TRINIDAD AND TOBAGO
IN THE HIGH COURT OF JUSTICE
H.C.A. No. Cv. 1541 of 2002
ICS (GRENADA) LIMITED APPLICANT
NH INTERNATIONAL (CARIBBEAN) LIMITED RESPONDENT
BEFORE THE HONOURABLE MR. JUSTICE P. JAMADAR
Mr. C. Phelps and Mr. J. Phelps for the Applicant.
Mr. A. Fitzpatrick S. C. and Mrs. J. Byrne for the Respondent.
In June 1997 the Applicant, ICS (Grenada) Limited [ICS], engaged the
Respondent, NH International (Caribbean) Limited [NHIC], to construct a
National Stadium at Queen’s Park in the Island of Grenada. By that
agreement, it was specified that the Contract Price would be for a lumpsum of
EC $43,502,812.00 and the Contract Period was for twenty- nine (29) months,
commencing on the 1st June, 1997 with completion due on the 31st November,
1999. This agreement also specified that the standard FIDIC Conditions of
Contract (Parts I and II, 4th ed.) were to be used for the execution of the
agreed works. The formal agreement was executed by both parties on the 6th
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The FIDIC Conditions provide for arbitration of any disputes between the
parties pursuant to the International Chamber of Commerce [ICC] Arbitration
In or about October, 1999 a dispute arose between the parties with respect to
the performance of the subject contract. On the 29th October, 1999 ICS by
letter of even date purported to terminate NHIC’s employment, allegedly
because of NHIC’s failure to comply with certain instructions given by the
Engineer and contained in two (2) letters written on the 27th September, 1999
and the 30th September, 1999. NHIC cha llenged this decision to terminate its
NHIC then initiated arbitration proceedings in February, 2000. This was
resisted by ICS. However, on the 20th April, 2000 the ICC determined that the
dispute between the parties would proceed to arbitration and be submitted to a
sole arbitrator. In May, 2000 Doak Bishop was appointed arbitrator. From
March, 2001 through to September, 2001 evidentiary hearings took place. On
the 18th March, 2002 the Final Award of the arbitrator was rendered. On the
21st March, 2002 Notification of the Final Award was given by the ICC
International Court of Arbitration (the Final Award having been approved by
the ICC Court on the 14th March, 2002). On the 6th May, 2002 ICS filed the
instant Notice of Motion seeking to have the said award set aside and/or
remitted pursuant to sections 18 and 19 of the Arbitration Act (No. 5 of 1939)
and/or pursuant to the inherent jurisdiction of the Court.
The Applicant’s challenge to the award is mainly on two fronts:
i. that the arbitrator misconducted himself (in the sense of ‘technical
misconduct’) and/or acted in excess of jurisdiction; and
ii. that there are errors on the face of the award.
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Under ‘error on the face of the award’ several alleged errors have been
suggested. However, under the first ground, the challenge is directed mainly
to the arbitrator’s review of the instructions given by the Engineer on the 27th
September, 1999 and the 30th September, 1999. The Applicant contends that
no such issue was referred to the arbitrator (under the Terms of Reference).
The Respondent for its part contends, with respect to the challenge on the
ground of errors on the face of the award, that first, there is no jurisdiction to
do so and second, in any event, there have been no demonstrated errors
(according to the principles that are applicable when a court is exercising its
supervisory jurisdiction) in this case. With respect to the misconduct and
excess of jurisdiction arguments raised, the Respondent contends that the
issues related to the disputed instructions were specifically referred to the
arbitrator under the Terms of Reference. Therefore the arbitrator had the
authority and duty to consider and resolve those issues.
In addition the Respondent raises a point of jurisdiction, arguing that Article
28 (6) of the ICC Rules prevents the Applicant from pursuing the instant
Motion in relation to the award. It is contended that Article 28(6) ousts the
jurisdiction of the court to supervise and review the award, in so far as the
challenge is based on an error of fact or law or technical misconduct of the
type raised in this case.
The Respondent has also raised an issue concerning who is the proper party to
hold the Bond for security of costs ordered in this case. It is contended that
the bond should be given (handed over) to the Respondent’s attorneys.
STRUCTURE OF JUDGMENT
This judgment is organised as follows:
i. General principles.
ii. Excess of jurisdiction/‘Technical misconduct.’
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iii. Errors on the face of the Award/Misconduct.
v. Possession of the Bond.
The Arbitration Act, No. 5 of 1939 (Trinidad and Tobago) is, in so far as it is
relevant to this case, similar to the 1889 UK Act. In particular, sections 1, 2,
10 and 11 of the UK legislation correspond to sections 3, 4, 18 and 19 of the
local legislatio n. The differences that exist between these four sections in the
1889 UK Act and the local Act are of no material significance to this case.
This is agreed.
Power to Set Aside
The courts in Trinidad and Tobago have the power to set aside an award based
on either a statutory and/or the inherent jurisdiction. Thus, under section
19(2) of the local Act [see, section 11(2) of the 1889 UK Act and section 15
of the 1934 UK Act] the court has a statutory jurisdiction to set aside an award
where an arbitrator has misconducted himself or the proceedings or where an
arbitration or award has been improperly procured.
However, the court also has an inherent jurisdiction to set aside an award
i. subject to an error on the face of the award;
ii. wholly or in part in excess of jurisdiction; or
iii. subject to a patent substantive defect.
It would appear that this inherent jurisdiction could also be exercised where
there was an admitted mistake.
The inherent power of the court to set aside an award was given statutory
recognition by section 3 of the local Act (section 1 of the 1889 UK act). The
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situation is well summarised in Commercial Arbitration by Mustill and Boyd
(1989 ed.) at page 447, where the authors state:
As regards the inherent powers of the Court, section 1 of the
1889 Act provided that all submissions should, unless a
contrary intention was expressed thereon, take effect as if they
had been made an order of court. The effect was thus to bring
virtually all references under the direct and continuous
supervision of the Court, which would exercise powers by
virtue of its own inherent right of control, quite distinct from
the statutory powers to intervene by setting aside and
Thus, all voluntary references to arbitration attracted the court’s inherent
powers of enforcement and supervision. The decision in Czarnikow v Roth
(1922) 2 K.B. 478 is generally cited as an authority for the proposition that it
is contrary to public policy for parties to attempt to oust the jurisdiction of the
court, by purporting to contract out of same. Any such clause or term in an
arbitration contract was often considered to be invalid. In England the
statutory recognition of the court’s supervisory power over all awards changed
when the 1950 UK Act repealed, inter alia, section 1 of their 1889 Act.
Power to Remit
The courts in Trinidad and Tobago have the statutory jurisdiction t remit
awards pursuant to section 18 of the local Act (see, section 10(1) UK). On the
face if it the discretion appears unlimited, but through process of judicial
interpretation this discretion has been circumscribed. In 1889, the Court of
Appeal in England stated the four grounds upon which a matter could be
remitted to an arbitrator for reconsideration. These are where:
i. the award was bad on the face of it;
ii. there was misconduct on the part of the arbitrator;
iii. there had been an admitted mistake by the arbitrator; or
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iv. fresh evidence had been discovered after the making of the award.
