10 November

The Branch moved to the spacious surroundings of the Council Chamber of County Hall in Maidstone for a demonstration arbitration for the South East Association of the Institution of Civil Engineers, our hosts for the evening. The event was organised by Dennis James who has strong associations with both. As link man for the evening, Dennis introduced our chairman, David Parker, who explained the distinctive character of dispute resolution by arbitration and alluded to the wide range of professions represented within the Chartered Institute. In the demonstration, Dennis would act as narrator and observers' friend, explaining exchanges that might appear unclear.

The players duly took up their positions and were introduced. Roderick O'Driscoll was Arbitrator, John Burgess was advocate for the Claimant Contractor with James Mumford as his opponent for the Respondent Employer. The subject of the demonstration was a dispute between Bestbuild Corporation plc and the Zarbar Harbour Authority. A background document had been distributed to each member of the audience and before the action commenced, Dennis summarised the issues. The underlying contract was subject to the ICE 6th edition and the arbitration was subject to the 1997 ICE Arbitration Procedure. The demonstration was unscripted and opened with the Preliminary Meeting. Dennis described the ICE procedure for referring disputes, in the first instance to the Engineer for a decision under clause 66, and the subsequent appointment process, if one of the parties wishes to arbitrate but they cannot agree on the Arbitrator.

As Arbitrator, Roderick opened the Preliminary meeting by introducing himself as a solicitor who may require expert assistance with technical issues that may arise. He referred to the new Arbitration Act, which imposes a duty on Arbitrators to adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means of resolving the matters to be determined. He invited John Burgess for the Claimant to tell him briefly what the dispute was.

John referred to the terms of the contract, its arbitration clause, the contractor's various claims and the Engineer's unacceptable decision, the subsequent reference to arbitration and that the ICE Arbitration Rules applied. Under the Rules, there are three procedural options and he suggested, on the basis that the dispute was straight forward, essentially of quantum, that the short procedure was the most appropriate.

When the Arbitrator invited James Mumford to give the Harbour Authority's views, his jurisdiction was challenged. The Harbour Authority felt arbitration premature, as it had only just received the claim and was still considering it. As it was neither accepted nor rejected, no dispute yet existed. The narrator explained that challenges to jurisdiction are not infrequent occurrences at Preliminary Meetings.

Having received confirmation from the Claimant's advocate that the claim had been submitted to the Harbour Authority's Engineer some 6 months previously, the Arbitrator was quick to rule on his own jurisdiction under s.31 of AA'96 (and rule 7.1 of the ICE procedure). He cited Halki Shipping v Sopex Oil to support his decision that a dispute did exist, and he had been properly appointed to decide.

The advocates then debated whether liability was also in issue. The Employer wished to introduce a claim for Liquidated Damages for delay, which the Claimant's advocate rejected; it was the first he had heard of it. The Claimant pleaded for the short procedure and the Arbitrator summarised what that would entail. The Responent's advocate objected to the short procedure and pointed out that under the Rules it could not be adopted without his client's agreement. The Harbour Authority felt this substantial and complex matter should be given more considered attention. The Arbitrator invited the audience to help him decide and the consensus was against the short procedure.

During the fixing of the timetable for delivery of cases, the Claimant required 30 days to submit the Statement of Case. To the amusement of the audience, the Respondent sought 120 days to prepare the Statement of Defence, as it "was awaiting reports". The narrator explained the Arbitrator's obligation to give both parties a reasonable opportunity to put his case and deal with that of his opponent. Nonetheless, on this occasion the Arbitrator ruled that 120 days was too long but gave the Respondent leave to make a case for an extension of time later.

The Arbitrator, more out of courtesy than obligation, sought the parties' approval to appoint David Parker, a chartered surveyor, as his technical expert for the duration of the reference. Unsurprisingly, James Mumford thought a civil engineer more appropriate. Without making a decision, the Arbitrator raised the capping of costs under s.63 of the Act and rule 7.4 of the ICE procedure. The Claimant proposed a combined limit of £40,000, as the facts were straightforward. The narrator explained about cost capping and, as the audience had by now come to expect, the Respondent opposed any form of capping, as the Arbitrator had insufficient information to make a just ruling yet. The Arbitrator accepted that argument but said he would raise the matter again later.

At this point, under severe time pressure, Dennis explained that the Arbitrator would follow the Meeting by issuing an Order for Directions, setting out what had been decided. He suggested that sensible Arbitrators try to get the parties, as well as their representatives, to attend such meetings, to focus their minds on settlement.

Rod explained about applications for Security for Costs and the function of Pleadings and Scott Schedules to identify issues in the dispute and the parties' respective stances. The process of Discovery and agreeing bundles was described and Dennis highlighted the possible danger of endangering one's own case by incautious marginal notes on original correspondence. John Burgess drew attention to the move away from full discovery in the ICE and JCT Arbitration procedures, which envisage disclosure of only those documents on which the parties seek to rely.

The process of exchanging written evidence of witnesses and experts' reports to save Hearing time and to avoid either side being taken by surprise was also described. John thought it prudent to enquire at the start of the Hearing if the Arbitrator had read the papers submitted to him, because frequently he has not. The value of advocates' closing submissions in writing was also highlighted. James Mumford explained the use of settlement offers as a means of limiting a party's exposure to costs.

Rod described what is involved in writing a reasoned Award and the need for the Arbitrator to confine his reasons to matters that have been argued before him or on which the parties had been given the opportunity to comment. He mentioned the Arbitrator's duty to deal with costs and the usual rule but, picking up on James' point regarding sealed offers, cautioned that it is prudent to enquire if the parties wish to make special submissions in relation to costs before deciding.

Having covered a great many topics, the meeting was closed by our Chairman, by inviting those interested to pick up an information pack on the Chartered Institute from our PRO. The ICE Association Chairman-Elect, David Neal, thanked our colleagues for the demonstration and noted that the last time such a joint meeting took place was in 1978. We departed promising not to leave it so long next time. Derek Ross