The Gazette 1991

GAZETTE

NOVEMBER 1991

In McStay, the arbitrator had power to decide a specific question of law which was referred to him for decision i.e. the plaintiff's claim for interest in respect of the period prior to the arbitrator's award. He decided that he did not have power to award such interest and he was entitled in law to make such a decision. The plaintiff did not seek a case stated and was bound by the arbitrator's decision whether that decision was erron- eous or not. O'Flaherty J., dissenting from the Supreme Court's decision in McStay, considered that a case stated would have been appropriate before the arbitrator made his decision and became functus officio. The case ought to have been remitted to the arbitrator for reconsideration in the interests of justice. Comment The Supreme Court decision in McStay clearly endorses the arbitral process and the principle of finality: interest republicae ut sit finis litium. On the other hand there is the high principle of justice: fiat justitia, ruat coelum. It seems unjust to deprive a claimant of interest on en award for a period between the date of an event giving rise to a claim, e.g. a breach of contract, and the date of the award. There should be a statutory provision, as in England, for allowing such interest for the earlier period. The interest from the date of award is allowable on the same basis as a judgment debt and causes no particular complications - s.34, 1954 Act. In Grangeford -v- S.H. Ltd.,™ a building con t ract case, the Supreme Court decided in 1989 that an arbitrator has inherent power to issue directions requiring the parties to submit details of their claims, to fix a date for hearing a reference to arbitration and to proceed thereon despite the ab- Courts' endorsement of arbitrators' powers

sence of a party where that party had been refused a further hearing. There had been inordinate delay, mostly the defendant's fault, between the arbitrator's appoint- ment and the date fixed for hearing. In the High Court, Costello J. found that there had been no misconduct. The arbitrator acted reasonably and was entitled to proceed in the defendant's absence. Bremer Vulcan, an important House of Lords case of 1981, was cited. 13 The Supreme Court in Grangeford considered that the English case did not offer any support to the defendant. What Lord Diplock for the majority and Lord Scarman dissenting, said the arbitrator had power to do in Bremer Vulcan was what he had done in Grangeford. He made an award on the evidence before him, excluding the defendant's counterclaim as it was not before him. An award must be confined to matters properly before the arbitrator on evidence heard and determined. McCarthy J. stated in Grangeford that s.19(1) of the 1954 Act, imports into every agreement a provision that relevant witnesses will be available with necessary documents. There is no power of sanction given or implied. (Avory J. in Unione Stearinerie, 14 ) It is not a punishment either to proceed in the absence of a party who refuses to take part or to make an award in such circumstances. The arbitrator must, however, act judicially. Natural justice The courts in supporting the arbitral process assume that basic prin- ciples of natural justice and the due process of law have been observed. Absence of bias is vital. Bord na Móna -v- Sisk, High Court, 1990 15 The judgment of Blayney J. is useful as a good practical guide for arbitrators with references to case law on the tests for bias. This case arose from an application by the plaintiff/claimant for an extension

of time under Order 56, Rule 4(e), Rules of the Superior Courts to set aside an award on allegations that the arbitrator misconducted him- self. Bias was alleged on the basis that he had failed to disclose his involvement as an architect with a company associated with the de- fendanf/respondents. Blayney J., with regard to the non- disclosure, considéred whether the plaintiff had a good arguable case on the merits. On bias he applied the test of a real likelihood of an operative prejudice, whe t her conscious or unconscious. There must be evidence that there was a real likelihood of bias by the arbitrator. Relevant wider case law quoted in the Bord na Móna -v- Sisk judgment included: Dublin & County Broadcasting - v- Indep. Radio & TV Comm. 16 Corrigan -v- Irish Land Com- mission. 17 Rex -v- Rand. 18 Rex (Tavemer) -v- Justices of Co. Tyrone 19 Haigh -v- London & North Western Railway Co. 10 The final case quoted involved an arbitration and was the nearest in facts to Bord na Móna -v- Sisk. In the Sisk case, Blayney J. found that there was little risk of bias by the arbitrator and the plaintiff's motion to extend time to overturn the award was refused. The moral for arbitrators, however, is to disclose relevant interests if any doubt arises about possible bias. The general rules on natural justice - audi alterem partem and nemo iudex in sua causa apply. Caveat re court's Role Case law has been cited extens- ively in this article to illustrate the courts' support for arbitration which is properly conducted within the due process of law. Most arbi- trations never reach the courts but support of the courts is available when required. Unlike statutory arbitrations, private commercial arbitrations cannot avail of judicial 363