ADR…cheaper, more efficient, civilised!

As a strong advocate of ADR and a practitioner of the art I thought this quote from former U.S. Supreme Court Chief Justice Warren E. Burger’s about litigation in the U.S. deserved a whole blog to itself:

‘The entire legal profession – lawyers,  judges, law professors – has become so mesmerized with the stimulation of the courtroom contest that we tend to forget that we ought to be healers of conflicts…

For many claims, trials by adversarial contest must in time go the way of the ancient trial by battle and blood. Our system is too costly, too painful, too destructive, too inefficient for a truly civilized people.

Doctors, in spite of astronomical medical costs, still retain a high degree of public confidence, because they are perceived as healers. Should lawyers not be healers? Healers, not warriors? Healers, not procurers? Healers, not hired guns?’

  • Annual address to the America Bar Association winter convention, Las Vegas (February 12, 1984).

This came to me from a piece published by Lexology on dispute resolution in the construction industry in the US by law firm Duane Morris which you can read here. Burger J retired in 1986…how long will it take to get the message!!

German Steel Workers’ union negotiates 4.3% increase

The threat of an all-out strike in Germany’s metal-working industry appears to have receded following the conclusion of a deal between engineering employers and the trade union IG Metall.

This has delivered a 4.3% pay rise for workers in the state of Baden-Würtemberg in the south west of the country. While only a regional deal at this stage, in the way of these things it is expected to travel throughout the metal-working and electronics sector in Germany.

Baden-Württemberg is home to several large manufacturers including the carmaker Daimler.

According to the IG Metal website despite a degree of initial confusion employers in Saxony have also signed the agreement and it appears they will be followed by their counterparts in North Rhine-Westphalia and Lower Saxony.

The agreement will last for 13 months and was concluded following 17 hours of negotiations near Stuttgart, which dragged into the early hours of Saturday. It ends weeks of partial walkouts and industrial action.

The employers had previously offered  2.6%  in response to union claims for a 6.5% increase. Not hard to see how they settled on 4.3%!

It removes the threat of the sector’s first full-blown industrial action in a decade.

Not the first increase in Germany!

The deal follows a pay rise of 6.3% for the two million workers in Germany’s public services earlier this year.

Workers in Ireland and elsewhere in Europe will be casting an envious eye at these developments as they cope with redundancy and wage cuts but clearly they reflect realities in the German economy which are not present elsewhere.

It confirms a simple business truth that workers will share in economic growth if they contribute to it.

Comments by Finance Minister Wolfgang Schäuble to the weekly newsmagazine Focus that German workers ‘deserved’ pay increases provide an interesting perspective on the growth v austerity (Hollande v Merkel) debate going on in the Eurozone at the moment.

“It’s normal that wages rise faster here than in other EU countries,” Schäuble said. “We have years of reforms behind us, and by increasing pay, Germany will help reduce economic imbalances in Europe.”

Further elaboration needed on this perhaps, but a very interesting comment.

Source (dpa, Reuters); edited; Workplace Solutions.

See also Alas, Google translation is practically unintelligible

May 26th 2012

Commercial Court refuses to set aside arbitrators award

Judgment Title: Dunnes Stores -v- Holtgen LtdNeutral Citation: 2011 370 MCA High Court Record Number: 2011 370 MCADate of Delivery: 03/27/2012 Court: High Court

Composition of Court: Judgment by: Kelly J. Status of Judgment: Approved
Neutral Citation Number: [2012] IEHC 93
2011 370 MCA



JUDGMENT of Mr. Justice Kelly delivered on the 27th day of March, 2012 
1. Dunnes Stores (“Dunnes”) seek to set aside an arbitral award (“the award”) made by Mr. Eoin McCullough, S.C., (“the arbitrator”) on 7th October, 2011. The award was made on foot of a counterclaim made by Holtglen Limited (“Holtglen”) in an arbitration between these parties.

2. The arbitration arose on foot of a development agreement of 13th June, 2007 (“the agreement”), which was made between Dunnes, Holtglen and a company called Deerland Construction Limited as surety. The agreement was in respect of works that were to be carried out in Co. Kilkenny on a premises now know as the Ferrybank Shopping Centre (the centre).

3. Included in the centre was a site that was purchased by Dunnes for the purpose of establishing an anchor store there. The works to be performed under the agreement included the construction of that store.

4. Dunnes contended that Holtglen had breached the agreement in a number of ways and had not remedied those breaches. Thus, it was argued, it was entitled to terminate the agreement. Holtglen defended that claim and counterclaimed for monies due to it under the agreement.

5. On 15th June, 2001, the arbitrator made a determination which upheld in large part Dunnes claims concerning Holtglen’s breaches of the agreement. However, he found that the breaches had been remedied and accordingly, Dunnes were not entitled to terminate the agreement. That determination of the arbitrator is not challenged in these proceedings.

6. In September 2011, the arbitrator embarked upon the hearing of Holtglen’s counterclaim and made the award in favour of Holtglen on 7th October, 2011.

7. The arbitrator determined that Dunnes were liable to pay Holtglen the sum of €20,269,732.81 pursuant to clauses 17.1.5, 17.1.6, 17.1.8 and 17.3 of the agreement. He also ordered Dunnes to pay €15,905.55 pursuant to clause 12 of the agreement. He made ancillary orders dealing with costs and the payment of interest. Dunnes now seek to set the award aside. They do so on the grounds that there is a fundamental error of law upon the face of the award.

8. Before I consider the merits of the application, I ought to deal with the jurisdiction of the court and the criteria applicable to it. 

9. Section 36 of the Arbitration Act 1954, provides as follows:-

“(1) In all cases of reference to arbitration, the Court may from time to time remit the matters referred or any of them to the reconsideration of the arbitrator or umpire.(2) Where an award is remitted, the arbitrator or umpire shall, unless the order otherwise directs, make his award within three months after the date of the order.”

10. This section provides a mechanism for the remittal of an award. It does not specify the grounds upon which an award may be remitted. The section enables the court to make the order contemplated but the grounds for so doing are to be found in common law. Quite apart from this statutory provision, there is, in any event, a common law jurisdiction to remit or set aside an award if there is an error of law on its face. This is clear from the judgment of Costello J. in Church and General Insurance Co. v. Connelly and McLaughlin (Unreported, 7thMay, 1981) where he said that:-“…there is no doubt that at common law the court can either remit or set aside an award if there is an error of law on its face…in my view the court’s jurisdiction to set the award aside in such circumstances is given by the common law.”11. Nowadays most, if not all, applications of this nature are brought pursuant to the provisions of section 36.12. This jurisdiction, according to McCarthy J. in Keenan v. Shield Insurance Company Limited [1988] I.R. 89 at 96, is limited to “an error of law so fundamental that the courts cannot stand aside and allow it to remain unchallenged”.

13. This approach was followed by Clarke J. in Limerick City Council v. Uniform Construction Limited [2007] 1 I.R. 30 at p. 43 where he said the jurisdiction is “limited and arises only where the error is ‘so fundamental’ that it cannot be allowed to stand (Keenan v. Shield Insurance Co. Limited [1988] I.R. 89) or ‘clearly wrong’ (McStay v. Assicurazioni Generali SPA)”.

14. In recent years, the task of convincing a court that it ought to intervene and remit or set aside an arbitrator’s award has become quite onerous. This much is clear from the observations of O’Donnell J. in Galway City Council v. Samuel Kingston Construction Limited [2010] 3 I.R. 95, where he said at p. 106:-

“If the grounds for remittal are matters of common law, then a number of consequences follow. Firstly, the grounds may at least in theory be capable of expansion, as indeed was recognised by Fennelly J. in McCarthy v. Keane [2004] IESC 104, [2004] 3 I.R. 617. By the same token however, the existing grounds can also be developed and if considered appropriate, made more rigorous. Indeed, this in my view is how recent Irish case law should be understood.In Keenan v. Shield Insurance Co. Ltd. [1988] I.R. 89, McCarthy J. stated in unmistakeable and trenchant terms the policy considerations that he considered should guide the court particularly in the aftermath of the Arbitration Act 1980, and perhaps more generally in the light of the development of arbitration, both domestic and international. At p. 96 of the judgment he stated:-
‘Arbitration is a significant feature of modern commercial life; there is an International Institute of Arbitration and the field of international arbitration is an ever expanding one. It ill becomes the courts to show any readiness to interfere in such a process; if policy considerations are appropriate, as I believe they are in a matter of this kind, then every such consideration points to the desirability of making an arbitration final in every sense of the term. Church & General Insurance Co. v. Connolly (Unreported, High Court, Costello J., 7thMay, 1981) itself is an example of the type of fine-combing exercise which courts should not perform when it is sought to review an arbitration award.’
Applying this test, he concluded that:-
‘There may be instances in which an award which shows on its face an error of law so fundamental that the courts cannot stand aside and allow it to remain unchallenged.’
This it should be noted is a very significant adjustment (and restriction) of the test which had previously applied, which, as McCarthy J. himself identified it on the preceding page was merely that ‘there was an error of law appearing on the face of the award’. The same process of adjustment (and restriction) is detectable in the judgment of Finlay C.J. in McStay v. Assicurazioni Generali SPA [1991] I.L.R.M. 237 where he suggested that an arbitration award could be set aside where ‘the decision is clearly wrong on its face’ (emphasis added). Similarly in McCarthy v. Keane [2004] 3 I.R. 617, Fennelly J. at p. 627 considered that the judgment of McCarthy J. in Keenan v. Shield Insurance Co. Ltd. [1988] I.R. 89 ‘set the tone for the correct judicial approach to arbitral awards’ in general, and thus considered, that while s. 38 of the Arbitration Act 1954 permitted the court to set aside an award for ‘misconduct’, that the standard or test of misconduct should require ‘something substantial, something that smacks of injustice or unfairness’.The position has thus been reached where this approach can and should be taken to each of the grounds for remittal (and in indeed any new or extended ground), namely that it is not enough that there should be an error or misconduct, or new evidence etc., but that the factor must reach the level of being so serious and so substantial, or so fundamental, that it smacks of injustice and the court cannot permit it to remain unchallenged.”