Subsequently, these categories were extended to include certain situations
which related to awards stated in the form of a special case and where there
had been “a misunderstanding leading to an injustice.” However, these
extended categories are of no relevance to the instant matter and will not be
dealt with (for a fuller discussion, see Commercial Arbitration, supra, at pages
Unlike the jurisdic tion to set aside, the court has no inherent jurisdiction to
remit an award.
From the above, it is clear that there are several areas of overlap in the
grounds upon which a court may either remit and/or set aside an award.
In this case the challenge to the award is stated as being on the following
grounds (see page 4 of the Applicant’s skeleton submissions):
i. excess of jurisdiction;
ii. errors on the face of the award; and
In the circumstances the Applicant seeks either remission and/or setting aside
of the award (or a part thereof) as the court in its discretion may think fit.
EXCESS OF JURISDICTION/‘TECHNICAL MISCONDUCT’
i. The Issue
What is alleged is that the arbitrator failed to comply with the Terms of
Reference (the Arbitration Agreement), in particular by purporting to decide a
matter which was not in fact included in the reference (see pages 4-5 of
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The Applicant’s contention is that “no where in the Terms of Reference were
the instructions of the Engineer dated the 30th September, 1999 to remove and
reconstruct the athletics track and the instructions dated the 27th September,
1999 to remove and relay the sewer lines referred to the Arbitrator. …
Nevertheless, the Arbitrator proceeded to treat with these instructions and
addressed them as the only basis for finding the termination wrongful and
indeed as the only basis for his entire award” (pages 5 and 6 of the skeleton
This ‘misconduct’ on the part of the arbitrator is compounded, it is argued, not
only because the issue was never referred to the arbitrator, but also because,
from the Terms of Reference, the Respondent had clearly stated that it was
complying with the subject instructions. Therefore, it is also argued, the
validity of the instructions had been admitted by the Respondent.
In these circumstances, the Applicant contended that the arbitrator acted in
excess of jurisdiction and misconducted the proceedings.
I accept that if what is alleged is proven it will amo unt to an excess of
jurisdiction and ‘technical misconduct.’ Also, that in the circumstances of this
case, because this issue is so fundamental to the resolution of many of the
other issues in the entire award, remission is not an appropriate remedy,
whereas setting aside the award is.
However, I do not accept the Applicant’s submissions on this point. In my
opinion the issues about the instructions addressed by the arbitrator in the
award were clearly and specifically put before the him by the parties (in
particular by NHIC) for consideration and resolution.
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ii. The Terms of Reference
To determine what were the disputes and issues for determination placed
before the arbitrator one must look at the Terms of Reference.
The Terms of Reference were divided into nine (9) chapters as follows:
Chapter I - Parties to the Dispute.
Chapter II - Name and address of the Arbitrator.
Chapter III - Summary of the Disputes
Divided into two (2) sections:
a. Claims by NHIC.
b. Claims by ICS.
Chapter IV - List of Issues to be Determined.
Divided into two (2) sections:
a. NHIC’s issues.
b. ICS’s issues.
Chapter V - Relief Sought.
Divided into two (2) sections:
a. Relief sought by NHIC.
b. Relief sought by ICS.
Chapter VI - Place of Arbitration.
Chapter VII - Applicable Procedural Rules.
Chapter VIII - Applicable Law.
Chapter IX - Arbitral Jurisdiction.
Under chapter nine, arbitral jurisdiction, it was agreed ‘that all disputes and
issues referred to herein are properly before the Arbitrator and may be decided
by him.” Further, that: “The Arbitrator’s jurisdiction derives from Article
67.3 of the FIDIC Conditions.” The clause then went on to state the first three
paragraphs of Article 67.3 as follows:
Any dispute in respect of which:
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a. the decision, if any, of the Engineer has not become final
and binding pursuant to Sub-Clause 76.1, and
b. amicable settlement has not been reached within the period
stated in Sub-Clause 67.2,
shall be finally settled, unless otherwise specified in the
Contract, under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by one or more arbitrators
appointed under such Rules. The said arbitrator/s shall have
full power to open up, review and revise any decision, opinion,
instruction, determination, certificate or valuation of the
Engineer related to the dispute…
In my opinion, of significance in the above are the following. First, the
reference to “all of the disputes and issues referred to herein” must be
interpreted as meaning that the arbitrator was mandated to resolve all the
disputes identified in chapter three as well as all the issues identified in
chapter four. Second, in doing so: “The said Arbitrator shall have full power
to open up, review and revise any decision, opinion, instruction,
determination, certificate or valuation of the Engineer related to” any of the
disputes or issues referred pursuant to the said chapters three and four of the
Terms of Reference.
iii. The Disputes of NHIC
Following is an extracted summary of the disputes stated by NHIC that are
relevant to the issue under consideration. It is to be noted that this chapter is
written in prose form with no clear attempt to either categorize or itemize any
particular dispute(s). In fact the introductory text states: “The disputes
between the parties and the claims being made by each are summarized
below.” [Prior to the hearing before the arbitrator points of pleading were
settled by each party, but these have not been put before the court].
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i. “NHIC complained that an independent Engineer had not been
ii. Without consultation ICS appointed R. Nurse an Engineer, “but ICS
failed to say that Mr. Nurse was merely a sub-consultant to ICS.”
iii. “Disputes arose as the work progressed and NHIC was dissatisfied
with the decisions made by Mr. R. Nurse. It became clear in due
course that Mr. Nurse was being directed and/or manipulated by ICS
contrary to the requirements of the FIDIC Conditions that require the
Engineer to act impartially and independently of the Employer.”
iv. “In consequence of the improper appointment of the Engineer and his
manipulation by ICS, many of the final decisions he gave were made
in favour of ICS and these have subsequently been referred to
arbitration. We request the Arbitrator to determine that an
independent Engineer was never properly appointed to this project and
that in consequence, all decisions the Engineer made must be subject
v. On the 29th October, 1999 ICS gave fourteen days notice of its
intention to terminate the contract under clause 63.1 for various
reasons set out in its letter of even date.
vi. “Being Dissatisfied with the final decision of the Engineer in regard of
those issues on which he had ruled, and the Engineer having failed to
address the remaining issues as outlined in NHIC’s letter of the 22nd
September, 1999 …, NHIC gave notice by letter to ICS dated 22nd
December, 1999 of NHIC’s intention to commence arbitration
vii. “By letter dated 9th November, 1999, NHIC advised ICS that the
purported termination was wrongful, unjustified, based on spurious
grounds, and not accompanied by the requisite Engineer’s Certificate.
NHIC notified ICS, however, that ICS repudiation of the contract
would be accepted and that NHIC would take the necessary steps to
refer matters to arbitration.”
