Irish Courts Provide Guidance On Arbitration Disputes

Some recent court decisions provide valuable guidance to the construction sector in Ireland on the principles that apply when the requirement to arbitrate is at issue, as well as giving the courts an opportunity to re-confirm their support for the arbitral process.

Facts: In XPL Engineering v K&J Townmore Construction Ltd [2019] IEHC 665 K&J Townmore Construction Ltd (the "contractor") engaged XPL Engineering (the "sub-contractor") to provide mechanical works on projects under two contracts. Differences arose between the parties and the sub-contractor issued court proceedings to recover sums claimed. The contractor responded that the contracts required that disputes go to arbitration. Four years later, the sub-contractor issued summary proceedings to recover the sums it claimed. While the sub-contractor agreed that parts of the dispute could go to adjudication, it wanted to obtain summary judgment for the remainder of the claim where it said there was no dispute because the contractor had acknowledged that certain works were done.

Legal framework: There is an obligation on a court, where there is an arbitration agreement, to refer the dispute between the parties to arbitration if one of the parties so requests. This obligation is in Article 8(1) of the UNCITRAL Model Law of International Commercial Arbitration, incorporated into Irish law by the Arbitration Act 2010.

Decision: There were two key questions for the court. Firstly, were the mandatory conditions in Article 8(1) met? Secondly, was there a dispute for the purpose of Article 8(1) and the arbitration clauses in the contracts? It would have been preferable for the sub-contractor in this scenario to obtain a summary judgment from the court of the amount it claimed, rather than having to run the...