15. That final paragraph summaries the standard that has to be achieved by an applicant for an order of this type. Such an applicant must demonstrate not merely error on the face of the record but an error so serious and so substantial or so fundamental that it smacks of injustice and the court cannot permit it to remain unchallenged.16. As is clear from a later passage in the judgment of O’Donnell J., this approach of the courts is not to be regarded or described as some form of “deference” or “curial deference” to an arbitrator. As he says:-

“If there is deference, it is not to the arbitrator, but to the parties’ choice of a process which values certainty and speed above technical correctness, and which recognises that correctness is itself the matter upon which courts and judges might reasonably differ. The scheme thus created (and chosen by the parties) has a relatively high tolerance for matters which upon close inspection might be revealed to be errors of procedure, fact, evidence or law.”17. Finally, O’Donnell J. issues a cautionary reminder at p. 108 of the judgment where he says:-“I would suggest that it is important that the courts in considering challenges to arbitral awards should firstly remind themselves of the high tolerance that the system of arbitral review has for arbitral error and furthermore should seek to articulate as fully as possible the consideration of law and policy, and the analysis of the individual proceedings, which lead the court to conclude that in any given case a substantial error has or has not been established which is so fundamental that the proceedings cannot be allowed to stand.”18. The approach which I take to this application is that identified in the passages from which I have just quoted.
The Agreement
19. In order to understand the criticism which is made of the award, it is necessary to set out in a little detail some provisions of the agreement.

20. The agreement provided that Holtglen was to construct and complete the store for the amount specified in the agreement.

21. Clause 17 required Dunnes, subject to compliance by Holtglen and/or the surety if applicable with the provisions of the agreement, to pay €37,250,000 together with VAT thereon and a further €1,025,000 together with VAT thereon to Holtglen in the manner prescribed under clause 17. In essence, that clause provided for stage payments to be made on foot of architect’s certificates. The first four such payments were to be made on the date of commencement of works, the completion of the ground floor slab, the completion of the roof of the store and completion of the first floor slab of the store. These payments were made and thus were not in issue before the arbitrator.

22. It was the payments prescribed at clauses 17.1.5, 17.1.6 and 17.1.8 that were in dispute. They provided for 20% of the sum to be paid on the date of store practical completion; 20% of the sum to be paid on the date of centre practical completion; and 2.5% of the sum to be paid twelve calendar months after the date of store practical completion. Store practical completion occurred on 10th June, 2009. Centre practical completion occurred on 28th July, 2009 and so the final sum became payable on 10th June, 2010 being twelve months after the date of store practical completion.

23. he only other provision of clause 17 which is relevant is 17.6 where it is stated:-

“The Developer (Holtglen) warrants that sufficient funds including bank finance are in place and approved for this purpose and all terms and conditions of such finance will be complied with prior to commencement of and during the construction of the building works.”24. Clause 22 of the agreement is the other clause of relevance. It deals with default and termination. It provides as follows:-“22.1 It is hereby agreed that the company (Dunnes) shall have full right liberty and power (without prejudice to any other right or remedy and without being obliged so to do) in case:-
(a) The Developer or the Surety shall materially fail to perform or observe any covenant or agreement on its part contained in this Agreement and fails to commence to remedy the breach of such covenant or agreement within 30 days after notice in writing specifying the breach and requiring it to be remedied is given by the Company to the Developer or as the case may be the Surety or fails to diligently remedy such breach within a reasonable period of time (but not exceeding 60 days) having regard to the nature of such breach;(b) The Developer or if more than one either of them or the Surety is unable to pay its debts as they fall due within the meaning of s. 214 of the Companies Act 1963 or shall have a receiver appointed over any of its assets or undertaking or shall enter into liquidation whether compulsory or voluntary (except liquidation for the purposes of reconstruction) or an examiner is appointed or it shall compound or arrange with creditors or shall suffer its goods to be taken in execution; or

(c) The Centre Opening Date or the Date of Centre Practical Completion is not achieved within the Development Period.
To determine this agreement on giving notice to the Developer without prejudice to any right or remedy of the Company whether for the recovery of any money due to it or in respect of any breach, non performance or non observance of the terms and conditions of this Agreement or otherwise.22.2 Notwithstanding the foregoing provisions the Company shall not without first giving the funder not less than 60 (sixty) days previous notice in writing (the “Company’s Notice”) exercise any right it may have (i) to terminate this Agreement or to treat this Agreement as having been repudiated by the Company; or (ii) seek to exercise any right it may have against the surety under this Agreement. The Company’s Notice shall specify the grounds upon which the Company claims it is entitled to terminate this Agreement or seek to exercise any right it may have against the Surety (as appropriate). The Company’s right to terminate this Agreement or seek to exercise any right it may have against the Surety (as appropriate) shall cease if before the expiry of the period stated in the Company’s Notice:-
(a) The Funder (Bank of Ireland) gives notice in writing to the Company substituting the Funder for the Developer as Developer under this agreement (a “Notice of Substitution”); or(b) The breach or breaches specified in the Company’s Notice insofar as they would entitle the company to terminate this Agreement or seek to exercise any right it may have against the Surety (as appropriate) have been remedied.
Upon but not before the giving of a Notice of Substitution the Company shall accept the instructions of the Funder to the exclusion of the Developer and/or the Surety as appropriate in respect of the performance of this Agreement upon the terms and conditions of this agreement.All obligations of the Company to the Developer under this Agreement whether in respect of matters arising before or after the giving of a Notice of Substitution shall be deemed to be obligations to the Funder as if it had at all relevant times been a party to this Agreement in place of the Developer. All obligations of the Developer to the Company under this agreement whether in respect of matters arising before or after the giving of a Notice of Substitution shall be deemed to the obligations of the Funder as if it had at all relevant times been a party to this Agreement in place of the Developer.

22.3 If this agreement shall be determined under the provisions of clause 22.1, and if a Notice of Substitution is not validly and properly given in accordance with the provisions of clause 22.2 prior to the expiry of the Company’s Notice, the licence herein granted to the Developer in respect of the Site shall also determine and the Company may without prejudice to any other right or remedy resume possession of the Store and the Store Building Works together with all buildings, erections, materials and things thereon with power to hold and dispose thereof as absolute owner as if this Agreement had not been entered into and without making to the Developer any compensation or allowance for the same and without being liable to make any further payment to the Developer.”
The First Award
25. Dunnes alleged that Holtglen had been guilty of four breaches of the development agreement and as a result it was entitled to terminate it.26. Those alleged breaches can be summarised as follows:-

(i) Holtglen’s failure to use “all reasonable endeavours” to procure Centre Practical Completion by 31st October, 2008 as required by clause 9.4 of the agreement;(ii) Holtglen’s failure to use “reasonable endeavours” to let retail units in the centre and to have as many retail units open on the Centre Opening Date as was reasonably possible as required by clause 13.11 of the agreement;

(iii) Holtglen’s delay in achieving Store Practical Completion so as to defer the twenty week period within which the centre had to be open for trade to the public as provided for in clause 9.7 of the agreement; and

(iv) Holtglen’s failure to have sufficient funds including bank finance in place and to comply with the terms and conditions of such finance as required by clause 17.6 of the agreement.

27. It is not necessary to set out in detail the arbitrator’s findings in respect of these complaints save to record, as I have already done, that the bulk of them resulted in a finding in favour of Dunnes. But the arbitrator found that such breaches had been remedied and therefore Dunnes was not entitled to terminate.28. His findings in respect of the complaint concerning the breach of clause 17.6 bear examination. In that regard, he said as follows at paras. 87, 88 and 90 of his first award:-

“87. The obligations of Holtglen under clause 17.6 can be broken down as follows. First, there is an obligation to have sufficient funds in place and approved for ‘this purpose’, which in context must mean for the purpose of meeting architect’s certificates. Secondly, there was an obligation to ensure that all terms and conditions of bank finance would be complied with prior to commencement of and during the construction of the building works.88. From in or about mid July 2008, or possibly slightly earlier, Holtglen did not have sufficient funds in place for the purpose of enabling it to meet architect’s certificates. This continued to be the position as and from the date of service of the notice of 28th October, 2008. On the other hand, the only breach of a term or condition of bank finance that can realistically be alleged is the failure on the part of Holtglen to meeting the loan value ratio covenant in the facility letter of 13th July, 2007. The evidence did not establish that there was, on the balance of probabilities, such a breach. It amounted at the most to an expression of a perception on the part of Bank of Ireland that there may have been such a breach. Nevertheless, I was satisfied on the evidence that there had been a breach of clause 17.6 from mid July 2008 or perhaps somewhat earlier and that that was continuing as of 28th October, 2008, because Holtglen did not in fact have at that time sufficient funds in place for the purpose of enabling it to meet architect’s certificates. Furthermore, this was a material breach, if only because of the length of time for which it had continued, and because it had the serious consequence of bringing work on the development almost to a halt.

90. However, while Holtglen was in material breach of contract as of the 28th October, 2008, the evidence discussed above establishes clearly that it remedied that breach by the 22nd December, 2008. By that time, there were sufficient funds in place for the purpose of enabling it to meet architect’s certificates. That is within the period of 60 days permitted by clause 22.1. That being so, Dunnes Stores is not entitled to rely upon this breach in order to justify termination of the Development Agreement.”
The Counterclaim 
29. Having found against Dunnes on the claim, the arbitrator proceeded to deal with the counterclaim.30. The counterclaim made by Holtglen was for the payment of sums due under clause 17.1.5, 17.1.6. and 17.1.8 of the agreement. There was also a claim for sums due under clause 17.3 involving monies relating to works which prior to the execution and exchange of the agreement had been added to store building works. Holtglen contended that 85% of those monies had become payable. There was also a claim for a further sum arising out of clause 12.5 of the agreement.

31. The evidence which was led in respect of these claims on behalf of Holtglen was not subjected to any cross examination. That being so, the arbitrator expressed himself as satisfied that the various requirements that had to be met by Holtglen under the relevant clauses had been met.