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viii. “By letter dated 7th January, 2000 NHIC referred various other matters
to the Engineer, including issues in regard to faulty design, non-award
of a proper extension of time for completion of the works, under-
certification of the value of works executed …, purported termination
of the Contract without proper cause. …”
ix. “In his letter dated 28th March, 2000 the Engineer gave Final
Decisions … in regard to all additional issues that had been raised by
NHIC on 7th January, 2000. By letter to ICS dated 11th April, 2000,
NHIC advised that it was dissatisfied with the decisions of the
Engineer and gave formal notice of its intention to commence
arbitration on these issues as well as those previously referred.”
iv. The Disputes of ICS
In this chapter, under ‘Claims by ICS’, the following extracted summary is
relevant to the instant issue:
i. “In September, 1999, the Engineer wrote NHIC in accordance with clause
39.1 of FIDIC Conditions and Instructed it to remove and re-execute: i. the
main sewer line and ii. the earth fill foundation and kerbs to the athletics
tracks, all of which were seriously defective. NHIC did not comply.”
ii. “In October 1999, the Engineer advised ICS that NHIC had failed to
follow its instructions given in accordance with Clause 39.1. Under
FIDIC Conditions, this was grounds for termination of the Contract.”
iii. “Because of NHIC’s failure to comply with the Engineer’s instructions, its
lack of progress, its refusal to accept responsibility for its poor
workmanship… ICS exercised its right to terminate NHIC’s contract in
accordance with the conditions of the contract and/or under the common
From these extracted summaries of the disputes stated by the parties the
following are, in my opinion, indisputable:
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i. NHIC was disputing the Engineer’s independence and calling for a review
of all decisions made by the Engineer as may be relevant.
ii. NHIC was contending that the termination of the contract by ICS was
wrongful for several reasons, including, that there was no justification for
it, it was based on spurious grounds and it was not accompanied by the
requisite Certificate. Clearly the first two reasons point to substantive
issues while the third points to a procedural issue.
iii. NHIC was also contending that the Engineer’s decision on issues
regarding faulty design with respect to the sewer line and/or the athletics
track generally and in the context of termination were wrong and were
disputes to be resolved by the arbitrator.
iv. ICS was, on the other hand, contending that the Engineer’s instructions in
September 1999 with respect to the sewer line and the athletics track were
in accordance with clause 39.1 of the FIDIC Conditions and that the
defects in same were as a result of fault by NHIC.
v. ICS was contending therefore, that it was justified in October, 1999 in
terminating the contract because of NHIC’s failure to follow the said
instructions of the Engineer with respect to the sewer line and the athletics
In light of the above, and given that few of the documents referred to in the
summary of disputes and none of the points of pleading are before the Court, I
am satisfied that from the disputes stated by both NHIC and ICS, the arbitrator
was on a balance of probabilities called upon to resolve, inter alia, the
i. Whether the Engineer was independent and/or impartial as required by the
ii. If not, whether or not the relevant Engineer’s decisions should be
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iii. Whether the alleged ‘defects’ in the work done with respect to the sewer
line and/or the athletics track was as a result of poor workmanship etc. by
NHIC or because of faulty design supplied by ICS.
iv. Whether, in light of (iii) above, the termination of the contract based on
NHIC’s non compliance with the Engineer’s said instructions was justified
and whether it was based on spurious grounds.
v. Whether, in light of all of the above and given the jurisdiction “to open up,
review and revise any decision, opinion, instruction, determination” of the
Engineer, ICS was justified in October, 1999 in terminating the contract as
it did because of NHIC’s failure to comply with the Engineer’s
instructions with respect to the sewer line and/or the athletics track, which
were purportedly given pursuant to clause 39.1 of the FIDIC Conditions.
v. The Issues of NHIC
As pointed out, the Arbitrator was called upon to decide “all disputes and
issues referred to” in the Terms of Reference. Having considered the disputes
raised in the Terms of Reference, the issues stated therein will now be
Chapter four dealt with the ‘List of Issues to be Determined.” One must
assume that these issues together with the disputes identified were to be
determined by the Arbitrator. Noteworthy, is that the preface to this chapter
states: “any other issues necessary to a determination of the listed issues may
also be decided.” Thus, there was an enlarged jurisdiction given to the
arbitrator, limited only by relevance and necessity.
NHIC’s issues were placed in five categories. These were:
i. Design and Workmanship Issues.
ii. Extension of Time for Completion/Acceleration Issues.
iii. Measurement, Valuation and Certification Issues.
iv. Contractual Issues.
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v. Legal/Consequential Issues.
Under design and workmanship issues NHIC specifically raised the issue of
the dispute over the ‘cause of defects’ in the sewer line and the athletics track
and blamed the specifications and designs for both, alleging that neither took
into account the ‘poor ground conditions’ (see paragraphs 1.13 and 1.14).
Also, under the second category, NHIC specifically claimed that ‘the Contract
was not properly terminated but repudiated’ (see paragraph 2.5). And, in
category four, contractual issues, NHIC stated as an issue the failure by ICS to
appoint an independent Engineer and specifically requested: “the Arbitrator to
determine that an independent Engineer was never properly appointed … and
that in consequence, all decisions the Engineer made must be subject to
review.” Finally, under category five, legal issues, NHIC challenged the issue
of ‘a formal termination notice under clause 63.1 of the FIDIC Conditions’
and contended that “the validity of this notice is in dispute.”
In the context of the above legal issue raised by NHIC the Applicant argued
a. NHIC admitted and accepted the validity of the instructions, and
b. No issue of wrongful termination based on defective instructions was
before the arbitrator.
In my opinion, apart from what I have already stated were the disputes and
issues before the arbitrator for determination, I think this argument of the
Applicant is flawed for the following reasons. First, the issues raised in
category five are all legal challenges to the formal validity of the termination
notice. That is, the issues raised in this section deal with non-compliance of
terms and conditions of specific provisions in the contract.
Second, paragraph 5.2.1 does not say that NHIC accepted the validity of the
Engineer’s instructions. It disputes the claim that NHIC “failed to comply
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with the instructions received,” a necessary prerequisite for invoking the
Employer’s entitlements under either clause 39.2 (to employ and pay other
persons to carry out the disputed work and to recover the costs of same from
the Contractor) or clause 63.1 (to terminate the contract for failure to comply
with an instruction issued pursuant to clause 39.1, as was done by ICS).
Third, and in any event, the challenge to termination under sub-clause 5.2 was
not exclusive. That is to say, the arbitrator was not limited to inquiring into
and determining the validity of the instructions and/or the purported
termination by ICS by reason of the issue(s) formulated at sub-clause 5. In
fact, as I have attempted to demonstrate above, the arbitrator was quite clearly
called upon to determine the factual dispute/issue of whether there was any
basis for the subject instructions and/or termination.
Chapter five of the Terms of Reference dealt with Relief. Noteworthy is that
by paragraph 1(d) NHIC sought: Damages arising from the purported
termination of the contract including:
i. all directly attributable loss and expense,
ii. loss of profit in the remaining works, and
iii. loss of use of equipment, depreciation and damage.
