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Opinion - Puzzles for
Arbitrators
Puzzle 10
Here is puzzle 10 in a series of puzzles for arbitrators and aspiring arbitrators developed by Peter Horne. It deals with the Arbitrator's powers to make "provisional awards"? as the side notes in the Arbitration Act 1996 calls them. I suspect that many will consider that to be an unfortunate misnomer. Does the Arbitrator have any other powers to act quickly to enable interim relief to a party that is obviously due something? Should he use them and if so what precautions should he take.
Please spend a few minutes thinking about this particular problem. The Editor would especially welcome some guidance on this difficult subject from our many more senior and experienced Fellows.
You have just accepted appointment as Arbitrator under the 1996 Act for a building dispute, which falls outside the remit of the HGCRA. You had been provided with a copy of the arbitration notice and noted that it identified a single dispute 'that the Respondent failed to make payment of Architect's certificate no 21 in accordance with the contract'. You have written to the parties expressing your intention to hold a preliminary meeting and giving alternative dates during the third week after your appointment.
Certificate 21 was issued on the same day as the certificate of Practical Completion of the Works.
You receive a letter from the Claimant stating that it is seeking a declaration that certificate 21 is valid and an order for specific performance as the Respondent has no justifiable reason for withholding payment. Alternatively, if the Respondent makes a case, that shows 'triable issues', for withholding some of the amount certified, that you use your power to open up and revise the certificate to provide interim relief. Furthermore the Claimant suggests that you should require written submissions, supported by affidavits as necessary, on the matter immediately and use the proposed meeting to hear any oral submissions, in much the same way as the courts would deal with applications for summary judgment/interim relief.
The Claimant further states that the courts have relinquished their jurisdiction to make summary judgments or grant interim relief in contracts which contain an arbitration clause but state that there is no reason why arbitrators cannot give similar relief in less time than it would have taken in court. (a copy of the Halki -v- Sopex judgment was attached). The Claimant further suggests that failure to follow this course of action would be contrary to s.33(1)(b) of the 1996 Act. The Respondent has refused to agree to give you the power to make provisional awards and proposes that the proper forum to discuss and determine contentious matters of procedure is the preliminary meeting. The Respondent is not available for any of your proposed dates and suggests dates of some ten days later.
You are very keen to use the powers available under the 1996 Act to show that arbitration can be highly efficient and cost effective. What do you do?
Would you act differently if the contract incorporated Rules (such as JCT) which set out procedures that cannot be varied without agreement from both parties and did not permit the procedure as proposed by the Claimant?
Peter Horne