32. Thus, at that stage of the arbitration hearing, Dunnes had failed in their claim and Holtglen had satisfied the arbitrator of its entitlement to recover the monies on foot of its counterclaim.

33. Dunnes then raised a further issue in defence of the principal sums claimed by Holtglen in the counterclaim. Dunnes relied upon a contention that Holtglen was insolvent and sought to argue that that insolvency constituted a failure on Holtglen’s part to comply with the provisions of the agreement having regard to the meaning of certain introductory words to clause 17. The consequence of that, argued Dunnes, was that Holtglen was precluded from claiming the monies due. Dunnes contended that this insolvency argument was sufficiently encompassed in the original pleadings but Holtglen disagreed.

34. Dunnes maintained its contention that it was not necessary to amend its pleadings so as to raise this issue of insolvency but, notwithstanding that, made an application on the opening day of the hearing on the counterclaim for liberty to make an amendment to the reply and defence to counterclaim. The arbitrator heard argument on that issue on 7th September, 2011, and delivered his ruling on 7th October, 2011.

35. The parties agreed that the question of whether the proposed amendment would, if factually established, benefit Dunnes was entirely a matter of construction of the agreement. They also agreed that such was a question of law which could be decided on a ruling just as well as it could following the making of an amendment and the receipt of evidence. Thus, the arbitrator records this led the parties:-

“…during the course of argument, to adopt the entirely sensible approach of agreeing that I should determine on the legal merits the question of whether the proposed amendment would, if factually established, preclude Holtglen from claiming the sums due or any of them. Thus, the question on the ruling was not the one that might normally arise on an amendment application, namely that of whether there was a statable argument that the amendment could assist the party seeking it, but rather as a matter of law it would actually do so.If that question was decided against Dunnes Stores, then there was no need to go any further, because nothing could have been gained by permitting the amendment. If it was decided in favour of Dunnes Stores, that it would have been necessary to go on to consider the other arguments that were raised in favour of and against permitting the amendment. It was therefore logically the first issue that fell to be considered.”

36. That extract from the arbitrator’s award makes it clear that although he was technically deciding upon an application for an amendment to the pleadings he was, by the agreement of the parties, deciding on whether such an amendment could be of any benefit to Dunnes having regard to the true construction of the agreement.37. It is quite clear, therefore, that the task undertaken by the arbitrator was to discern the proper construction of the relevant parts of the agreement. 

Dunnes Case on Insolvency 
38. The arbitrator set out the case made by Dunnes on the issue before him. It fell under five headings summarised by him as follows:-

“(a) Under clause 22.1(b) of the Development Agreement, Dunnes Stores was entitled to terminate the Development Agreement in the event of Holtglen falling insolvent. Its entitlement in that regard was subject to the provisions of clause 22.2, providing for service of a step-in notice.(b) With the exception of a relatively small claim under clause 12, Holtglen was advancing its claim pursuant to the provisions of clause 17, but entitlement to payment under that clause was subject to the proviso in its opening words.

(c) While it accepted that it was not expressly provided that the insolvency of Holtglen was a breach of the Development Agreement, Dunnes Stores argued that the Development Agreement must be interpreted to mean that such insolvency is to be treated within the meaning of clause 17, as being a failure by Holtglen to comply with the provisions of the Development Agreement. Furthermore, it contended that this failure is in context, a highly material one. It argued that it followed that insolvency on the part of Holtglen was therefore such as to disentitle it from obtaining payments to which it might otherwise be entitled under clause 17.

(d) Dunnes Stores argued that there is nothing illogical about an interpretation whereby insolvency gives rise to a right to terminate but provides certain protections against that consequence for Holtglen, while also giving rise to an entitlement to refuse to make payments that it might otherwise have been obliged to make. The consequences of termination under clause 22 on the one hand, and entitlement to refuse to pay under clause 17 on the other hand, were quite different.

(e) Dunnes Stores pointed out that this approach made commercial sense in the context of the Development Agreement. It argued that there were numerous continuing contractual obligations that would remain to be fulfilled by Holtglen in the future where the Development Agreement had not been terminated. If Holtglen was in fact insolvent, then Dunnes Stores could be faced with the prospect of making very substantial payments to Holtglen, under circumstances where it is very likely indeed that Holtglen would not be able to fulfil its obligations in the future.”
Holtglen’s Arguments
39. The arbitrator identified the central arguments advanced by Holtglen on the interpretation of the agreement in the following way. He said:-“(a) It argued that insolvency on its part was simply not a breach of, or a failure to comply with, the provisions of the Development Agreement. The Development Agreement does not so provide.(b) Holtglen argued that this becomes clear when one looks at clause 22. Clause 22.1(a) sets out the consequences that flow when there is a breach of the Development Agreement on the part of the Developer. Clause 22.1(b) deals with insolvency, and provides for quite different consequences to flow from that. The fact that breaches were specifically addressed in clause 22.1(a), and that insolvency was also specifically addressed but does not fall within that sub-clause, demonstrates that insolvency is not a breach.

(c) Holtglen suggested that, in arguing on these grounds that it was entitled not to make payments which clause 17 provides, Dunnes Stores was seeking to obtain advantages that would not have been open to it if it had simply terminated for insolvency in accordance with clause 22.1(b). Holtglen argued that, following termination under clause 22, the consequence of clauses 22.3 and 22.4 was that Dunnes Stores would have been entitled to avoid making any further payments, but it would have remained liable to make payments that had already fallen due under clause 17 as of the date of termination. Furthermore, if there had been an attempt to terminate under clause 22.1(b) for insolvency, it was likely that the Funder would have exercised its right to set in (sic). Holtglen pointed out that Dunnes Stores had accepted that it could not refuse to pay under clause 17 in reliance on material but cured breaches but at the same time sought to rely for present purposes on breaches that might not even be material without giving any opportunity to cure.

(d) Holtglen argued that the Development Agreement deals expressly in clause 17.6 with the circumstances in which funding issues would give rise to a breach. That being so, it was suggested, the Development Agreement could not be interpreted so as to apply to funding issues other than those specifically addressed in clause 17.6.

(e) Holtglen argued that, if one accepts that insolvency could be a failure to comply within the meaning of clause 17, then the logical consequence of the argument that had been advanced by Dunnes Stores was that any breach would entitle it to refuse to pay, no matter how minor the breach, unless perhaps it was de minimis. It was suggested that that could not be the proper interpretation of clause 17, which, it was suggested was intended merely to preserve the right of Dunnes Stores to counterclaim for breaches rather than simply to refuse to pay in the event of a breach. Emphasis was laid on the fact that Dunnes Stores had neither sought to terminate nor claimed damages in respect of loss suffered by it as a consequence of the alleged breaches, and on the fact that Dunnes Stores was intending to hold Holtglen to the continuing obligations imposed on it under the Development Agreement while at the same time arguing that it was not obliged to make any payments thereunder.

(f) Finally, Holtglen argued that, even if insolvency was a breach of contract that could give rise to an entitlement to avoid payment only if the contract could be interpreted as requiring entire performance as a condition precedent to payment. It suggested that this would be a commercially absurd result, and reliance was placed in that regard on Analogue (sic) Devices B.V. v. Zurich Insurance Co. [2005] 1 I.R. 274 as demonstrating that contracts should not be interpreted so as to give words meaning which the parties could never have intended that they should have. More importantly, reliance was placed on Hoenig v. Isaacs [1952] 2 All E.R. 175 as demonstrating that the courts would not easily interpret contracts so as to provide that entire performance was a condition precedent of payment.”
Dunnes’ Response
40. Dunnes response to the foregoing was summarised by the arbitrator as follows:-“(a) It argued that it was unreal to say that, simply because clause 22.1(a) dealt specifically with breaches of the Development Agreement, the circumstances of insolvency described in clause 22.1(b) could not constitute a failure to comply.(b) It argued that Hoenig v. Isaacs was not of real assistance. It was clear from the judgments in that case that the real question was always that if whether, on its true construction, entire performance was a condition precedent to payment. The issue here was one of the interpretation of the particular contractual provision in question.

(c) It was emphasised that Dunnes Stores did not argue that every failure to comply gave rise to an entitlement to avoid payments for which clause 17 might otherwise provide. However, if a failure to comply was material and not trivial then there was such a right.

(d) Finally, it argued that the proper interpretation of clause 22.3 and 22.4 meant that, following termination for insolvency, Holtglen would be a great deal worse off that it would be under the interpretation of clause 17 put forward by Dunnes Stores. In the same way, there was no relevance to the fact that there was an opportunity to cure a breach on which reliance was placed upon clause 22.1(a), because the consequences of termination were different from those of non-payment of sums due under clause 17.”
The Arbitrator’s Conclusions
41. In the final part of the award, the arbitrator stated his conclusions as follows:-“21. It was not really in dispute that Dunnes Stores could succeed on its argument as to the proper meaning of clause 17 only if an act of insolvency was to be interpreted as a failure to comply with the provisions of the Development Agreement. There is certainly no express positive obligation to be or to remain solvent, and a failure to be or to remain solvent was not expressly stated to be a breach. This is not determinative of the outcome to this question, because one could no doubt, if it was appropriate to do so, interpret any agreement as inferring or implying an obligation that was not made express.22. In my view, it would not be appropriate to make such an inference or implication. The main reasons for my conclusion in that regard were as follows:-
‘(a) First, the Development Agreement could easily have provided in a positive manner for there to be such an obligation. Equally, it could have provided that a failure to maintain solvency was a breach. The fact that it did neither must be of significance. In a negotiated agreement, one should be wary of unwarranted inference or implication.(b) Secondly, it was of particular significance that the Development Agreement in clause 17.6 imposed obligations of a financial nature on Holtglen, but did not address the issue of solvency. The issue could have been addressed in this clause, but it was not.

