The Gazette 1991

GAZETTE

NOVEMBER 1991

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.

Courts' endorsement of

arbitrators' powers

Grangeford -v- S.H. Ltd.,™

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-

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.

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.

Unione Stearinerie,

) 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

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.

Corrigan -v- Irish Land Com-

mission.

Rex -v- Rand.

Rex (Tavemer) -v- Justices of Co.

Tyrone

Haigh -v- London & North

Western Railway Co.

The final case quoted involved an

arbitration and was the nearest in

facts to

Bord na Móna -v- Sisk.

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

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