Barrack Construction Ltd v National Housing Corporation
| Jurisdiction | Barbados |
| Judge | Holder, M. |
| Judgment Date | 07 February 2018 |
| Neutral Citation | BB 2018 HC 2 |
| Docket Number | CV 1889 of 2006; CV 2111 of 2006 |
| Court | High Court (Barbados) |
| Date | 07 February 2018 |
High Court
Holder, M.
CV 1889 of 2006; CV 2111 of 2006
Mr. Aidan Rogers and Ms. Shelly-ann Seecharan, Attorneys-at-Law for the claimant/judgment Creditor
Mr. Adrian King in association with Ms. Henrietta Bourne-Forde and Ms. Nicole Gibson for the defendant/judgment Debtor
Arbitration Act, CAP. 110, section 23.
Costs - Bill of costs — Interests on costs awarded to attorneys in arbitration matter.
In this matter the claimant/Judgment Creditor is seeking interest on costs granted to its lawyers by the sole arbitrator Sir Denys Williams.
By judgment summons dated 16th August, 2016, amended 26th August, 2016 and further amended on 20th September, 2016 the claimant/Judgment Creditor states:
“On the 7th September, 2016 following the decision of the sole Arbitrator Sir Denys Williams the Judgment Creditor was awarded $34,490,518.00 together with interest on that sum at the rate of 10% per annum from the 25th July, 2002 to the 6th September, 2006 and thereafter at the rate of 8% per annum until payment. Costs in the sum of $6,158,200.00 were also awarded to the claimant, which included the sums of $5,807,250.00 for the legal and consultant team, $350,000.00 representing reimbursement to the claimant one half of the arbitrator's total fee of $700,000.00 and $950.00 for disbursements during the arbitral proceedings.”
It is also stated:
“And as you have only made arrangements for the payment of the arbitral award but failed to pay the sums awarded as costs as ordered, the Judgment Creditor has requested this judgment summons be issued against you.”
The parties entered into a contract for the construction of a five storey office complex at Warrens. Their agreement permitted them to settle disputes by arbitration. A dispute arose and the claimant/Judgment Creditor referred the matter to arbitration. On the 7th September, 2016, the sole arbitrator Sir Denys Williams entered judgment for the claimant/Judgment Creditor.
He stated at pages 23 – 24 of his decision dated 7th September, 2006:
“My award is therefore BDS $34,490.518.00.
Section [23] of the Arbitration Act Cap 110 provides that a sum directed by an award shall, unless the award otherwise directs, carry interest as from the date of the award and at the same rate as a judgment debt.
Section [35] of The Supreme Court of Judicature Act Cap 117 provides that interest on debt or damages may be awarded at a rate not exceeding eight percent.
In the circumstances of this case in which Barrack lawfully terminated its contract at the end of June 2002, the award should bear interest at the rate of ten percent from the date on which the matter was submitted to arbitration until the date of award and thereafter at eight percent per annum until payment.
It must be noted that interest is not to be paid on interest so that interest is not to be paid on any part of the award which comprises interest.”
On 18th July, 2008 the High Court granted leave to the claimant/ Judgment Creditor to enforce the said arbitral award together with costs as an order of the Court.
A bill of costs was submitted to the Registrar of the Supreme Court and on 11th September, 2005 a decision was made as to the amount of costs to be paid to the claimant/Judgment Creditor. There was an application by the defendant/Judgment Debtor for review.
On 3rd February, 2016 the Registrar certified costs for the claimant/Judgment Creditor arising from suits 1889 of 2006 and 2111 of 2006.
The claimant/Judgment Creditor is claiming interest on costs granted to its attorneys on the basis of section 23 of the Arbitration Act Cap 110.
The defendant/Judgment Debtor indicated that efforts were being made to liquidate the debt but objected to the claimant/Judgment Creditor's application for interest on costs awarded to its lawyers.
Mr. King argued that the arbitrator made specific orders with respect to the award, the manner in which interest was to be applied, making specific reference to the Arbitration Act Cap 110. He said that the arbitrator also gave cogent and clear legal reasons how and why interest should not be applied in accordance with the legislation as existed at the time.