(c) Thirdly, there are the provisions of clause 22, upon which both parties had laid considerable emphasis. If it were not for the fact that clause 22.1(b) provided for a right of termination following insolvency, there was really nothing in the Development Agreement to which Dunnes Stores could point as suggesting that insolvency should be treated as a failure to comply with its provisions. However, it seems to me that clause 22 is of quite the opposite tenor. It draws a specific distinction between failures to perform or observe covenants or agreements contained in the Development Agreement on the one hand which were addressed in clause 22.1(a), and insolvency on the other hand which is addressed in clause 22.1(b). They are addressed in different sub-clauses, and have different consequences. One must therefore assume that it was intended to draw some distinction between the two. There is nothing necessarily illogical or commercially senseless about providing that insolvency will give rise to a right to terminate, but it is not otherwise to be treated as a failure to comply so as to give rise (if such is the case) to a right to claim damages or to refuse to perform other obligations for which the Development Agreement provided. In any event, it did not seem to me that one could successfully rely upon a clause that drew a specific distinction between failures to perform on the one hand and insolvency on the other hand as being a reason to argue that the latter must be treated as being the former.
23. I therefore reached the conclusion that insolvency was not a failure to comply for the purposes of clause 17. Once I had done so, I did not need to consider the issues argued between the parties (and recorded above) as to the extent of the failure to comply that would have to be demonstrated, or as to the issue of whether clause 17 is or is not an entire performance clause or as to the wider issue of the consequences under clause 17 of a failure to comply with the provisions of the Development Agreement. Nor did I have to consider the other issues that arose for the purpose of the amendment application. If the insolvency of Holtglen was not a failure to comply with the provisions of the Development Agreement, that these issues did not arise.24. It followed that I was obliged to refuse the application to amend. In doing so, there were two other points that I emphasised. First, I emphasised that I did so entirely on the basis of having decided on the legal merits that the insolvency of Holtglen could not be considered to be a failure to comply within the meaning of the introductory words to clause 17. As pointed out, this rendered it unnecessary to decide the other arguments against the amendment raised by Holtglen. However, without deciding the issues that did not therefore arise, I said that I would otherwise have been most reluctant to refuse Dunnes Stores the opportunity to make its case on the grounds of delay alone, particularly where the case as to prejudice made by Holtglen was so equivocal. I pointed out at the same time that Dunnes Stores had lost nothing by approaching the matter in the manner in which it had. If the amendment had been permitted, there would almost certainly have been a preliminary issue dealing with the same point. The result would have the same (sic), albeit reached in a more roundabout and expensive manner.

25. Secondly, I indicated that I was conscious that Dunnes Stores had put forward its amendment application only as a fallback to its argument that it was not obliged to seek such an amendment, because the issue was already sufficiently covered in the existing pleadings. I had not decided that issue, on the assumption that, in practical terms, the decision that the amendment could not avail Dunnes Stores meant that it equally could not profit from advancing the argument on the basis of un-amended pleadings. I indicated, however, that I was willing to decide that issue, if Dunnes Stores wished me to do so. It was indicated that Dunnes Stores did not require that matter to be decided.

26. In the light of that ruling, it was indicated on behalf of Dunnes Stores that there was no evidence that it wished to call. If the ruling had been to the opposite effect, it intended to call evidence from Liam Grant, Accountant, whose statement had been provided to the other side on 31st August, 2011.”

42. The arbitrator then dealt with a number of matters which have no relevance to this case and held that Holtglen was entitled to succeed. He then dealt with an interest claim and the question of costs. The award concludes with the determination in favour of Holtglen for the amounts already indicated. 
Principles of Construction
43. There is no dispute but that the arbitrator sought to construe the agreement in order to make the award.

44. There is no real dispute between the parties as to the appropriate principles of construction which govern such an exercise.

45. All contractual construction has as its object the discernment of the intention of the parties to the contract. This is done by the interpretation of the terms of a written agreement in the context of its surrounding circumstances. This was succinctly described by Keane J. in Kramer v. Arnold [1997] 3 I.R. 43, where he said:-

“In this case, as in any case where the parties are in disagreement as to what a particular provision of a contract means, the task of the court is to decide what the intention of the parties was, having regard to the language used in the contract itself and the surrounding circumstances.”46. That approach was further endorsed by the Supreme Court in Igote Limited v. Badsey Limited [2001] 4 I.R. 511.47. In Analog Devices v. Zurich Insurance [2005] 1 I.R. 274, Geoghegan J. quoted with approval the principles set out by Lord Hoffmann in Investors Compensation Scheme Limited v. West Bromwich Building Society [1998] 1 WLR 896 as follows:-

“(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.(2) The background was famously referred to by Lord Wilberforce as the ‘matrix of fact’ but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be next mentioned, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.

(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.

(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammar; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meaning of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must for whatever reason, have used the wrong words or syntax: see Mannai Ltd. v. Eagle Star Ass. Co. Ltd. [1997] A.C. 749.

(5) The ‘rule’ that words should be given their ‘natural and ordinary meaning’ reflects the commonsense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Compania S.A. v. Salen Rederierna A.B. [1985] A.C. 191, 201:-
‘If detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense’.”48. These principles were also approved of the by the Supreme Court in Emo Oil Limited v. Sun Alliance & London Insurance Plc. [2009] IESC 2.49. In interpreting the commercial agreement, a court or arbitrator ought to endeavour to give it a commercially sensible construction. This is clear from the views expressed by Lord Steyn in Mannai Investments Limited v. Eagle Star Assurance Company Limited [1997] 3 All E.R. 352, where he said:-

“In determining the meaning of the language of a commercial contract, and unilateral contractual notices, the law therefore generally favours a commercially sensible construction. The reason for this approach is that a commercial construction is more likely to give effect to the intention of the parties. Words are therefore interpreted in the way in which a reasonable commercial person would construe them. And the standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on niceties of language.”50. Lord Steyn’s views having been approved of in this jurisdiction by Clarke J. in BNY Trust Company (Ireland) Limited v. Treasury Holdings [2007] IEHC 271.51. The question of commercial commonsense has most recently attracted the attention of the United Kingdom Supreme Court in Rainy Sky S.A. v. Kookmin Bank [2011] 1 WLR 2900. The defendant bank sought to avoid payment on foot of advance payment bonds. It did so in circumstances where it claimed that the bonds true construction did not encompass the instalments in respect of which repayment was sought. Simon J. in the Commercial Court held that the construction contended for by the bank would give rise to a non-commercial result. His decision was reversed by a majority in the Court of Appeal. His order was restored by the Supreme Court. It held that where parties have used unambiguous language, irrespective of the question of commercial sense, the unambiguous language must be applied. If, however, there is an ambiguity then the court is entitled to construe the contract in the more commercially sensible manner.

52. Lord Clarke said:-

“The language used by the parties will often have more than one potential meaning. I would accept the submission made on behalf of the appellants that the exercise of construction is essentially one unitary exercise in which the court must consider the language used and ascertain what a reasonable person, that is a person who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant. In doing so, the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other.”53. Finally, in the particular context of this case, there is a passage from Chitty on Contracts (30th Ed: 2008) at para. 22-048 which is apposite. The author states:-“The parties may expressly provide in their contract that either of them or one of them is to have an option to terminate the contract. This right of termination may be exercisable upon a breach of contract by the other party (whether or not the breach would amount to a repudiation of the contract) or on the occurrence of a specified event other than a breach or simply at the will of the party upon whom the right is conferred in principle.”54. The principles enunciated above are the ones which the arbitrator was obliged to apply in making his award.55. The thrust of the criticism made against him appears to be that he declined to interpret the agreement as containing or implying an obligation on the part of Holtglen to be and remain solvent. It is also suggested that the arbitrator’s construction which led to the award failed to make business commonsense.

56. It is in this context that I turn to a consideration of these criticisms and my findings in respect of them. 

Criticisms and Findings
57. For the purpose of the exercise conducted by the arbitrator, the insolvency of Holtglen was accepted or assumed. There is, in fact, no dispute on this. The contention that was made was that Holtglen’s insolvency constituted a failure to comply with the agreement and thus, having regard to the terms of clause 17, Holtglen had no entitlement to enforce it against Dunnes. Thus, Dunnes were to be relieved of paying the monies provided for at clause 17 in respect of the work done by Holtglen.

58. It was submitted to the arbitrator that this consequence flowed from the opening words of clause 17. Those words provide as follows:-

“Subject to compliance by the Developer and/or Surety if applicable with the provisions of this Agreement the Company shall pay the Sum and the Further Sum to the Developer or the Surety if applicable in the following manner…”59. Clause 17 is headed “Payments by the Company” i.e. Dunnes.60. The argument made by Dunnes is that it has no liability to make the payments specified under clause 17 because of the insolvency of Holtglen. It’s insolvency is alleged to amount to a failure by Holtglen to comply with the provisions of the agreement. The difficulty with this submission from the point of view of Dunnes is, as was pointed out by the arbitrator, the agreement does not place any obligation on Holtglen to remain solvent. As was also pointed out by the arbitrator, the agreement could easily have provided in a positive manner for there to be such an obligation. Equally, it could have provided that a failure to maintain solvency was a breach. But the agreement did neither. The arbitrator pointed out that in a negotiated agreement, such as this one, one should be wary of unwarranted inference or implication. In my opinion, he was perfectly correct on these issues.

61. The arbitrator also pointed out, as a matter of particular significance, that the agreement in clause 17.6 imposed obligations of a financial nature on Holtglen, but did not address the issue of solvency. That issue could have been addressed in that clause but, as he pointed out, it was not.

62. In my view, no justifiable criticism can be made of the approach taken by the arbitrator as demonstrated at para. 22(a) and (b) of his award. I do not there perceive any error on the face of the record still less one which could be regarded as so fundamental to warrant this Court’s intervention.

63. The arbitrator then proceeded to deal with clause 22 of the agreement. He, in my view correctly, pointed out that were it not for the fact that clause 22.1(b) provided for a right of termination following insolvency, there was nothing in the agreement which Dunnes could point to as suggesting that insolvency should be treated as a failure to comply with its provisions. The arbitrator then carefully analysed clause 22 and pointed out the specific distinction which is drawn in that clause between failures to perform or observe covenants or agreements contained in the agreement on the one hand, which are addressed in clause 22.1(a), and insolvency which is addressed in clause 22.1(b). As these are addressed in different sub-clauses and have different consequences, he pointed out one must assume that it was intended to draw some distinction between the two. He also pointed out that there is nothing necessarily illogical or commercially senseless about providing that insolvency will give rise to a right to terminate, but that it is not otherwise to be treated as a failure to comply so as to give rise to a right to claim damages or to refuse to perform other obligations for which the agreement provided. He went on to point out that one cannot successfully rely upon a clause that draws a specific distinction between failures to perform on the one hand and insolvency on the other as being a reason to argue that the latter must be treated as being the former.