From the relief sought it is evident that NHIC was contending that the
purported termination was without basis, and that the same amounted to a
repudiation of the contract. Thus the damages claimed. In this regard see
Hudson’s Building and Engineering Contracts, 10th ed. (1970), at page 708.
In this case, not only was the contract purportedly terminated, but the
Contractor was also evicted from the site. Furthermore, the Contractor was
deprived of the use of its plant and equipment by the Employer (ICS). See
also in this regard, Hudson’s supra at page 710, under the caption: “Remedies
for Wrongful Forfeiture.” In a case such as this, the measure of damages may
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be according to both the terms of the contract (see Chitty on Contracts, 25th
ed., Vol. 1 (1983) at page 514 paragraph 977) and at common law (which
could therefore include loss of profits that would have been earned if the
Contractor had been allowed to complete the work).
vii. Approach of the Arbitrator
In this award what the arbitrator determined that the cause of the defective
work with respect to both the sewer line and the athletics track was more
likely than not because of poor soil conditions and therefore attributable to
flawed design and specifications (the responsibility of ICS) and not because of
poor workmanship by NHIS (as alleged by ICS). This factual issue was
therefore resolved in favour of NHIC. See paragraphs 184, 185, 186-204 and
205 – 258 and 259 of the award (the underlined paragraphs contain the
effective findings and conclusions of the arbitrator).
The consequence of the above determination was that the instructions given
by the Engineer pursuant to Clause 39 were flawed. This because, the
‘defective’ work on the sewer line and the athletics track were found to be
neither the result of poor workmanship by NHIC nor because if any design for
which NHIC was responsible. In these circumstances, the conclusion arrived
at by the arbitrator was that termination by ICS pursuant to clause 63.1 was
unjustified since it was effected on the basis of the legitimacy of the said
instructions. See in this regard paragraphs 171, 172 to 182, 183, 184 and 185
(the underlined paragraphs contain the effective findings and conclusions of
In my opinion the above determinations were open to the arbitrator and quite
properly pursued by him given the disputes and issues placed before him in
the Terms of Reference.
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viii. Paragraphs 169 and 170 of the award
Though what is stated above is sufficient to determine this issue against the
Applicant, one final aspect should be addressed. The Applicant contended
that the arbitrator having concluded at paragraph 169 that there was no breach
of contract by reason of the issue of the certificate by the Engineer, fell into
error when at paragraph 170 he then decided to undertake the inquiry into
whether the Engineer’s decisions were substantively correct.
The flaw in this argument is, in my opinion, quite obvious when one
understands the context in which paragraph 169 appears. Paragraph 169 is the
concluding paragraph of part G of the award entitled: ‘The Engineer and
Termination: FIDIC Conditions.’ Clearly this aspect of the award dealt with
the dispute/issue raised by NHIC about the lack of independence of the
Engineer and the need to revisit and review the Engineer’s decisions,
instructions etc. (see paragraphs 157, 158, 162, 163, 164 and 166 of the
award). The arbitrator concluded that the FIDIC Conditions required an
impartial engineer approved by both the Employer and the Contractor. And,
since the Engineer for the entire duration of the contract was an agent of ICS,
the Employer, the Engineer ‘certainly cannot be considered as independent or
impartial.’ The arbitrator thus concluded: ‘In this case, the Engineer was
clearly not independent or impartial.’
Yet, despite this, the arbitrator concluded that because ‘this situation (was)
accepted by the Contractor … by continuing to work’ the Engineer ‘was
entitled to issue a certificate of non-performance by NHIC upon which ICS
could rely to terminate the Contractor.’ That is to say, the arbitrator
concluded, as he summarized at paragraph 169:
This means that the mere issuance of the certificate … and
reliance upon it by the Employer in terminating the Contractor
… were not breaches of contract simply by virtue of who
issued the certificate.
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This conclusion by the arbitrator was simply, that in the circumstances of this
contract, there was no procedural impropriety in either the issuance of the
certificate by the Engineer or the reliance upon it by ICS to terminate the
contract by reason of the fact that it was issued by an engineer who was
neither independent nor impartial.
However, what is clear is that paragraph 169 did not attempt to determine
substantively whe ther or not the Engineer’s decisions were correct (as the
arbitrator stated at paragraph 170).
The conclusion, that there was no technical misconduct or decision in excess
of jurisdiction as contended by the Applicant, not only determines this
particular issue, but several others. This because, the grounds stated at (a),
(b), (c), (d), (f), (g) and (h) all directly depend, for their success, on a finding
in favour of the Applicant on the instant issue, and the grounds stated at (n),
(v), (y) and (z) also depend presumptively on the same. For these reasons, all
of the stated grounds will also fail with the resolution of the instant issue.
ERRORS ON THE FACE OF THE AWARD/MISCONDUCT
As Mustill (supra at page 553) points out, the jurisdiction to set aside or remit
an award on the grounds of errors of law or fact on the face of the award “was
in practice rarely exercised or even invoked: arbitrators could and did, shield
their awards from attack by ensuring that the process of legal reasoning by
which they had reached a decision was not referred to in the award.” This
result occurs because an error of law or fact must appear on the face of the
award or in some document incorporated into the award (as opposed to merely
referred t in the narrative of the award). See in this regard, Holgate v
Killick 158 ER 536 (Nov. 9th 1861) at 538; Champsey Bhara v Jivraj
Balboo (1923) AC 480 at 486-487; John Gill Contractors v Bromley
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Trading (1936) TLR 457 at 453; and Moran v Lloyds (1983) 1 LLR 472 at
It should be noted however, that in cases where a contract prescribes a
particular remedy which is available in the event of a breach, if an arbitrator
mistakenly awards a remedy other than the one prescribed by the contract, he
acts in excess of jurisdiction (even though there may also be an error on the
face of the award). Such a result may lead to the setting aside of the award.
See in this regard, Mustill (supra) at page 554.
Misconduct is generally a ‘mishandling of the arbitration as is likely to
amount to some substantial miscarriage of justice’ (see, Halsbury’s Laws of
England, 4th ed. Vol. 2 page 402, paragraph 684). One must often look to the
terms of reference, surrounding circumstances and the conduct of the
arbitrator to determine if there has been misconduct (see, Halsbury’s supra,
and Mustill, supra, at pages 550-553). The following general proposition is
relevant to this case. It is misconduct where an arbitrator fails to comply with
the terms of an arbitration agreement, including a failure to decide all matters
submitted or to decide matters not in fact included (described hereinabove as
ii. Excess of Jurisdiction/Wrong Remedy
In addition to the issue of excess of jurisdiction addressed before, the
Applicant has also raised the following issue which falls under either error on
the face of the award or excess of jurisdiction as explained above. In such a
case: ‘when deciding whe ther there has been an excess of jurisdiction, the
Court is not limited to the matters which appear on the face of the award. The
scope of the disputes submitted to arbitration may be proved by extrinsic
evidence’ – Mustill (supra) at page 555. And where, as here, the assertion is
that the arbitrator has acted in excess of an admitted jurisdiction, ‘it is for the
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party asserting the invalidity to prove it’ (Mustill, supra at page 555). The
burden of proof in this case was therefore on the Applicant.
