COSTAIN LTD V TARMAC HOLDINGS LTD

[2017] EWHC 319 (TCC), Queen's Bench Division, Technology and Construction Court, Mr Justice Coulson, 28 February 2017

Arbitration - Stay of proceedings - Whether there was a valid arbitration clause and a dispute within the clause - Whether clause was incapable of being performed by reason of abandonment, repudiation or estoppel - Whether arbitration clause null and void - Arbitration Act 1996, section 9

CL engaged TH under a sub-contract to supply concrete for a motorway safety barrier. By clause 93 the contract provided for adjudication and then arbitration. Clause 93 provided that: (1) a party could refer a dispute to adjudication if he notified the other of the dispute within four weeks of becoming aware of it and between two and four further weeks had passed; (2) if a dispute was not notified and referred within those time limits, neither party could refer it to the adjudicator; and (3) a party could refer a dispute to arbitration if he was dissatisfied with the adjudication. The concrete proved to be defective, but a dispute arose as the appropriate remedial action. CL did not refer it to adjudication within the time limits permitted, and TH commenced adjudication seeking a declaration that CL was out of time to pursue the claim. CL then issued proceedings in the Technology and Construction Court seeking damages of around ?6 million. TH sought a stay on the basis that there was a binding arbitration clause and that the proceedings should be stayed under section 9 of the Arbitration Act 1996. CL argued that: clause 93 had no application, there was no arbitration clause and the proceedings could be brought; if that was wrong, by reason of the course of dealing between the parties and their solicitors from March to December 2015 TH was not able to rely upon the arbitration clause by reason of abandonment, repudiation or estoppel, so that it was "inoperative" within section 9(4) of the 1996 Act; and the arbitration agreement was null and void because the adjudicator had acted without jurisdiction in reaching his decision, so the arbitration provision had not been triggered.