64. Clause 22.1(a) deals with the breach by Holtglen of its obligations under the agreement. It provides what is to happen in such event. Clause 22.1(b) and (c) specify other circumstances which do not involve a breach of the agreement but where Dunnes is given an entitlement to terminate.

65. It is, I believe, quite clear that clause 22.1(a) deals with breaches by Holtglen whereas 22.1(b) and (c) do not. Under clause 22.1(a), a notice may be served whereby Holtglen is given a period within which to remedy the breach. It is only if it fails to remedy the breach that the right to terminate can be exercised. By contrast, the entitlement of Dunnes to terminate for insolvency under clause 22.1(b) arises upon the occurrence of an event of insolvency with no opportunity being made to cure that defect. It is because insolvency is not a breach of the agreement that no provision is made for that to be remedied by Holtglen. It is, however, to be noticed that in the event of Holtglen’s insolvency, termination of the agreement is precluded in the event that the funder exercises its right of substitution.

66. As I have already pointed out in the passage from Chitty on Contracts, parties to a contract may agree that circumstances that do not involve any breach or default on the part of one of them can provide grounds for termination. The agreement here is a good example of such an exercise. But there is no necessary correlation between the existence of a ground for termination and a failure to comply with the provisions of a contract.

67. I am of the view that clause 22.1(b) is directed towards providing Dunnes with an entitlement to terminate in the event of an insolvency event. This enables Dunnes to avoid incurring any future liabilities to Holtglen. But it does not and cannot provide a means by which Dunnes can escape any liabilities previously incurred.

68. This view is, I believe, supported by the fact that the entitlement to terminate in the event of insolvency is not an absolute one. The funder may step in thus avoiding termination. This suggests that the whole object of the clause is to protect Dunnes against the consequences of insolvency into the future. It cannot have been intended to give Dunnes an entitlement to avoid paying for services provided and work done by Holtglen prior to its insolvency.

69. In my view, the criticisms made by Dunnes of the arbitrator are without foundation. The construction sought to be placed upon the agreement by Dunnes, amounts to the conflation of an entitlement to terminate under clause 22.1 and a defence to a claim for payment under clause 17 of the agreement. Clause 22.1 enables Dunnes to avoid incurring future liabilities to an insolvent Holtglen. It does not provide a route for Dunnes to escape liabilities previously incurred.

70. I am unable to accept the criticism made of the arbitrator that he either misinterpreted or had no regard for the commercial purpose underlying the agreement and flouted business commonsense in his award. He did neither.

71. The agreement required Holtglen to construct an anchor store for Dunnes. It did so. It was certified as practically complete as long ago as 10th June, 2009, but Dunnes have only paid a fraction of the sum due for this work. Holtglen’s claim is in respect of monies owed for work done as long ago as 2008 and 2009. The logical outcome of Dunnes’ argument is that it is not required to pay a sum of in excess of €20m even though all of the work the subject of the claim has been carried out and completed. That result is wholly unattractive from the point of view of business commonsense or commercial reality. If Holtglen was to be deprived of payment for the work done by it then very clear contractual language would have to be used to bring about such a result. There is nothing in the agreement supporting such an outcome.

72. In my view, the arbitrator has not been guilty of any error of law in the approach which he took to the construction of this agreement. Even if he erred, there is per O’Donnell J. a “high tolerance for arbitral error” on the part of the court and if there is such an error, it is not one so fundamental that the award cannot be allowed to stand. 

Events Post Award
73. In affidavit evidence which was placed before the court, I was apprised that on 9th January, 2012, Dunnes served a notice on Bank of Ireland as the funder under the agreement pursuant to clause 22.2. By that notice, Dunnes asserted a right to terminate the agreement on the expiration of 60 days from the date of its service. It also notified the funder of its rights to step in for Holtglen as the developer under the agreement. Holtglen’s loans with Bank of Ireland were transferred to the National Asset Management Agency (NAMA) on 28th October, 2010. A decision on whether or not to step in therefore fell to be taken by that agency.

74. On the evening of 13th February, 2012, (being the day before the original listing of this matter for hearing) National Asset Loan Management Limited (NALM) (a subsidiary of NAMA) served a notice of substitution pursuant to clause 22.2 of the agreement. The notice is in the following terms:-

“Holtglen Limited (‘Holtglen’)/Deerland Construction Limited (‘Deerland’)Development Agreement dated 13th June, 2007 between (1) Dunnes Stores; (2) Holtglen (Developer); (3) Deerland (the Surety)(hereinafter referred to as the ‘Development Agreement’)

Ferrybank Shopping Centre, Ferrybank, Co. Kilkenny

Notice of Substitution issued pursuant to clause 22.2 of the Development Agreement

Dear Sirs

We refer to your letter dated 9 January 2012 address (sic) to the Governor and Company of the Bank of Ireland (‘the Funder’).

The credit facilities afforded by the Funder to Deerland and Holtglen and all related security rights, assets and interests have transferred to National Asset Loan Management Limited (‘NALM’), being a subsidiary of the National Asset Management Agency pursuant to the National Asset Management Agency Act 2009 (the ‘NAMA Act’) and are hereby certified by NALM in accordance with section 108 of the NAMA Act as being ‘acquired bank assets’ for the purposes of the NAMA Act. The Funder has consequently passed to NALM a copy of your letter of 9 January 2012.

Having acquired the said bank assets, NALM is entitled to exercise all rights and powers of the Funder arising pursuant to the Development Agreement.

Accordingly as successor to the Funder and by virtue of section 99 of the NAMA Act, we hereby give notice pursuant to clause 22.2 of the Development Agreement substituting NALM for Holtglen as Developer under the Development Agreement.

Please note:
(a) Consequent on the service of this Notice of Substitution, Dunnes Stores is required to accept the instructions of NALM to the exclusion of Holtglen and/or Deerland in respect of the performance of the Development Agreement upon the terms and conditions of the Development Agreement.(b) All obligations of Dunnes Stores to Holtglen under the Agreement, whether in respect of matters arising before or after the giving of this Notice of Substitution are deemed to be obligations to NALM as if it had at all times been a party to the Development Agreement in place of Holtglen.

(c) All obligations of Holtglen to Dunnes Stores under the Development Agreement whether in respect of matters arising before or after the giving of this Notice of Substitution shall be deemed to be obligations of NALM as if it had at all times been a party to the Development Agreement in place of Holtglen.
Please acknowledge receipt of this Notice of Substitution.Executed under the common seal of National Asset Loan Management Limited.”

75. Given the late service of that notice, I was asked to adjourn the hearing of this application so as to enable Dunnes to consider the implications of it. I did so and the matter proceeded to hearing on 17th February, 2012.76. I am of the view that having regard to that notice and in particular what is contained at sub-paragraph (c) thereof that the whole question of the insolvency of Holtglen has now become an irrelevance. It also means that any concerns that Dunnes may have in relation to future obligations not being honoured have evaporated. Despite that, Dunnes insisted that the issues raised by them in this challenge to the award should proceed.

77. I have considered that challenge on its merits and without reference to the events which took place subsequent to the award being published. Dunnes have failed in that challenge.

78. Even if they had succeeded, I would have ordered the matter to be remitted for further consideration by the arbitrator. Were that to have occurred, it is clear from the terms of the NALM notice of 13th February, 2012, that no factual or practical issue of insolvency could arise for consideration by the arbitrator.

79. The challenge of Dunnes fails. The application to set aside the arbitrator’s award is dismissed.

Annual report of Chairman of CIArb Ireland.

Chartered Institute of Arbitrators (Irish Branch)

Chairman’s Annual Report 2011 2012 (Edited)

(My term of office as Chairman came to an end on May 16th 2012. Thanks to all for a great honour and a most fulfilling experience)


The year under review, like a great deal else in Ireland in recent times has been dominated by issues arising from or the fallout of the recession.

It affected participation in branch events, take up on training and other events and on membership itself. And yet paradoxically as business strives for improved ways of avoiding and resolving disputes the services we offer may come in to their own.

My purpose in this report is twofold.

The first is to give members of the Institute in Ireland a picture of what their committee has been doing for the last year.

The second is to offer my own brief assessment of where the Irish branch is going after  my three years of very close involvement with the institute.

The Committee

The committee of the branch held eleven ordinary meetings and one special meeting. Attendance at meetings is excellent with an average attendance of 10 meetings.

Events & Training

The following is a brief list of the main events undertaken by the committee in the course of the year since the AGM 2011m Transnational Mediation, Belfast, September, International Young Arbitrators event, Distillery Building, Dublin November,International Commercial Arbitration Course, Malahide, 9th May 2011
, Introduction to Mediation  Engineers Ireland  May, Accredited Mediation Training, Stillorgan, June 2011, Debt mediation seminar IPA Dublin June, Evening at Hugh Lane Gallery (with CPLA) July, Award Writing (with the Law Society) Blackhall Place September, ADR in Australia; lessons for Ireland,  Doug Jones Radisson Hotel Dublin November, Introduction to Arbitration (Ethiopia) February, Workplace Mediation Training (x 2) Lynn House Dublin, 2010 Arbitration Act Mason Hayes & Curran Dublin March (Young Members Group), Marketing your Mediation Practice April Lynn House April.

Annual Golf competition, Greystones, June, Annual Dinner, Westbury Hotel November

In pipeline

Accredited Mediator course June 7th  (confirmed)

Kenneth McQuillan lecture (advanced, due May)

YMG Event Arthur Cox April 30th

YMG event Coolock July 2nd

It is worth highlighting the two major conferences; on transnational mediation with the NI Chapter in Belfast and an International Young Arbitrators event at which delegates from 20 countries attended. The attendance at the Belfast event was disappointing but the event was excellent with a high quality panel of speakers including Mr Justice John Gillen, judge of the N.Ireland High court.