What the Applicant argued was that if the arbitrator concluded that the defects
in the sewer line and the athletics track were not due to poor workmanship but
to poor soil conditions and flawed designs and specifications, then the correct
remedy to be prescribed was that provided by the contract. And therefore, the
Applicant contends, the only remedy open to the arbitrator was the granting of
an extension of time and the payment of costs to the Contractor (referring to
clause 12.2 of the contract). To state this proposition is to recognize its
fallacy. The arbitrator was dealing with a contract that had either been
terminated with due cause or repudiated; and one in which the disputed works
had been corrected and completed by another party hired by the Employer.
Thus, on the facts there was no question of ‘extending the time’ for the
Contractor to complete the disputed works or for making a consequential
order for costs.
In my opinion there has been no demonstrated error on the face of the award
or excess of jurisdiction on this point. It was within the jurisdiction of the
arbitrator to determine whether the contract was properly terminated or
repudiated. Having concluded that it was repudiated by ICS, then the method
of assessing damages that the arbitrator applied was not flawed given the
relief sought by NHIC (see paragraph 1 (d) under Chapter 5 A of the Terms of
The result is that all the challenges by the Applicant on the basis that the
arbitrator acted in excess of jurisdiction and/or that there is an error on the
face of the award, brought about when he failed to apply the relevant
provisions of the contract (namely clauses 11.1. 12.1 and 12.2), having
concluded that the defects is the sewer line and the athletics track were the
result of errors in design, fail.
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iii. Grounds (a) and (b)
In so far as grounds (a) and (b) of the Applicant’s motion assert error on the
face of the award, it is clear that the arbitrator did not set out any relevant
legal propositions in the award.
There was no proven error of fact, as the arbitrator was entitled to consider the
stated evidence to determine the validity of the Engineer’s instructions and the
There was no misconduct because the arbitrator was acting within the ambit of
the Terms of Reference.
iv. Ground (c)
This ground relies on clauses 11.1 and 12.2 of the contract, which I have dealt
with above in the context of excess of jurisdiction. In so far as misconduct by
reason of a failure to adjudicate properly or at all upon the express provisions
of the contract is relied on, the position is the same. That is, it is quite clear
and accepted that the design of the sewer line and the athletics track were the
responsibility of ICS [see clause 20.4 (g)] and that therefore clauses 11 and 12
were irrelevant in the context of what transpired in this case.
v. Ground (d)
This ground depends on the submissio n that the arbitrator was not entitled to
determine the termination of the contract wrongful. Clearly if the termination
was wrongful, then the withholding and use of the Respondent’s equipment
was not justified and damages for so doing properly assessable.
vi. Ground (e)
There can be no error of law on the face of the award if no relevant
proposition of law is stated in the award. This ground fails for that reason. In
any event, the arbitrator seemed to have applied the principle that the
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Respondent was only entitled to recover the retention sum less the value of
remedial works. No fault can be found with that approach.
vii. Ground (f)
Misconduct is alleged in this ground. However, the ground relies on specific
provisions in the contract which it is alleged should have been applied by the
arbitrator. This is therefore really an allegation of excess of jurisdiction.
In so far as misconduct is alleged, the Court may look at the Terms of
Reference, but not the terms of the contract if they were not incorporated into
the award – which they were not in this instance. This ground must fail for
that reason alone.
However, if one considers it from an excess of jurisdiction perspective, then a
consideration of clauses 63 and 65 of the FIDIC Conditions reveal that they
apply to an assessment where there has been a valid termination, which the
arbitrator found was not the case. And, clause 66 applies where there has
been a ‘Release from Performance’ in ‘circumstances outside the control of
both parties’ – which was not a consideration in this case. There is therefore
no question of any excess of jurisdiction as the stated clauses were/are
irrelevant once the arbitration’s finding on wrongful termination is upheld.
viii. Ground (g)
This ground alleges misconduct and error of law on the face of the award. It
however relies on clauses in the contract for its support – that is clauses 8.1
and 63.1 of the FIDIC Conditions. No relevant proposition of law was stated
in the award and these clauses were not incorporated. This ground fails for
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In any event the ground relies on the assumption that the arbitrator’s finding
that the termination of the contract was wrongful is flawed. An assumption
without any basis as I have demonstrated above.
ix. Ground (h)
No basis for this ground is stated. In any event it also relies on the assumption
that the arbitrator’s finding that the termination was wrongful is flawed. On
both counts it fails.
x. Ground (i)
This ground alleges misconduct. It invites this Court to review the evidence
and conclude that the arbitrator was wrong. However, ‘it is not misconduct to
make an erroneous finding of law or fact’ – Halsbury’s supra and see also,
Moran v Lloyds , supra, at page 475. Furthermore, Courts are predisposed to
adopt ‘a benevolent attitude to the interpretation of arbitral awards and
particularly to those made by commercial men’ – Mustill, supra, at page 570.
Thus, ‘in case of uncertainty (a court) will so far as possible construe the
award in such a way as to make it valid rather than invalid. And, ‘in case of
uncertainty (a court) will assume any justifying facts which could exist did
exist, even though the arbitrator has not found them.’ [Mustill, supra].
In any event, an error of fact can only arise when it appears on the face of the
award – Moran v Lloyds supra – and this has not been demonstrated or
xi. Ground (j)
This ground alleges error on the face of the award and misconduct.
For the reasons given with respect to ground (i) above, any contention based
on error of fact or misconduct must fail. In so far as an error of law is
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suggested, based on a misapplication of the burden of proof, that has not been
In my opinion the arbitrator stated the relevant issue (paragraphs 185 and
209), considered it in detail (paragraphs 205-257) and stated his finding
(paragraph 258). Clearly it was a question of fact (paragraph 258) determined
after careful analysis. Applying the benevolent approach to be taken to
awards, I am of the opinion that the Applicant has not demonstrated any error
on the face of the award or misconduct on the part of the arbitrator.
xii. Ground (k)
This ground alleges “misconduct in law”, whatever that may be! What this
ground seems to assert is that the finding of ‘an implied agreement by
performance’ is an error of law because ‘no such concept exists in law.’
However, as Chitty on The Law of Contracts, Vol. 1, at page 120, paragraph
2-048 and Hudson’s, 10th ed. supra, at page 11 demonstrate, on the facts set
out by the arbitrator, not only does such a concept exist in law, but the
arbitrator appears to have applied the same rationally (see paragraph 277 of
the award, and the discussion under ground (l) below).
In so far as the Applicant asserts that ‘The doctrine of estoppel … was never
pleaded,’ that is a matter which this Court can take no cognizance of, as the
points of pleadings are not before me, and were not incorporated into the
xiii. Ground (l)
This ground alleges misconduct. It is based on an alleged failure to apply
certain provisions of the terms of contract. Such a failure does not amount to
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If what was intended was to allege an error of law on the face of the award,
then because the clause in the contract has not been incorporated in the award,
this submission must also fail.