He rejected the suggestion that section 23 was authority for the proposition that the costs for the attorneys attracted interest in the same manner as the judgment debt. He submitted that in the circumstances of this case section 23 cannot be read alone because the arbitrator made specific reference to the payment of interest on the arbitral award.
He argued that Part V of the Act, which dealt specifically with costs, fees and interests, set out broad parameters within which the arbitrator could exercise his discretion with respect to orders of costs and fees. He said that the Act made a clear distinction between an arbitral award, costs and fees. He was of the view that section 23 applied only to the arbitral award and not to the fees or costs associated with the arbitration itself.
He also argued that the arbitrator's wide discretion is further buttressed by section 36 of the Act which is included under the Miscellaneous provisions.
Mr. King submitted that section 36 was critical to the analysis and disposition of this matter since the arbitrator made specific orders with respect to the statutory application of interest in the award to the claimant/Judgment Creditor but made no order whatsoever with respect to interest on its attorneys' costs. He felt that if the arbitrator intended to award interest on costs he would have specifically made an order in those terms.
He was of the view that the claimant/Judgment Creditor was not entitled to rely on the direct terms of the arbitrator's decision for payment of interest and where the arbitrator was silent, rely on the provisions of the Act to support its application for interest on costs to its attorneys, when this was clearly contrary to the arbitrator's intention.
He further submitted that section 23 was solely and specifically designed for instances where the arbitrator made no reference whatsoever to interest. He said that if the arbitrator had made no reference to interest the claimant's case for the application of section 23 would have been legitimate.
Mr. King said that section 20 of the Arbitration Act created a statutory mechanism for the issue to have been revisited, resolved and corrected. Under that section the arbitrator was given the power to correct any clerical mistake or error arising from any accidental slip or omission.
In conclusion he emphasized that the claimant must not be allowed to approach the Court ten years after the decision was made to apply for interest on attorneys' costs when that was clearly contrary to the arbitrator's intention.
He felt that the Court was bound to apply section 19 of the Act which provided that unless a contrary intention was expressed, every arbitration agreement shall be deemed to contain a provision that the arbitrator's award was final and binding on the parties.
He urged the Court to reject the claimant's application for interest to be added to the costs of its attorneys and emphasized that interest on costs of its attorneys was not recoverable unless specifically ordered by the arbitrator in his decision on 7th September, 2006. claimant/Judgment Creditor's Submissions
Ms. Seecheran contended that the Judgment Debtor's interpretation of section 23 was not consistent with any reasonable reading of the section, which was very clear. She said that its objection had the effect of introducing ambiguity where none existed. She urged the Court to take a careful note of the words used in section 23.
She argued that they was no legal support for the contention that section 23 only applied to an award proper and not to costs or fees associated therewith. Further that the Judgment Debtor gave no cogent reasons why section 23 should not apply and in any event it “misapplied” section 23.
She said that the Act did not define “award” but that the literature on commercial arbitration spoke of awards of costs, awards of damages and awards generally.
She submitted that section 21 of the Arbitration Act Chapter 110 which conferred the power to award costs made it clear that an order for costs formed part of the award. Section 21.2 referred to “costs directed by an award to be paid.”
She relied on the definition of “award” found in Black's Law Dictionary, 8th edition at page 147 which was
“n. A final judgment or decision especially one by an arbitrator or jury assessing damages. Also term arbitrament.”
She suggested that the Judgment Debtor did not provide any authority for its interpretation of the word “award” and that it advanced a definition which was outside the norm.
She was of the opinion that, within the context of the Act, the word “award” referred to final judgment or decision of the arbitrator and that that was the only reasonable interpretation open to the Court.
She referred to the language used in section 21 (1) (2) and (5) and was of the opinion that it clearly demonstrated that “an award” included costs.
Ms. Seecharam also considered the word “sum”. She said that there was nothing to indicate that it referred only to damages otherwise the draftsman would have said “damages” directed to be paid by an award.
She contended that the Judgment Debtor had misapplied section 36. She agreed that section 36 conferred a discretion with respect to orders for costs. However, she felt that this was merely a reference to the fact that costs were awarded on the same principles which governed an order for costs in the High Court in that the arbitrator had to determine which...
To continue reading
Request your trial