It is hoped that the Chapter will hold a regular event in the future and one is currently under planning.

I wish to record a special word of thanks to members of the branch who are not on the committee who assisted with these events.

Especially to Arran Dowling-Hussey for his contribution to the Young Member’s conference in November and the YMG events. To John O’Brien for the golf and to all members of sub committees

Legislation Issues

The Main issues on which the Branch was engaged were the Construction Contracts Bill and latterly the scheme for Mediation Bill. Submissions were made on both matters; to the Minister in the first case and to the Oireachtas committee on Justice, who we will be meeting on May 9th

The Construction sub committee has been giving consideration to how we should best respond to the enactment of the Adjudication Bill and a detailed submission was sent to the Minister in January.

Again the input of committee members and others into both these documents should be acknowledged.

Both submissions are available on the website


Regular press statements were issued during the year; in relation to various events and also on the Construction Contracts and Mediation legislation.

Our new website, while it receives quite a lot of traffic is not delivering on its potential for a reason that is common to much of the deficits on our work; lack of manpower resources to update and market it. Nonetheless, it remains a vital tool.

Despite living in the digital age we continue to get requests from members for something in hard copy and did produce one issue of our newsletter during the year; the first since 2010 and a second is imminent.


The number of appointments made fell somewhat on the previous year but that was unusually high compared to previous years.

I return below to the issue of building the Institute as the point of ‘first call’ for ADR users in Ireland which is the real issue.

The Dublin Dispute Resolution Centre

Beginning in the term of office of my predecessor Terence O’Keeffe an idea was under discussion to create a Dublin Dispute resolution centre which would provide a focal point for arbitrations, mediation etc in Ireland and also offer a launch pad for the campaign to develop Dublin as a seat for international arbitrations.

I am very happy to report that following an input of very considerable time and effort by many people this project is reaching fruition.

It involves a significant refurbishment of the Arbitration centre in the Distillery building and the creation of a new joint venture between CIArb and the Bar Council to manage and develop the project which is soon to be finalised.

There will be an investment by both parties in the venture and it will be directed and run by a new company with the two bodies as joint shareholders.

Our discussions have involved a rigorous review of the proposed business plan for the project and the application of the considerable planning and architectural talent at our disposal on, and via the committee on the refurbishment.

We have taken, or are still in the process of taking independent business and legal advice on all relevant aspect of the projects and it has the strong support of the committee.

This is more than a commercial venture. It brings the Institute into a strategic alliance with the Bar and allows us to promote and position CIArb as the prime independent centre for dispute resolution.

CIArb is being challenged on its flanks on one side by CEDR and in the mediation space by MII. We need to respond to this in the way any business would.

This falls within the strategy we have been evolving to extend our reach into the business community and the professions, and for example to become the preferred supplier of training and CPD in alternative dispute resolution.

The option of relocating the branch office to the Distillery building is also under discussion.

Looking to the future

Fellow members,

I have spent my career working for membership organisations. I understand well the mix of factors that determine why a person will join, remain a member and in some cases leave.

It is rarely a simple financial calculation, although this depends. But at some point the question as to whether, in the very broadest sense it is ‘value for money’ arises.

I offer the following thoughts on the direction ahead I see for the branch.

They fall under three headings.

We need to develop our capacity for the highest level training we can on this island, what we refer to as our faculty. Some progress was made during the year but more is needed.

Next, how we build the brand and the services of CIArb. Can this be done on the basis of our existing governance model.

Or do we examine greater professionalisation of our management and the marketing of  our suite of services to Irish business and the professions

Our strengths lie in a diverse membership of people hugely interested in ADR and who possess enormous expertise in the subject. They have a huge commitment to the brand that is CIArb.

The opportunity presented now as ADR goes ‘mainstream’ is to push CIArb to the forefront of the organisations in the field and it is there for the taking. Indeed, I would say that our ambition in this regard is limited only by a lack of resources which even the most dedicated committee of volunteers will have trouble bridging.

I see no reason why the appointments being made by future Chairmen should not be in the hundreds. Business organisations in the main, but solicitors and others are the key here. Communicating the message that ADR is good for business and that CIArb is a logical partner in delivering those outcomes requires no new science to bring it to fruition.

As we move into partnership in the Dispute Resolution project; a professional business, we need to consider professionalising other aspects of our work including marketing; developing a commercial focus, making a real impact with Irish business and delivering on the value for money I spoke about earlier and which members expect and are entitled to expect.

These then are the questions. Some of the answers are fairly obvious although agreeing and implementing them will require careful thought and may pose some fairly fundamental questions about how the branch is resourced in Ireland within the overall CIArb family.

As Chairman I tried within the limits of an honorary, if onerous role to lead the Institute in the direction of building new partnerships, promoting the message that ADR is good for business and that CIArb is good for ADR.

Regarding our membership of the global brand that is CIArb this is a huge advantage  to us. However, there are aspects of how the relationship with London works that need to be reviewed.

The decision to increase membership subscriptions in the middle of a recession and the manner it was done showed some detachment from reality, to be frank.  We have a new Director-General now Mr Anthony Abrahams to whom I send our best wishes and urge him to join us in ironing out some of these issues.

While our paper membership remains at just under 750, those members are proving very slow to renew this year. Increasing their subscription was hardly a help.

CIArb in Ireland is a well of such potential to current and future members that some of the things I have referred to are vital for the future prosperity of the branch and its members, and more importantly of alternative dispute resolution in Ireland.

In conclusion, I wish to thank all who made my term in office enjoyable; my immediate predecessors in the Chair, and on whose committees I served and learned, the current committee members and sub committee members.

Also to Kate our administrator a big thank you.

It has been a privilege to serve as your Chairman that I will always treasure.

Pat Brady


CIArb presentation on Mediation Bill to Oireachtas joint ctte on Justice

Remarks by CIArb Chairman, Pat Brady

Mr Chairman, Deputies and Senators,

Thank you for inviting us here today.

As you will have seen the CIArb is a worldwide body and the largest of its kind solely dedicated to alternative dispute resolution, (ADR) including here in Ireland.

While we have outlined our comments on the Bill, which in general we welcome and will be happy to answer any questions I thought it might be helpful to the committee to make some general comments on alternative dispute resolution which might provide context and also indicate the opportunity represented by the Mediation Bill.

ADR including mediation has a long tradition, some would say back to Solomon,  the Romans had an arbitration system known as the compromessum, Chaucer refers to a mediator in the Canterbury Tales (appropriately named Prudence) and the first arbitration board in history, some say, was set up in Dublin in 1705, the Ouzel Galley Society.

And surveying the current landscape there is increasing acceptance of the potential of ADR as a means of providing effective, quick and cheap solutions to problems arising in business, in the workplace, and elsewhere.

Just looking briefly at some recent, and some imminent developments.

In 2010 we had a new Arbitration Act. This strengthened the power of the arbitrator, and therefore the arbitration and limited the extent of court intervention and supervision.

The Construction Contracts Bill which had its second reading in the House on May 3rd aims to provide rapid, binding, if interim solutions to disputes arising in the construction sector.

We have transposed on both parts of the island, here in the Republic in 2011 the EU Directive on transnational mediation.

Somewhat outside this process the government is radically overhauling the disputes resolution machinery in relation to employment rights and disputes.

One of our members, Bill Holohan, produced a comprehensive document in relation to ADR in Ireland entitled “ADR in Ireland, 2010 and Beyond”, for the benefit of the Diploma Programme of the Law Society, and we will leave a copy of that with you, which will give you a complete overview.

In the context of EU developments it is also worth noting that by January 2015 two further measures are proposed to give consumers access to alternative dispute resolution ‘vehicles’ as the papers refer to it, in relation to complaints one of these specifically related to on-line purchases. Of course, this in addition to existing statutory protections.

And indeed this is the point. There is a recognition in all these initiatives that traditional legal remedies are insufficiently effective, either because they are too cumbersome or too costly. (The EU estimates that unresolved customer complaints cost 0.4% of EU GDP).

While the Oireachtas Committee must understandably address the detail in the Bill and we will turn to that briefly in a moment, we have concerns that the great potential represented by this movement may fail to realise its potential for the want of public awareness of its availability and potential.

Part of the mission of CIArb is to promote ADR and in meetings with a wide cross section of business, trade union and other players the overwhelming reaction to the thought that effective ADR clauses might be an insurance policy against litigation is incredulity, even among legal practitioners, who ought to know better. This is obviously in the context of sectors where it has not been tradition to use ADR, which is most of them.

In November 2012 we held an event with the World President of CIArb Professor Doug Jones on the topic “ADR in Australia; lessons for Ireland.” The biggest lesson to emerge from this was that in Australia ADR, mediation, arbitration is primarily client driven. Clients tell lawyers they want mediation or other ADR vehicles, not the other way around. We believe that that is the way things should be, and we should move towards educating the public who will inform the lawyers.

The welcome provisions in this bill requiring lawyers to inform clients of the ADR option and mediation in particular are only one half of the picture. Business organisations, consumer groups, citizens advice services, the trade union movement need to be brought up to a point where they clearly and fully understand the potential of this Bill to make their lives easier when disputes arise.

When the Automatic Referral to Mediation Pilot Scheme was introduced at London Central County Court research (by Prof Hazel Genn, 1998*) showed that in approximately 80% of cases one or both parties objected to it.

“Other research shows that people are not as enthusiastic about mediation as the government, the judges and the mediation community think they ought to be’ Paul Randolph, New Law Journal April 2010

I now invite my colleague Bill Holohan to comment further

I am a practising solicitor and I have been for almost 30 years and a Fellow of the Chartered Institute of Arbitrators. However, I appear before you today, so to speak, as a repentant solicitor and arbitrator.

Having spent many years engaging in litigation, and having studied Sun Tzu’s “The Art of War” with a view to becoming effective in legal battles, and having also learned one of the lessons of Machiavelli that one should never leave a wounded prince on the battlefield, I came to the conclusion about five years ago that there had to be a better way.

