Sir Robert Mcalpine & Sons Ltd v the Attorney General of Barbados

• Jurisdiction: Barbados
• Judge: Williams, J.
• Judgment Date: 10 November 1982
• Neutral Citation: BB 1982 HC 64
• Docket Number: No. 541 of 1982
• Date: 10 November 1982
• Court: High Court (Barbados)

High Court

Williams, J.

No. 541 of 1982

Sir Robert Mcalpine & Sons Ltd

and

The Attorney General of Barbados

Mr. A.H. Clarke, in association with

Mr. D.A.C. Simmons, for the plaintiff

Mr. O. M. Browne, Q.C., in association with

Mr. W. Davis, Deputy Solicitor General, for the defendant

Arbitration - Arbitration clause in construction contract — Whether issues between parties covered by the clause.

Williams, J.

1 On June 5, 1980 a contract was made between the Government of Barbados (hereinafter called “the Employer”) and Sir Robert McAlpine Limited, a company incorporated and registered in the United Kingdom (hereinafter called “the Contractor”) for the construction of a new General Post Office at Cheapside, Bridgetown.

2 Work on the new Post Office was duly commenced but on April 28, 1982 the Contractor ceased work over non-payment in respect of interim Certificate No. 28. On July 13, 1982 the Contractor commenced an action against the Employer claiming:

1

A declaration that by its letter dated April 28, 1982 the Contractor validly determined its employment under clause 26(1) of the Agreement; 2. An order for payment by the Employer to the Contractor of all such sums as are or may be properly due to the Contractor under the provisions of Clause 26 of the Agreement; 3. $191,394.25 due by certificate 29, No. 0540218 dated April 23, 1982 and unpaid by the Employer; 4. Damages and interest thereon at such rate and for such period as the court deems just; 5. Further and other relief; 6. Costs.

3 On August 9, 1982 the Employer took out a summons seeking an order –

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That all further proceedings in the action be stayed pursuant to Section 6 of the Arbitration Act Cap. 110 and all other powers thereunto enabling, the Contractor and the Employer having by the Agreement of June 5, 1980 agreed to refer to arbitration all matters in respect of which the action is brought; and 2. That the Contractor pay to the Employer its costs of and occasioned by the action including the costs of this application. Section 6 of the Arbitration Act Cap. 110 enacts as follows: “6. Where any party to an arbitration agreement, or any person claiming through or under him, commences any legal proceedings in any Court against any other party to the agreement, or any person claiming through or under him, in respect of any matter agreed to be referred, any party to those legal proceedings may at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the court to stay the proceedings, and that Court, or a Judge thereof, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the agreement, and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.”

4 Condition 35(1) of the Conditions of the contract provides:–

“(1) Provided always that in case any dispute or difference shall arise between the Employer or the Architect on his behalf and the Contractor, either during the progress or after the completion or abandonment of the works as to the construction of this Contract or as to any matter or thing of whatsoever nature arising thereunder or in connection therewith (including any matter or thing left by this Contract to the discretion of the Architect or the withholding by the Architect of any certificate to which the Contractor may claim to be entitled or the measurement and valuation mentioned in clause 30(5)(a) of these Conditions or the rights and liabilities of the parties under clauses 25, 26, 32 or 33 of these Conditions), then such dispute or difference shall be and is hereby referred to the arbitration and final decision of a person to be agreed between the parties, or, failing agreement within fourteen days after either party has given to the other a written request to concur in the appointment of an Arbitrator, a person to be appointed on the request of either party by the President or a Vice-President for the time being of the Barbados Society of Architects.”

5 The Employer's contention is that these proceedings should be stayed pursuant to this condition of the Contract.

6 Before proceeding further, it should be noted that on April 30, 1980 the Employer had made an ex parte application to the High Court for the purpose of restraining the Contractor from doing anything to cause or procure a breach of the contract or from entering on the Crown's lands at Cheapside and removing from the site temporary buildings, plant, tools, equipment, goods and materials. The relief was granted in the terms sought by the Employer but the injunction was dissolved by a Consent Order of the court on July 9, 1982. This application by the Employer for interlocutory relief will again be referred to in relation to one of the matters put forward by Counsel for the Contractor as a ground on which a stay of these proceedings should be refused.

