Delta Petroleum (Nevis) Ltd v Nevis Electricity Company Ltd
| Jurisdiction | Saint Kitts and Nevis |
| Judge | Wallace, M |
| Judgment Date | 28 February 2019 |
| Judgment citation (vLex) | [2019] ECSC J0228-3 |
| Court | High Court (Saint Kitts and Nevis) |
| Docket Number | Claim No. NEVHCV2018/0112 |
| Date | 28 February 2019 |
THE EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
(CIVIL)
Master Yvette Wallace (Ag)
Claim No. NEVHCV2018/0112
Ms. Dia Forrester and Mr. Gyan Robinson of Counsel for the Defendant/Applicant
Mr. Victor Elliott-Hamilton of Counsel for the Claimant/Respondent
Wallace, M (A.g.).: This is an application for stay of proceedings by the Applicant pending an arbitration proceeding under the provisions of a Fuel Supply Agreement dated 18 th July 2013 (“the Agreement”).
Clause 18 of the Agreement provided:
“In case any dispute or difference shall arise between the parties thereto touching or relating to this Agreement the same shall be referred to an Arbitration panel. One person each to be appointed by both parties and the nominees to select a third person who shall be the Chairman. The ruling of the Arbitration panel shall be advisory only between the parties as they seek to settle the dispute. Where the parties cannot settle the dispute any one of the parties can institute court proceedings with respect to the dispute. The costs of the Arbitration panel under this Agreement shall be borne equally by the parties to this Agreement.”
A dispute arose between the parties and the Respondent filed a claim on the 27 th September 2018 without invoking the procedure under the Clause 18 provision.
The Applicant filed this application on 24 th October 2018 seeking an order that the proceedings be stayed under Section 4 of the UK Arbitration Act 1950. The St. Christopher and Nevis Arbitration Act mandates that the 1950 UK Arbitration Act governs arbitration matters in this jurisdiction. The application was supported by affidavit setting out the factual background.
At the hearing before me I directed that counsel for both parties address the court on whether it may consider the application under its inherent jurisdiction by filing written submissions with authorities at the close of oral arguments. Both parties have complied with the directive and the Court now considers the application.
Learned Counsel for the Applicant submitted that the parties are required to proceed in a particular manner by virtue of the Agreement, i.e. they are to refer the matter to an arbitration panel. The parties are required to await the decision of the panel before instituting proceedings. The obligation is to engage in the alternative dispute resolution method. Clause 18 of the Agreement is a valid, legally enforceable contract that the parties freely entered into and that includes the dispute resolution provision and is a consensual position on how any dispute is to be resolved. Use of phrase “shall be referred to an arbitration panel” confirms that this is a condition precedent to court proceedings. Further, there is sufficient certainty in the phrasing of the Clause for the court to determine whether that step has been taken. Counsel made reference to Cable & Wireless plc v IBM United Kingdom Ltd 1 in support of this contention.
Counsel invited the court to have regard to National Transport Co-operative Society Limited v The Attorney General of Jamaica 2 in which the general position of the courts has been that the court is reluctant to hold that a provision in a document that is plainly intended to have contractual effect is of no effect in the law. If those procedures can be measured and if the court can identify what has to be done, then the provision ought to be upheld.
Learned Counsel for the Applicant Ms. Forrester further submitted that if there is any contention that Clause 18 is ambiguous, then the interpretation most favourable to the consumer shall prevail. The Consumer Affairs Act section 33 provides that a supplier shall ensure that any written term of the contract should be in plain and intelligible language. Where there is any doubt in the meaning of written term of a contract it is to be interpreted against the supplier. In this case the Applicant is the consumer in the Agreement, she submitted. In light of this, and the principles of Contra Proferentem, if there is any consideration that the clause is ambiguous, the it must be interpreted against the Respondent who was the drafter and proposer of the contract itself.
Ms. Forrester submitted that the court usually stay proceedings to allow the parties to submit to arbitration and invited the court to consider Ocean Conversion Limited v The Attorney General of The Virgin Islands 3.
Counsel referred the affidavit evidence that applicant was ready and continued to be ready to proceed with the arbitration proceedings. The Respondent has ignored the obligation to go to arbitration and has commenced these proceedings. This ought not to be allowed.