Padraig Pearse said that education was the murder machine. He was wrong. Litigation and the legal system is the murder machine. I’ve seen people bitterly divided as a result, not just of the issues that drive them to litigation in the first instance, but because of the litigation process itself and I have seen this in the areas of family disputes, commercial disputes, partnerships, franchisors, neighbours, the voluntary sector, etc.

Having had a Pauline conversion, I became an Accredited Mediator five years ago, and a strong advocate of mediation in particular, as the preferred ADR method. I was one of the founders of the Group and since being elected to the Committee of the Chartered Institute have worked on mediation issues in particular.

If I can headline one aspect of the Bill, in particular, it would be this.

We need to ensure that clients are fully informed, not only about the ADR option and mediation in particular, but more particularly, how effective it can be, and the benefits of it in terms of savings on legal costs, time, energy, and emotion that could be better directed elsewhere.

Consequently, it would not be enough simply to have a provision in the bill requiring that a solicitor certify that they had “discussed with” or “informed” the client about the ADR option, as is the situation in family law, legislation, for example.

The client should be required to swear an affidavit, confirming that not only have they considered the ADR option, but they have discounted/disregarded it for specified reasons, and that should ultimately be taken into account, in the event of the matter proceeding to litigation. You cannot force the horses to drink, but there should be ample opportunity for the horses to linger by the lakeside and appreciate the opportunity.

(Anne-Marie Blayney then addressed some of the specific points on the Bill in our submission as outlined in previous blog)

*“The Central London County Court – Pilot Mediation Scheme Evaluation Report”, Lord Chancellor’s Department Research Series No. 5/98

Press Statement from CIArb Irish Branch on Mediation Bill

Press Statement

 The Irish Branch of the world’s largest dispute resolution body, the Chartered Institute of Arbitrators has given a warm welcome to the publication this week of the outline of the Mediation Bill. The Irish branch of CIArb has about 750 members qualified in all areas of dispute resolution, (including mediation, arbitration, conciliation and adjudication).

This follows the Law Reform Commission Report in 2010 and commitments in the Programme for Government to improving dispute resolution and reducing legal costs.

Pat Brady, Chairman of the Irish Branch of CIArb commented;

This is an important day for Irish business. It would be easy to underestimate the significance of the statutory underpinning of mediation as a means of resolving disputes throughout the economy, in family and employment matters also.

Professional mediators, such as our mediator members, deploy a range of skills and techniques which, in the vast majority of cases, aid parties in dispute to resolve their differences in a positive way, that not only keeps them out of the courts and away from crippling legal costs, but which can sometimes avoid the negative destruction of relationships. Many judges have spoken strongly in favour of mediation, not simply as an alternative to the legal system but increasingly as a vital part of it in achieving justice for those involved.

We welcome the provision for lawyers and the courts to encourage parties into mediation, (with a possibility of financial consequences if they do not).

The following are highlights in the proposed Bill:

  • Solicitors and barristers must tell clients about the possibility of using mediation as an alternative to commencing court proceedings;
  • Confidentiality is required in all communications between parties to mediation;
  • Participation in and conclusion of mediation will be voluntary;
  • A statutory basis for the courts to invite parties to consider mediation and to adjourn court proceedings for the duration of the process.
  • A requirement that mediators advise parties of their qualifications.

Mr Brady especially welcomed the requirement that mediators have high level and specialised training and operate under a code of conduct.

‘CIArb accredited mediators are trained to an international standard and operate under the Institute’s Code of Conduct and its Charter, and we provide additional training in workplace mediation for example. We will be making a submission to the Oireachtas committee on Justice & Equality in due course on operational aspects of the Bill’

he concluded.


Further Info: Pat Brady 086 258 7940

CIArb 01 707 9739,

Anne-Marie Blaney 087 60 2262.

Interested in qualifying as an accredited mediator?

The Chartered Institute of Arbitrators offers training to those wishing to become accredited commercial mediators and offers the option of membership of the CIArb.

CIArb is the largest dispute resolution body in the world and the Irish branch has some 700 members.

The course is run by the Institute’s approved trainers Facilit8 led by acclaimed mediator Amanda Bucklow and starts on March 5th running for 6 days (one rest day) with the assessment taking place over the weekend of March 24th.

The course is independently assessed, i.e. not by those delivering the training; a distinctly important consideration,

On our last course one of the participants was Mr Justice Paul Gilligan, judge of the High Court, (I should say successful participants as the pic confirms. Judge Gilligan receiving his certificate form International President Doug Jones, watched by Irish branch Chairman…yours truly!)

if you are interested contact the Dublin office of CIArb at or

Successful completion of the course opens the pathway to membership of CIArb.

“it’s a great course! It’ll change how you look at the world”

CIArb submission to Minister Hayes on Construction Contracts Bill

This is the text of a letter sent to Brian Hayes TD, Minister of State for Public Service Reform & the OPW about the Construction Contracts Bill 2010.

Dear Minister Hayes,

We refer to the Construction Contracts Bill 2010 (CCB), the associated Regulatory Impact Analysis (RIA) and the earlier consultation meeting with your offices on 28th June 2011. We have reviewed both documents and wish to contribute further to the discussion regarding this importance piece of legislation.

The Chartered Institute of Arbitrators is a global professional body, with a membership drawn from the broadest range of primary professions, including law, engineering, architecture, surveying, and other branches of the construction industry. We operate according to a governing charter, which, for the purposes of this discussion, includes two principle objectives paraphrased as follows:

q  The promotion of Private Dispute Resolution, in all its varying forms, including mediation, adjudication and arbitration; and

q  The training and encouragement of suitable individuals to become qualified and proficient dispute resolution practitioners.

We also currently provide training in adjudication, in other jurisdictions with similar legislation, and would intend to provide similar tailored courses in this jurisdiction, in the event that the legislation comes into force.

As a consequence of the above we are naturally supportive of adjudication as a Private Dispute Resolution process, and believe that it can be successful in achieving the purpose of the bill, which is described as “…. to help address the issue of non-payment to construction sector contractors, subcontractors and sub-subcontractors  who have completed work on construction projects…”.

We have reviewed both the CCB and the RIA with great interest and we make the following comments, which we hope will assist the final detailing of the legislation.

 Status of Adjudication within the Irish Legal System.

The adjudication process is not intended to produce a final decision, in the manner of an arbitration, for example. Consequently its intended status within the overall dispute resolution framework should be clearly stated in the explanatory memorandum. As an example we consider it unlikely that it is intended that Consumers in small cases would be obliged to engage in an adjudication process, and be denied access to the Small Claims Court. Similarly it may be worthwhile to consider whether very large disputes should be obliged to use the adjudication process, in preference to other options, such as the case management skills of the Commercial Court or the alternative process of arbitration, which while slower than adjudication has the benefit of finality.

A clear statement as to where adjudication is intended to sit within the available legal processes would, in our opinion, greatly facilitate the drafting of the legislation and place the threshold values identified in Section 2 of the Bill in a clearer context.

We are also strongly of the view that any threshold values should be expressed within the terms of the value of the dispute, rather than the value of the contract, in a manner similar to the courts hierarchy.

  1. Adjudicator’s Decision to be Non-Binding

The CCB proposes that the adjudicator’s decision be non-binding, in the event that the decision is referred to arbitration or other legal proceedings. The RIA considers this point further and notes that “as the legislation is currently drafted it favours the payer”.

We are of the view that if the adjudicator’s decision is not binding and payment of an award is not compulsory, then this will significantly undermine the primary purpose of the bill. A mechanism for the swift resolution of payment disputes, must result in payment following the adjudicator’s decision, if it is to be effective.

  1. Public Private Partnership Contracts

Section 2.3 of the CCB proposes to exclude PPP contracts from the legislation. We are not clear why such contracts would be excluded as a group and believe that this should be reconsidered.

  1. Status of Contracts with Public Bodies

The RIA, when analysing the non-binding nature of the adjudicator’s decision under the CCB, suggests that one alternative might be “to have a two pillared approach with differing arrangements for public and private contracts”. The RIA also notes that in this event the conciliation process in the Public Works Contracts, which is described as being similar to adjudication, would apply instead.

The RIA provides some background to this philosophy, noting that there is a need to strike a balance between the resolution of payment disputes and the safeguarding of public monies.

We have a number of significant concerns regarding this potential strategy.

Firstly this suggests a fundamental lack of belief in the adjudication process, and that there is a significant probability that the payer will be wrongly obliged to pay funds, which a later process will overturn.

We believe that this concern is misplaced. An adjudicator will only award money, where the payer has obtained the benefit of the payees productivity, and has not honoured a contractual obligation. It is probable that a later arbitration or legal process will overturn some adjudication decisions. However it should not be expected that this would be the norm, or even a regular occurrence.

We believe that if the adjudication process is to be introduced into Irish law, then it should be trusted to deliver the correct decision.

Secondly the public works conciliation process, referred to in the RIA, where payment of a conciliator’s award is dependent upon the production of a bond, does not apply to all Public Bodies construction contracts. As an example consultancy contracts, smaller works contracts and PPP contracts do not currently have this conciliation procedure. Such contracts could thus be inadvertently excluded from any adjudication or conciliation process. If an alternative process is to be proposed, then it should be incorporated into the legislation, otherwise there will inevitably be contracts formed with public bodies, which having differing or no provision for an adjudication process.

Thirdly we are strongly of the view that there should be consistency throughout a chain of contracts. Consequently if a different procedure is to apply to “Public Works Contracts”, then that procedure should also apply to all associated sub-contracts. Failure to legislate for such a consistent approach could quite easily have unintended and unforeseen consequences, which would undermine the effectiveness of the legislation. As an example one possibility, as the legislation is currently drafted, might be to shift the current cash flow burden from sub-contractors to main contractors. Such a scenario could potentially favour larger  and better resourced contractors, when competing for public works contracts, at the expense of small and medium enterprises (SME’s), which would be contrary to current Irish and EU policy.

In addition the need for consistency throughout the chain of contracts further reinforces our view that any alternative process should be included within the legislation.

