estimated cost of repaying loan interest, and accordingly the claim for loss of profits had already been reduced by the amount of the projected loan interest; yet the Claimant had been obliged to pay out sums by way of loan interest;
(c) the learned Arbitrator failed to hold that the Claimant was entitled to reimbursement of these sums if restitution (sic) in integrum was to be made."
Section 11(1) of the Arbitration Act reads:
"In all cases of reference to arbitration the Court or a Judge may from time to time remit the matters referred, or any of them, to the reconsideration of the arbitrators or umpire."
The appellant is contending that the arbitrator made a mathematical error in her calculation of the damages awarded to the appellant, and that the court has the power to remedy the error by remitting the matter to the arbitrator for her to make a correct calculation.
According to Lord Gifford, Q.C., for the appellant, it is impossible to reconcile the arbitrator's reasoning at page 178 of the record (paragraph 94 of the summary of her findings) with page 189, her response to the request for correction of the amount.
Lord Gifford placed great emphasis on two judgments of the Court of Appeal of England - Mutual Shipping v Bayshore Shipping [1985] 1 All ER 520 and King v Thomas McKenna Ltd [1991] 1 All ER 653. In the former case it was held as follows -
"(1) Although s. 22 of the 1950 Act [which is identical to Jamaica's section 11(1)] did not enable the arbitrator to correct errors of judgment, whether of law or of fact, or to have second thoughts about his decision, it provided the ultimate safeguard to prevent injustice by giving the court a wide power to remit an award to the arbitrator where he had made either a clerical mistake or an error arising from an accidental slip or omission. Accordingly, the question for the court was whether the error made by the arbitrator arose from an accidental slip or omission. In the circumstances , (per Sir John Donaldson MR) in order to ascertain the nature and effect of the error it was necessary to look at the reasons given by the arbitrator, although the cases in which the court would do so were extremely unlimited since there was a public interest in preserving the finality of arbitral awards, or, alternatively (per Robert Goff LJ) it was unnecessary to refer to the reasons since the existence and nature of the error was sufficiently apparent, without breaching the confidentiality of the reasons, from the arbitrator's admission of his error and the parties' rival contentions and the evidence adduced.
(2) On the facts, the arbitrator, by mistakenly attributing evidence to the wrong parties, had made an accidental error which seriously affected the award, and since the award was before the court it would be unjust to allow it to remain uncorrected. Accordingly, the judge had been right to exercise his power under s 22 to remit the award to the arbitrator. The appeal would therefore be dismissed ... .
Per curiam. The power of an arbitrator under s 17 of the 1950 Act is the same as that of a High Court judge under RCS Ord 20, r 11 (the 'slip rule'), in that he can correct clerical errors or accidental slips, although he cannot be reconsider his award. It follows that where an error arises from an accidental slip the arbitrator can himself correct the error under s 17 of the 1950 Act without reference to the court ... .
Per Sir John Donaldson MR and Robert Goff LJ,
(1) Where an arbitrator has made an accidental error, he can himself apply to the court for the award to be remitted to him. .
(2) An admission of error by the arbitrator is not a prerequisite to the exercise of the court's jurisdiction to remit, although (per Robert Goff LJ) as a general rule the court should not interfere in cases of simple mistakes unless there has been a clear admission by the arbitrator of his error . ."
In King v Thomas McKenna Ltd the court held as follows -
"(1) The jurisdiction of the court under s 22 of the 1950 Act to remit an award to an arbitrator was wholly unlimited and not confined to the four traditional grounds for remission, ie where the award was bad on its face, where there had been misconduct on the part of the arbitrator, where there had been an admitted mistake and the arbitrator had asked that the matter be remitted and where additional evidence had been discovered after the making of the award, but...
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