VRL Services Ltd v Sans Souci Ltd

• Jurisdiction: Jamaica
• Judge: Sykes J (Ag)
• Judgment Date: 09 November 2004
• Judgment citation (vLex): [2004] 11 JJC 0903
• Court: Supreme Court (Jamaica)
• Date: 09 November 2004

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO HCV 02205/2004

BETWEEN

VRL SERVICES LIMITED

CLAIMANT

AND

SANS SOUCI LIMITED

DEFENDANT

IN CHAMBERS

Dr. Lloyd Barnett instructed by Hugh Hart of Hart, Muirkread and Fatta for the claimant

Mr. Stephen Shelton and Miss Haydée Gordon instructed by Noel Levy of Myers, Fletcher and Gordon for the defendant

ARBITRATION - Arbitration award - Permission to enforce award - Application to set aside permission - Arbitration Act, s. 13

Sykes J (Ag)

1 APPLICATION TO SET ASIDE PERMISSION TO ENFORCE ARBITRATION AWARD

2 1. On September 22, 2004, Reid 3 granted permission to VRL Services Ltd (VRL) to enforce its arbitration award against Sans Souci Limited (SSL). Section 13 of the Arbitration Act authorised this course. SSL now applies to set aside the order or in the alternative to stay execution of the award until the final determination of SSL's application in Claim No. 2004 HCV 2161. The grounds on which it relies are

• a) VRL's application was made ex parte and it failed to disclose to Reid J that SSL had filed a challenge to the arbitration award before VRL had applied to enforce the award;

• b) SSL should have the opportunity to argue its case first since it was filed first;

• c) the award is ambiguous and cannot be enforced summarily under section 13 of the Arbitration Act.

3 2. The application was dismissed with costs of the application to VRL and leave was granted to SSL to appeal. These are my reasons.

4 History

5 3. VRL and SSL are companies incorporated in Jamaica. VRL is in the business of managing hotels. SSL is a hotel operator. SSL leased and operated a hotel known as Sans Souci, which is located near the St. Mary/St. Ann border. In October 1993, SSL contracted VRL to manage the hotel. A dispute arose between the parties because SSL purported to terminate the contract. VRL resisted the termination. It alleged that SSL was acting in breach of the contract. The matter was referred to arbitration in accordance with terms of the contract. The arbitrators found in favour of VRL and made their award accordingly. VRL obtained the order from Reid J referred to in paragraph one.

6 4. The Arbitration Act permits the successful party in the arbitration to utilise the court to enforce his judgment. The advantages are many but the most significant one is that once permission is given, the award can be enforced as if it were a judgment of the Supreme Court. In practical terms, this means that SSL is staring down the wrong end of the enforcement barrel. The award is a hefty JA$370,705,264.40 with interest of $14,731,116.08 added up to the end of September 2004. VRL is now in a position to enforce the award without any further litigation — no claim form, no witness statements and no case management. SSL wants to prevent this from happening or at least delay the pulling of the trigger. I will now deal with SSL's first major point, which is that VRL did not disclose that SSL had filed a legal challenge to the award.

7 The non-disclosure point

8 5. Mr. Shelton contended that the non-disclosure to Reid J that the defendant was challenging the arbitration award is sufficient for the order to be set aside. Mr. Shelton relied on Excomm Ltd. v Ahmed Abdul-Qawi Bamaoadah [1985] 1 Lloyds Rep 403, 411; Citibank N.A. v Offce Towem Ltd and Adela International Flirancing Company S.A. (1979) 16 J .L.R. 502; Jamculture Ltd v Black River Upper Morass (1989) 26 J.L.R. 244. When I had delivered my oral judgment, I had not accepted the point made by Mr. Shelton. However having reread the cases and Excomm Ltd. in particular it does indeed support the point made by Mr. Shelton which is that on an ex parte application, even in one such as this, there is a duty to make full disclosure to the court. Excomm Ltd. was a case in which an application had been made to enforce an arbitration award.

9 6. Having said that, I am of the view that the omission to state to Reid J that the award was being challenged was not a material omission in the context of this case. In the event that I am wrong on this, I consider that discharging the order is not an appropriate remedy in the circumstances of this particular case. Lord Denning M. R. in Middlemiss & Gould (A Firm) v Hartlepool Corporation [1972] 1 W.L.R. 1643 stated that an arbitration award is like a final judgment which should be enforced unless it can be shown to be invalid. Edmund Davies LJ said much the same thing. In that case, the award was not challenged in the required time and so was final and conclusive. To that extent, the case before me is different from Middlemiss' case.

10 7. While I am not ignoring the law relating to full disclosure it does not seem right that I should reverse an order to which, prima facie, the claimant is entitled. The award was arrived after both parties had the opportunity to put forward their respective arguments. At this stage, if there is no prima facie...