Counsel for the Respondent Mr. Elliott-Hamilton in opposing the application submitted that the court should look at the nature of the application. The application is made pursuant to section 4 of the Arbitration Act which provides that any party to an arbitration agreement may, before taking any steps in the proceedings, apply to the court to issue a stay in the proceedings. The Respondent's position, he submitted, is that Clause 18 is not a valid arbitration agreement within the meaning of the Arbitration Act. Therefore, it is not binding on the parties.
Mr. Elliott-Hamilton asked the court to consider the dicta in O'Callaghan v Coral Racing Ltd 4 in which a referral to “arbitration” in a bookmaker's rules was considered as “establishing a procedure that was devoid of any legal consequences whatsoever” and so was unenforceable. Counsel submitted that the tribunal which carries out the process must make a decision that is binding on the parties. The hallmark of arbitration is that it is a procedure to determine the legal rights and obligations of the parties with binding effect which is enforceable in law. In David Wilson Services Limited v Survey Services Ltd and another, 5 it was stated by Longmore LJ that:
“The necessary attributes of an arbitration agreement are set out in the second edition of Mustill and Boyd, Commercial Arbitration (2nd edn, 1989) p 41. But, for present purposes, the important thing is that there should be an agreement to refer disputes to a person other than the court who is to resolve the dispute in a manner binding on the parties to the agreement. That is what this clause in my opinion does, and it is therefore an arbitration agreement within the meaning of s 6 of the 1996 Act”
Mr. Elliott Hamilton also referred to the case of Kruppa v Benedetti and another 6 to buttress the point that for an arbitration agreement to be considered to be within the meaning of the Arbitration Act it must determine the matter. Counsel contended that the clause did not determine the matter and as such the procedure was merely to provide a non-binding way of assisting the parties to coming to a settlement. In those circumstances it did not amount to an arbitration agreement.
Counsel contended that the parties did not agree to refer disputes to arbitration in the sense required by the Act. There is a clear distinction in endevouring to resolve a dispute through arbitration and an agreement to refer the dispute to arbitration. The former, he argued, is more akin to a mediation clause.
Regarding the Consumer Affairs Act and the Contra Proferentem Rule, Counsel for the Respondent asked the court to observe that section 3(2) of that Act refers to consumers who are natural persons and so the Applicant cannot rely on that section. Moreover, reliance on the common law principle of
Learned Counsel Mr. Elliott-Hamilton submitted that the Cable & Wireless plc case was not applicable to the case at bar as it was not one for a stay under the Arbitration Act. It concerned a special procedure. The question was whether the court in its inherent jurisdiction could stay the proceedings. This Application is for a stay under the Arbitration Act. No application was made under the inherent jurisdiction of the court. Colman J emphasized that the Alternative Dispute Resolution procedures set out in a clause must be sufficiently certain in order to be enforceable.
Counsel further submitted that Clause 18 of the Agreement does not provide the same level of certainty as the procedures in Cable & Wireless plc. as it is not an arbitration agreement within the Arbitration Act, 1950. Learned Counsel concluded that the Applicant was therefore not entitled to rely on the Arbitration Act to enforce Clause 18 as in the Agreement the panel was advisory only. Consequently, the court should not grant a stay.
Regarding the exercise of the court's inherent jurisdiction, Counsel for the Applicant Ms. Forrester contended that the court in this matter has an inherent jurisdiction to stay proceedings, a case management power to stay proceedings and a statutory right to stay proceedings based on the Arbitration Act 1950. The various principles for the statutory jurisdiction and the court's inherent jurisdiction do overlap, but it was incorrect to assert that the court's inherent jurisdiction has not been invoked in the grounds of the Application.
Ms. Forrester submitted that the underlying purposes of the principles for a stay of proceedings in the court's inherent jurisdiction are used when considering if a stay should be under the court's powers pursuant to Civil Procedure Rules, 2000 (As amended) ( CPR) Rule 9.7A and/or its statutory jurisdiction, neither are materially different and both can be exercised in any instance as may be needed.
Several authorities were submitted to buttress...
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