7 The following statement appears at Russell on Arbitration, 17th Edition, at page 80:

“Principles on which the discretion is exercised: where the parties have agreed to refer a dispute to arbitration, and one of them, notwithstanding that agreement, commences an action to have the dispute determined by the court, the prima facie leaving of the court is to stay the action and leave the plaintiff to the Tribunal to which he has agreed… Once the party moving for a stay has shown that the dispute is within a valid and subsisting arbitration clause, the burden of showing cause why effect should not be given to the agreement to submit, is upon the party opposing the application to stay.”

8 This statement of the law is not contested by either side and Counsel for the Employer points out that clause 35(1) of the Conditions provides for the reference to arbitration of any dispute or difference “as to the construction of the contract or as to any matter or thing of whatsoever nature arising thereunder or in connection therewith (including the rights and liabilities of the parties under clauses 25 and 26..of these Conditions). The Employer's case is that:

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These proceedings are in respect of a matter agreed to be referred to arbitration by clause 35(1) of the Conditions; 2. The Employer has not taken any steps in the proceedings apart from acknowledging service; and 3. The Employer was at all times ready and willing to do all things necessary to the conduct of the arbitration.

9 Counsel for the Contractor concedes that the Employer has not taken any steps in these proceedings apart from acknowledging service, but takes issue with the other grounds on which the Employer relies for the purpose of having the proceedings stayed.

10 It is convenient at this point to refer to the clauses of the Conditions which are relevant to the issues raised.

11 Clause 30(1) provides, inter alia:

“(1) Interim valuations shall be made whenever the Architect considers them necessary for the purpose of ascertaining the amount to be stated as due in an interim certificate. The Architect shall from time to time as provided in this sub-clause issue Interim Certificates stating the amount due to the Contractor from the Employer and the Contractor shall be entitled to payment thereof within 14 days from the presentation of the certificate…”

12 Clause 26 is as follows:

• “(1) Without prejudice to any other rights and remedies which the Contractor may possess, if –

  • (a) the Employer does not pay to the Contractor the amount due on any certificate within 14 days from the presentation of that certificate and continues such default for seven days after receipt by registered post or recorded delivery of a notice from the Contractor stating that notice of determination under this condition will be served if payment is not made within seven days from receipt thereof;

  • (b)………..

  • (c)………..

then the Contractor may thereafter by notice by registered post or recorded delivery to the Employer or Architect forthwith determine the employment of the Contractor under this Contract; provided that such notice shall not be given unreasonably or vexatiously.

• (2) Upon such determination, then without prejudice to the accrued rights or remedies of either party or to any liability of the classes mentioned in clause 18 of these Conditions which may accrue either before the Contractor or any Sub-Contractor shall have removed his temporary buildings, plant, tools, equipment, goods or materials or by reason of his or their so removing the same, the respective rights and liabilities of the Contractor and the Employer shall be as follows, that is to say:

  • (a) The Contractor shall with all reasonable despatch and in such manner and with such precautions as will prevent injury, death or damage of the classes in respect of which before the date of determination he was liable to indemnify the Employer under clause 18 of these Conditions remove from the site all his temporary buildings, plant, tools, equipment, goods and materials and shall give facilities for his sub-contractors to do the same, but subject always to the provisions of sub paragraph (iv) of paragraph (b) of this sub-clause;

  • (b) After taking into account amounts previously paid under this Contract, the Contractor shall be paid by the Employer:

    • i. the total value of work completed at the date of determination;

    • ii. the total value of work begun and executed but not completed at the date of determination, the value being ascertained in accordance with clause 11(4) of these Conditions as if such work was a variation required by the Architect;

    • iii. Any sum ascertained in respect of a direct loss and/or expense under clause 11(6), 24 and 34(3) of these Conditions (whether ascertained before or after the date of determination);

    • iv. The cost...