If what is alleged is an excess of jurisdiction, then one is permitted to look at
the clauses. But the Applicant does not specify why the failure to consider the
stated clauses amount to an excess of jurisdiction (misconduct). On the basis
of vagueness this ground will also fail.
In any event, clauses 51.2 and 52.3 of the FIDIC Conditions refer to
variations. At paragraph 277 of the award the arbitrator determined that ‘an
implied agreement by performance’ was arrived at by the parties, with respect
to the acceleration costs for the completion of the cricket facility. This was on
the stated basis that, where ‘one party asks another to perform a contractual
action, is told the express terms upon which the party will perform, and then
fails to state counter terms or object while the party performs as requested’ –
‘in such a situation … silence constitutes acquiescence’ (paragraph 278 of the
award). That is, the arbitrator concluded that a separate contract existed
between the parties on this issue – see Hudson’s 10th ed. (supra) at pages 506-
507. Therefore, no question of ‘variations’ arose.
Further, this matter was specifically within the Terms of Reference as one of
the issues stated by NHIC to be determined by the arbitrator [see Issue 2 (at
page 11) and, sub- issue 2.4 (at page 12) of the Terms of Reference].
xiv. Ground (m)
No basis for this ground is disclosed. It fails for vagueness. To allege that a
finding ‘is perverse’ i too unspecific to merit any serious consideration. In
effect this ground is asking this Court to review the facts. This it will not do
for the reasons already given.
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xv. Ground (n)
This ground, like (m) alleges that the particular finding of the arbitrator ‘is
As before, and for the same reasons, this ground fails, In any event, it appears
to rely on the assumption that the arbitrator erred in deciding the termination
xvi. Ground (o)
This ground alleges that the arbitrator ‘erred’. As with grounds ‘m’ and ‘n’
above, this ground fails for vagueness and because it seem to be inviting the
Court to reconsider the factual findings of the arbitrator.
xvii. Ground (p)
This ground alleges error on the face of the award. The error alleged is clearly
an error of fact. It relates to a variation order (No. VO12). NHIC was
contending that it should be paid $148,467.60 because too much money had
been deducted with respect to the works done for “caulking’ and ‘cycle track
What the arbitrator found was that the proper rate to be used to assess what
was due was the contract rate and not the actual cost (re caulking – see
paragraph 348 of the award): the claim being not for work done, but for an
excessive deduction for work not done. In these circumstances, the Applicant
has not demonstrated any error of fact on the face of the award.
xviii. Ground (q)
This ground alleges misconduct. It is related to the ‘ignoring of express
provisions of the contract,’ namely clause 53.4 of the FIDIC Conditions. This
is not a matter of misconduct. This ground fails for that reason.
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In any event, Clause 53 is referred to (incorporated) in the award – see
paragraph 303. However, on a reading of clause 53 and in particular 53.4 and
of paragraph 303 of the award, in my opinion, there was no demonstrated
error of law, as the arbitrator properly applied the provisions of clause 53 to
the circumstances under consideration.
Clause 53.4 deals with the requirement that claims ‘be verified by
contemporary records,’ where a contractor ‘fails to comply with any of the
provisions of this clause’ – i.e. 53.1, 53.2 and 53.3. In my opinion, the
arbitrator properly interpreted clause 53 when read in its entirety and applied
its provisions to the facts as he found them, as is explained and demonstrated
at paragraph 303 of the award.
xix. Ground (r)
This ground alleges error of law on the face of the award and misconduct. No
relevant proposition of law is stated. There can therefore be no sustainable
challenge on the ground of error of law on the face of the award. The subject
analysis by the arbitrator is really one of fact. For the reasons given above
this Court will not interfere with this aspect of the award. Also, no question
of misconduct arises, as also explained above.
xx. Ground (s)
This ground alleges misconduct. This allegation cannot constitute
misconduct. The ground fails for this reason. In any event, the fact that the
arbitrator did not refer to a particular item of evidence does not mean that he
did not consider it. The Court assumes that the arbitrator considered all
relevant evidence before coming to any determination. And further, on the
face of the award paragraph 377 appears rational.
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xxi. Ground (t)
This ground alleges misconduct and error on the face of the award. Paragraph
290 (k) states the arbitrator’s finding on a claim by ICS. No question of
misconduct can arise under this ground as pleaded. Furthermore, there has
been no demonstrated error of fact of law. No relevant law is referred to and
this Court is not entitled to consider any documents outside of the award.
Also, it is presumed that the arbitrator considered all the relevant evidence and
principles in coming to his decision.
Finally, in so far as an attempt was made to refer to the Terms of Reference,
that may be done if some excess of jurisdiction or technical misconduct is
being pursued. That is not the case here. The arbitrator dealt with an issue
properly before him, presumably on the evidence before him.
xxii. Ground (u)
This ground alleges misconduct. It alleges that the arbitrator failed to
adjudicate upon the Applicant’s claim for damages for remedial work done
after termination, as claimed in the Terms of Reference [see pages 20, 1.11
and 1.12 and 22, (a) and (c)].
In my opinion this ground is baseless as the arbitrator did deal with these
claims at paragraphs 284 to 294 of the award, and paragraphs 406-407 (ICS’s
costs for practical completion) and paragraphs 409-411 (ICS’s claim for
It is not this Court’s function, in the context of the challenge by the Applicant,
to review the arbitrator’s findings on these issues.
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xxiii. Ground (v)
This ground is not based on any specific assertion. It is vague and fails for
that reason. In any event, it appears to be linked to the challenge to the
arbitrator’s finding on termination.
xxiv. Ground (w)
This ground is based on error of law on the face of the award.
There is no necessary error of law in stating that the Engineer was not
independent or impartial. In any event, this determination by the arbitrator
was not a material basis for any decision on any of the other disputes or issues
referred to him.
xxv. Ground (x)
This ground alleges error on the face of the award and misconduct with
respect to the finding at paragraph 182 of the Award, that the Applicant’s
failure to wait fourteen (14) days to take possession was a violation of clause
63.1 (e) of the FIDIC Conditions.
This ground cannot give rise to an allegation of misconduct. Further, this was
an issue raised by NHIC (see clause 5.2.4, at page 17, of the Terms of
Reference). And, the arbitrator purported to resolve the issue in accordance
with the terms of the contract – see clause 63.1 of the FIDIC Conditions.
Thus, there is no obvious error of law on the face of the award.
In any event, this default by ICS was not the basis for the arbitrator
concluding that termination of the contract was wrongful. It was therefore a
resolution of an issue placed before the arbitrator that did not impact on any of
the other decisions that he made.