Finally, having considered the issue in its totality, particularly:

q     the need to have a single process covering a complete chain of contracts, from the contract with the primary client, down to the smallest oral sub-contracts;

q     the desirability for a single adjudication process within the law, in the absence of any compelling reason for treating different types of contracting parties differently; and

q     the certain impracticalities that would arise in the resolution of sub-contract disputes, in the event that adjudication awards were to be backed up by a bond.

We are of the view that the only practicable and sustainable solution is to have a common procedure, which would apply to all contracts, whether with Public Bodies or not.

  1. Definition of Irish Construction Contracts

Section 2(5)(a) states that the legislation will apply to construction contracts, even if Irish law does not otherwise apply to the contract. However it is not clear in the legislation as to how an Irish Construction Contract is to be defined, whether by the identity of the parties, the locations of the businesses, or the location of the construction works.

The legislation, as currently drafted, would oblige the courts to establish this definition, for example whether an Irish Sub-Contractor working for an Irish Main Contractor on a French construction site, would be subject to this act, or not.

We believe that this issue should be clarified within the legislation.

  1. Payment Conditional on an Act by a Third Party

Section 3(5) does not appear to be compatible with many model contract forms used in the construction industry, whereby payment is conditional on the amount being certified by an engineer, architect, project manager or similar.

  1. Entitlement to Suspend

Section 5(3)(b) of the legislation limits the entitlement of a party, who has not been paid, to suspend work for a maximum period of fourteen days, We are not clear as to why the entitlement to suspend should be limited in this way. However there may be merit in including a requirement that a party suspending the work, is obliged to refer the dispute to adjudication at the same time.

  1. Data Collection & Review

We would support the proposal, in Section 6 of the RIA, that provision should be made for the collection, analysis and publication of data. Although we would recommend that any data should be collected in an anonymised and summarised form.

  1. Inclusion of Supplies

The RIA notes that some of the consultees requested that adjudication also be extended to include contracts for the supply of materials, particularly where those materials are either bespoke supplies, or alternatively have been incorporated into the works.

We do not see any reason why such contracts could not be included within the scope of the legislation.

Finally we would like to thank you for the opportunity to contribute to the development of this welcome piece of legislation and trust that you will find our submission of interest. We would also seek to be involved in the preparation of the Code of Practice for Adjudicators proposed under Section 9, in due course.

We are available to discuss these matters in greater detail if desired,

Yours sincerely,

Pat Brady,  


CIArb Irish Branch

International Arbitration Conference; Opening remarks

Introductory remarks by Pat Brady, Chair of the Irish Branch at Inaugural conference of CIArb Young Members group, at the Distillery Building, Dublin, November 11th, 2011.

Your Honour Judge Kelly, Ladies and gentlemen

It’s a very great privilege and a pleasure to welcome all our visitors to Dublin for the first ever international conference of young members of the Chartered Institute of Arbitrators, and of course to welcome members of the Institute of all ages, and other participants in todays event.

This meeting is therefore a historic day for the Chartered Institute of Arbitrators.

Today also sees the inauguration ceremony for our ninth President and Head of State.

So the theme of ‘new beginnings’ might be a good one as we start out on our conference.

Of course this is a special day in the history of conflict resolution also; the eleventh day of the eleventh month commemorating the end of one of the bloodiest battles in modern history, acquiring the added poignancy this year if being 11.11.11.

But before addressing that theme this gathering of CIArb members representing as we do over 20 jurisdictions underpins some of the traditions of our Institute as a global body; a global community of practitioners of alternative dispute resolution shortly approaching its 100th birthday!

We can go further back in this City to one of the oldest arbitration bodies in the world which was formed in this city in 1705; ‘The Ouzel Galley Society’.

We are delighted to have the World President, Professor Doug Jones here as an honoured guest and participant.

Indeed Professor Jones is going to have a very busy couple of days and we look forward to drawing on his expertise and experience as we do with all our guest speakers and participants. In particular I might mention that tomorrow morning Doug will make a presentation on Mediation in Australia: What Can Ireland Learn from Australia’s Promotion of Mediation?” at the Radisson Hotel, not far from here.

The organising committee has worked hard to pull together an impressive programme and I congratulate them on the work they have done. I am confident you will see the outcome of their efforts as the day rolls on and I’m sure you will agree that it has been well rewarded

As we gather as members of the Chartered Institute of Arbitrators, there is a question I wish to pose. Indeed non-members of the Institute might be just as interested in the answer to the question.

What makes the CIArb different?

In some ways an event such as this helps answer the question as it illuminates one of the great strengths of the CIArb. We are a worldwide body with a presence in over 100 countries; an organisation of 12,000 members, 750 of those here in Ireland.

This is represented in one of the themes of today’s conference;  ‘International Best Practice: What can arbitral seats learn from one another?

Our standards are tested against the highest of benchmarks and the best standards of the international legal, business and dispute resolution community.

I had reason to consult the Institute core document known as ’The Guidance ‘ this week. Anyone who doubts the rigorous requirements we place on our members should have a look at its 92 pages of standards. This provides the necessary reassurance to those who rely on our services that a third party neutral appointed by us has achieved a standard of training and subscribes to a code of professional and ethical conduct in which parties can place their trust.

All of you attending today, but especially the members of the Young Members Group are showing by your presence your determination to pursue the highest standards of your profession as arbitrators, adjudicators or other third party neutrals.

So I hope that this conference is the first of the new beginnings and that another branch of the Institute will want to host number two in the series.

Another beginning for us in Ireland, and while not the subject of this conference I might digress briefly to mention that our government will next year introduce legislation to regulate the practise of mediation for the first time.

This is on foot of the report of the Law Reform Commission last year.

The Irish Branch welcomes this development but it will raise many issues not least of which will be how the standard will be set for the status of ‘Accredited Mediator’.

This is important.

In its report on mediation the Law Reform Commission stressed that it was important that the mediation option should not be seen as ‘second class justice’.

As many observers have noted mediation is part of the justice system not apart from it.

Clearly those who practise as mediators, just as with arbitrators should be expected to reach a standard such as that which this institute lays down and no less, if this public confidence is to be first attained and then retained.

All organisations involved in mediation need to remember that the primary object of the exercise is to serve the citizen in need of mediation services and we would all do well to reflect on how best we might contribute to that objective in the manner we promote our services.

Turning to other beginnings what else is new in the world of ADR?

It appears we are almost definitely going to see the introduction of a form of adjudication into the construction sector in Ireland, although what form exactly that will take remains to be seen.

Some of the existing proposals have been the subject of serious criticism by professionals in the construction professions and most recently by one of my predecessors of some years ago as Chairman of the Irish Branch and the current Chair of the Engineers Ireland dispute resolution Panel Ciaran Fahy.

In a paper delivered this week and not yet published Mr Fahy is strongly critical of the proposals in relation to costs, the ambitious nature of timeframes and other matters.

And of course this development in an industry where arbitration has traditionally been a vital tool for dispute resolution raises issues about the future of arbitration itself in that sector. Experience in the United Kingdom would indicate that such fears are not without foundation.

Do we need some new beginnings in arbitration itself that will make it more effective, more efficient and more economical? There are many existing models to look at but recessionary times have forced quite a lot of re-thinking about models that were discarded in the past. Perhaps we need to look at some of ours.

But while we can look backwards to 1705 for arbitration in Ireland it is much more important that we remain focused on the future and with colleagues from across the gamut of ADR practitioners we strongly support the campaign by Arbitration Ireland to see Dublin develop as a seat for international arbitration.

We have many attractions to potential parties.

Ireland has just last year modernised its arbitration law and has now embraced the Uncitral model, about which you will hear more detail later as one of the themes of the conference is ‘Evolving practice under the New York Convention’.  We have other advantages also as an English speaking country with an increasingly competitive cost base, good communications and travel links and common law-experienced lawyers and neutrals.

We hope that many of you will consider Ireland as a future venue for international arbitration, although of course we will be delighted to see you for any reason!

Before concluding I want to thank all of you who made this day possible; a hard working committee of the young members group under its Chairman Goncalo Malheiro from Portugal, the team in Bloomsbury Square and especially Sue McLaughlin, all of our distinguished speakers, our sponsors, Beauchamps, the CPLA, Lewis & Barnes, The Bar Council of Ireland and BLG (and later Maples and Calder.

On the Irish Branch Committee I want to thank Dermot Durack who led for the committee and the indefatigable Arran Dowling Hussey, both of whom did a prodigious amount of work.

Ladies and Gentlemen, we are very honoured to have as our first guest Mr Justice Peter Kelly.

Judge Kelly is the judge assigned under the Irish Arbitration Act 2010 and who deals with cases arising under the act.

However he is a very powerful voice for alternative dispute resolution, both by virtue of his eminent position as a member of the judiciary, but if anything even more so by virtue of the persuasive power of his advocacy of its merits and its potential contribution to better dispute resolution.

Its my pleasure to introduce Mr Justice Peter Kelly, judge of the High Court

CIArb Ireland Conference on Mediation & ADR in Cross border context


Irish Branch

presents a conference


Programme includes:

Key Note Address – David Ford MLA, Minister for Justice

The ‘Mediation Directive’ : EU cross border mediation – Nicola White BL

NI/RoI Employment Dispute Resolution : a comparison – Ciara Fulton, Tughans

ADR in Sport, north & south ‐ Dr Jack Anderson, Law Faculty, QUB

ADR in Construction : the adjudication process – Edward Quigg, Quigg Golden

A Judicial Perspective – The Honourable Mr Justice Gillen

What next for ADR? The president’s view – Brian Speers, The Law Society

Bookings: Cost: £75 or €75 per delegate For booking arrangements and confirmations please contact Mr Jarlath Kearney, Events Coordinator at:

Tel: +44 (0)2890 321022 & +353 (0)1 676 6744 Fax: +44 (0)2890 321023 Cheques payable to ‘CIArb NI Chapter’ Alternatively, book online at

Date: 1030 – 1700, Thursday 29 September 2011 Venue: The Hilton Belfast, Lanyon Place Keynote speaker: David Ford MLA, Minister of Justice

Quigg Golden Limited 1 ‐ 3 Brunswick Street Belfast BT2 7GE or via