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xxvi. Ground (y)
This ground alleges error on the face of the award and misconduct. There has
been no misconduct demonstrated. There has also been no error of fact or law
demonstrated. The assessment of the quantum for damage to reputation was
entirely a matter for the arbitrator and his consideration of the fact that the
termination was wrongful cannot be faulted as obviously wrong.
xxvii. Ground (z)
No proper basis is stated for this ground. It fails for vagueness. However, in
so far as it may allege misconduct for failure to determine a matter placed
before the arbitrator, I accept that there is no specific reference to ICS’s claim
for relief 1 (e) at page 22 of the Terms of Reference in the award. I also
accept that the Court is entitled to look at the Terms of Reference to determine
if there has been ‘technical misconduct.’
If therefore I am wrong that this ground should fail for vagueness, then I
accept that this aspect alone of the dispute should be remitted to the arbitrator
for his further consideration.
xxviii. Ground (aa)
No proper basis is stated for this ground. It fails for vagueness. However, in
so far as it alleges that the failure of the arbitrator to consider the Applicant’s
submissions on costs may amount to some basis for setting aside or remitting
the award, it is impossible for this Court to adjudicate on it. This because,
those submissions are not part of the award and this Court has not had sight of
It is to be noted however, that the arbitrator dealt with the issue of fees and
costs at paragraphs 427 to 435 of the award. And, that at paragraph 434 of the
award, he specifically stated: ‘Having carefully studied the Parties’
submissions.’ Thus, on the face of the award, this ground is baseless.
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xxix. Ground (bb)
This ground alleges error on the face of the award and misconduct in relation
to the question of costs. As with ground (xxviii) above, this ground also fails.
i. Section 3, Arbitration Act
Section 3 of the Arbitration Act provides that: “An arbitration agreement …
shall have the same effect in all respects as if it had been made an order of
Court.’ This section has been consistently interpreted as having ‘attracted the
High Court’s inherent powers of enforcement and supervision’ (Mustill,
supra, at page 447). And, the Courts have no less consistently applied the
decision in Czarnikow v Roth (supra) and denied parties attempting to oust
the jurisdiction of the Court, see in this regard Mustill at pages 448 and 450
(whether on the basis of the principle that the courts had jurisdiction over all
civil disputes which parties could not oust by private contract or on the basis
of a rule of public policy).
[Compare however the decision in Sinai Mining Company Ltd. v Compania
Naviera Sota Y Aznar (1927) 28 Lloyd’s List Law Reports 364, in which
Lord Justices Bankes and Scrutton (two of the three judges in Czarnikow), on
a challenge on the basis of error in law on the face of the award, upheld a term
in an arbitration agreement that the decision of the arbitrator was to be final
(p.365). And note also, the statements of Bankes L.J. (at page 486: ‘so much
of r. 19 as provides that neither party shall apply for a special case, when
incorporated into an agreement, is unenforceable and void’) and Scrutton L.J.
(at page 490: ‘I am also of the opinion that the latter part of r. 19 is
unenforceable, and the parties are entitled in spite of it to apply to the Court
and in a proper case obtain from it a special case on matters of law.’) in
Czarnikow , which seem to suggest that what was considered incapable of
ousting the jurisdiction of the Court was a term in an arbitration agreement by
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which the parties purported to preclude the stating of a case for consideration
by the Court].
The Respondent contends, that Article 28 (6) of the Rules of Conciliation and
Arbitration of the ICC (incorporated by clause 67.3 of the FIDIC Conditions)
operates in the context of this case (an international commercial arbitration
conducted by the ICC) to oust the jurisdiction of the Court to review the
award. Though initially the Respondent contended that every and any
challenge to the award was prohibited by the ouster clause, the final
submission on this point narrowed the ambit of the ouster to challenges on the
basis of errors on the face of the award.
Article 28(6) states:
Every Award shall be binding on the parties. By submitting
the dispute to arbitration under these Rules, the parties
undertake to carry out any Award without delay and shall be
deemed to have waived their right to any form of recourse
insofar as such waiver can validly be made.
In my opinion, in the context of the Arbitration Act, this article does not
operate as an absolute ouster of the Courts supervisory jurisdiction over
arbitrations submitted to the ICC. The Article itself clearly recognizes that the
waiver stated therein is only operative ‘insofar as (it) can validly be made’ –
see in this regard Marine Contractors v Shell (1984) 2LLR 77 at 82. In my
opinion, section 3 of the Arbitration Act (which did not exist after 1950 in
England) can operate so as to prevent any waiver made from being valid.
That is, in so far as the ICC rules may have been intended to prohibit resort to
domestic tribunals for a review of awards, such prohibition is not absolutely
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ii. Public Policy
In the event that I am wrong in this interpretation and application of section 3
of the Arbitration Act to Article 28 (6) of the ICC Rules, I would also decline
to change or modify the existing public policy as applied after Czarnikow
(see in this regard Lord Diplock, in The ‘Nema’ (1981) 2 L.L.R. 239 at 244,
245 and 246).
Though it is clear that ‘the law relating to public policy cannot remain
immutable’ and ‘must change with the passage of time’ (Nagle v Feilden
(1966) 2 QBD 633 at 650; Maxin Nordenfelt v Nordenfelt (1893) 1 Ch. D.
630 at 647-648, 661); and that the Courts are vested with the responsibility of
applying and/or varying principles of public policy (Halsbury’s Laws of
England (1974) 4th ed. Vol. 9, at page 266, paragraph 392); there are good
reasons for exercising caution before introducing any change in long standing
rules of public policy (Fender v Mildmay (1937) 3 AER 402 at 406 – 407).
I also agree with little reservation that it is clearly desirable, especially in the
context of international commercial arbitrations conducted between parties of
equal bargaining power and capacity under the auspices of a reputable body
such as the ICC, that arbitral awards be final and binding, at least with respect
to disputes/issues of fact and law (see in this regard, Leggatt J, in Arab
African v Olieprodukten (1983) 2 L.L.R. 419 at 423.
Yet, because the above stated view is a personal and relatively uninformed
one, I accept the advice of Donaldson J. in Tramountana Armadora SA v
Atlantic Shipping Co. (1978) 2 AER 870 at 872:
If, therefore, it is desirable to restrict the right of appeal from
an arbitral award, as it undoubtedly is, it would be much better
to do so by statutory restrictions …
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Interestingly, in England, within one year of this decision and the observations
of Donaldson J, the 1979 Arbitration Act was passed! Such prompt responses
by our own legislature would be welcomed and it is hoped will be undertaken
in this area of the law.
In this Court’s opinion, because of the insufficient evidence before the Court,
it would be an arbitrary exercise of power to modify the existing public
policy, to choose finality in commercial arbitrations with respect to the review
of questions of fact and law over the need for supervision of awards. In my
opinion, in the context of arbitration, such a change in policy can be effected
by Parliament. It may also be effected by a Superior Court, where the present
lack of evidence may be compensated for by the available wisdom and
experience, that may be best able to determine what should be the appropriate
modifications to the existing rule of public policy. As will become more
obvious in the discussion below ( BI NZ Ltd. v Badger Chiyoda ), this
Court has not been afforded the evidence or assistance that is necessary if an
informed decision is to be made to effect the change of policy advocated by
iii. CBI NZ Ltd. v Badger Chiyoda (1990) LRC 621
Towards the end of the legal submissions in this matter the Court brought to
the attention of the parties’ attorneys the decision of the Court of Appeal in
New Zealand in CBI NZ Ltd. Written submissions were subsequently
received from both sides on the relevance of the case to the instant issue.
In CBI NZ Ltd the Court was called upon to decide whether Article 24 of the
ICC rules [similar to Article 28(6) set out above] was effective to oust the
jurisdiction of the Court to remit or set aside an award on the ground of error
of law on the face of the award, or whether there existed public policy reasons
such as those stated in Czarnikow preventing such as ouster. The context
was an international commercial arbitration freely entered into between
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parties of equal bargaining power and conducted under the auspices of the
ICC (circumstanc es akin to the instant matter), The relevant New Zealand
legislation was the Arbitration Act, 1908, in which its sections 3, 11 and 12
are similar to sections 3, 18 and 19 of the local Arbitration Act.
The Court held that Article 24 was intended to make an award final and to
exclude challenges to an award in domestic courts where such a waiver could
validly be made. And, that the parties in that case had intended that the
subject award be final and not reviewable on the ground of error of law on its
face. Also, that the Arbitration Act 1908 (NZ) did not prohibit contracting out
and there was nothing contrary to the statute in a clause excluding challenges
for error of law on the face of the award. Finally, that public policy in New
Zealand showed that Article 24 should be enforced by allowing the ouster
provided in that article.
The Court thus distinguished Czarnikow and decided that, in the limited
context of a one off international commercial arbitration between free parties
of equal bargaining strengt h and conducted by an arbitrator with established
legal training and experience (governed by the ICC), it was not contrary to the
public policy of New Zealand to allow the parties to oust the jurisdiction of
the Court where what was challenged in the award was an error of law on its
face. With respect to all other challenges, the Court did not compromise its
right to supervise awards.
In my opinion, though on a superficial reading one may think that the CBI NZ
Ltd decision is on all fours with the instant matter, this has not been
demonstrated to be so. Fundamentally, the necessary evidence to support a
shift in public policy in Trinidad and Tobago, as undertaken by the Court of
Appeal in New Zealand, has not been made available to this Court.
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I accept that the public policy in each jurisdiction may be determined or
changed by its Courts in the context of the present and prevailing values,
trends and needs of the particular jurisdiction (see pages 628-629 of CBI NZ
Ltd supra). Such changes are therefore highly contextual, and must only be
effected with ‘extreme caution’ (CBI NZ Ltd, at page 635). Indeed, in my
opinion, such caution demands sufficient cogent evidence of the present and
prevailing values, trends and needs in Trinidad and Tobago on this issue.
That necessary evidence, as is relevant to Trinidad and Tobago, has not been
made available to the Court. The Court of Appeal of New Zealand, though it
bore in mind international trends in the area of commercial arbitrations, relied
heavily on a 1988 Law Commission discussion paper (New Zealand) on
Indeed, Cooke P. pointed out (at page 630):
There is a wealth of literature, our Law Commission’s discussion
paper being a recent addition and an unmistakable falling in with the
overseas trend. The importance of that paper for the purpose of this
court’s responsibility in the present case is not any particular
legislative r form envisaged by the Commission, but the evidence
which the thinking in the paper provides of the general direction in
which public policy today may point.
So also, Barker J. (at pages 652-655) listed no less than eight developments of
recent origin tha t contributed to the Court’s interpretation of the trend in
public policy at the time. Several of these were context specific for New
Thus, while I agree that the trend internationally is towards upholding ouster
clauses in the limited context being considered, and that to do so could benefit
the public and commercial parties who proceed to arbitration (for the several
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reasons cited in CBZ NZ Ltd, e.g. at page 632 c-i), and that Trinidad and
Tobago has taken some steps that appear to point in this direction (e.g. by
enacting the Arbitration (Foreign Arbitral Awards) Act – No. 35 of 1996 and
by ratifying the Washington Convention on the Settlement of Investment
Disputes - on the 3rd January, 1967), I am not satisfied that enough evidence
of the trend towards a shift in public policy in Trinidad and Tobago has been
demonstrated. It may be that this decision will prompt some urgent empirical
analysis and review in this area, which is one ripe for reform.
On the 5th June, 2002 Stollmeyer J. ordered that the Applicant provide
security for costs in the amount of $400,000.00 by way of a bond. The bond
was to be approved by the Registrar. This was done on the 9th July, 2002. It
was sealed and stamped on the 10th July, 2002. It has been in the custody of
the Court since that time.
The Respondent has applied to have this bond handed over to it. It is argued
that the Respondent is the beneficiary under the bond and no good reason
exists why it should not be delivered to the Respondent for safe keeping
and/or enforcement (if the need arises).
Counsel for the Applicant resisted this application contending, inter alia, that
the practice in this jurisdiction was for a bond of this type to be kept by the
Registrar. However, with the agreement of both sides, this Court inquired of
the Registrar as to whether this was so. I was informed that the Registrar was
not aware of any practice that required her to keep a bond of this nature.
In my opinion, having considered the learning cited in Halsbury’s Laws of
England, 4th ed. (1982), Vol. 37 at page 232 paragraph 306 (‘The master
should approve the bond, but it must be given to the party requiring the
security and not to an officer of the court’); Daniell’s Chancery Forms, 7th ed.
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(1932) page 1060 (‘The bond must be given to the party requiring the security
and not to an officer of the Court’), Atkin’s Court Forms, 2nd ed. (1983) Vol.
13 (1983 issue), page 152 (‘The bond will usually be given to the defendant,
but the manner of giving it is in the complete discretion of the Court’), and the
Supreme Court Practice, 1997 , Vol. 1, Order 23 at (page 417) 23/1-3/27 (The
bond … is given to the person requiring the security. Security may be given
by the bond of a guarantee society, which is made out to the party entitled to
the security and is lodged with their solicitors’), I am of the opinion that a
bond for security for costs may properly be handed over to the attorneys for
the party entitled to the security.
Though I accept that the word ‘given’, when used in the authorities cited,
refers to the name of the person in whose favour the bond is payable, I also
accept that it could also mean ‘handed over’ to that person. Indeed, the
learning in the Supreme Court Practice suggests that a bond may properly be
given/handed over to a beneficiaries attorney. No prejudice has been
suggested by the Applicant. And, no other special or exceptional
circumstances have been brought to the Court’s attention that would warrant a
refusal of this application.
In light of all of the above this Court will dismiss the Applicant’s Notice of
Motion. No good reasons have been advanced as to why costs should not
follow the event. The Applicant will therefore pay the Respondent’s costs
certified fit for senior and junior counsel. It is further ordered and directed
that the Bond issued in this matter in favour of the Respondent for security for
costs be forthwith handed over to attorneys on record for the Respondent.
Dated this 17th day of February, 2004.
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