REPUBLIC OF TRINIDAD AND TOBAGO In The High Court Of .

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REPUBLIC OF TRINIDAD AND TOBAGOIn the High Court of JusticeClaim No. CV2017 – 01397BetweenKALL CO. LIMITEDClaimantANDEDUCATION FACILITIES COMPANY LIMITEDDefendantAppearances:Claimant:Jagdeo Singh and Kiel Taklalsingh instructed by Karina SinghDefendant:Keith Scotland, Jacqueline Chang and Asha Watkins-Montserininstructed by Keisha Kydd-HannibalBefore The Honorable Mr. Justice Devindra RampersadDated the 10th day of January 2018RULING ON APPLICATION FOR STAY

Table of ContentsIntroduction. 3Background . 3The Application for the Stay of the Proceedings. 4The Law . 6CA P059/14 LJ Williams v Zim Integrated Shipping Services . 6CV2014-00338 Quantum Construction Limited v Newgate Enterprises Co. Ltd . 8CV 2015-03486 Climate Control v C.G Construction Services Limited . 9CV2012-04258 Satyanan Sharma and Anor v Christiana Adit and Anor . 10CV2016-01683 Executive Bodyguard Services Limited v National Gas Company ofTrinidad and Tobago. 11Additional Authorities. 12Namalco Construction Services Limited v Estate Management & BusinessDevelopment Company Limited CV2016-01522 . 13Heyman v Darwins Limited [1942] AC 356 . 14Methanex New Zealand Ltd. v. Fontaine Navigation S.A. 1998 [1998] 2 FCR 583. 15The Arbitration Agreement . 16Clause 20.4 . 16Clause 15 . 16Submissions . 17Analysis. 18Does the court have jurisdiction? . 18Conduct . 19The Order:. 22Page 2 of 22

Introduction1.The court has before it an application for a stay of proceedings made by thedefendant pursuant to section 7 of the Arbitration Act Chap. 5:01 (the Act) and theapplicable rules of the CPR1. The defendant seeks a stay to facilitate the arbitrationprocess contemplated by the various contracts entered into with the claimant upona dispute arising between the parties. The application is objected to by theclaimant.2.By their submissions, both parties accepted that it is within this court’s jurisdictionto grant the stay requested and further that the decision is at the discretion of thecourt to be exercised after the conditions and threshold requirements as set out inLJ Williams Limited v Zim Integrated Shipping Services & Anor CA CIV P059/14were considered.3.The court considered the dicta of Mendonça JA in the case of LJ Williams and alsothe submissions of both parties. The court shared the concerns of attorney for theclaimant in relation to the defendant’s failure to engage in pre-action protocols,which might suggest an unwillingness to engage in negotiations and, by extension,arbitration. The court also took note of the apparent failure of the defendant toaddress, whether substantively or at all, the dispute between the parties and theclaimant’s apparent entitlement to payment based on the interim payment andcompletion certificates.4.There is no dispute as to whether or not the threshold requirements have been, oris capable of being met. The court is however of the opinion that the defendant’sapplication falls short of meeting the two conditions set out in section 7 of the Act.More specifically, the court is not satisfied that there is no sufficient reason whythe matter should not be referred to arbitration in accordance with the agreement.Background5.This matter concerns a claim for breach of contract in which it is asserted that thedefendant has failed to pay the claimant the total debt of Twenty Two Million,Nine Hundred and Fifty Three Thousand, One Hundred and Sixty Four Dollarsand Fifty Two Cents ( 22,953,164.52). According to the claimant that sum is due toit pursuant to 14 contracts entered into with the defendant for the provision of1Part 9.6, 9.7 and 26.1(w) of the Civil Proceeding Rules 1998Page 3 of 22

construction services, pest eradication and the maintenance of 14 educationalfacilities. These works were allegedly concluded between the period 2011 to 2015and despite the interim payment certificates and/or completion certificates issuedby the defendant and/or its agents in relation to same, the claimant’scorresponding invoices remain unpaid.6.On 27 May 2016, the claimant’s attorney at law wrote a pre-action protocol letterto the defendant to settle the outstanding debts. It was set out in the statement ofcase dated and filed on 21 April 2017 that up until that date, there had been noresponse to the letter nor any payment.7.There is no dispute that the 14 contracts incorporated the terms and conditions ofeither (i) the FIDIC2 Red Book; (ii) the FIDIC Short Form of Contract; or (iii) theFIDIC Yellow Book that all have arbitration clauses upon which the defendantseeks to rely.8.The defendant filed its appearance on 4 May 2017 and has not taken any othersteps in the matter other than the application now being considered and filed 22May 2017.The Application for the Stay of the Proceedings9.The defendant filed an application for an order pursuant to section 7 of the Actand pursuant to Parts 9.6, 9.7, 26.1 (f) and 26.1 (w) of the CPR for an order stayingthe proceedings pursuant to:9.1.The court’s inherent jurisdiction or, alternatively,9.2.Section 7 of the Act insofar as the claim concerns a dispute or differencethat, pursuant to clause 20.6 of the FIDIC Red Book and FIDIC Yellow Bookand pursuant to clause 15.3 of the FIDIC Short Form of Contract, shall befinally settled by arbitration.10.The application also sought an order pursuant to Part 9.7 of the CPR declaring thatthe court has no jurisdiction or should not exercise any jurisdiction which it mayhave until the determination of the adjudication and, if necessary the arbitrationproceedings.2International Federation of Consulting Engineers (commonly known as FIDIC, acronym for its French nameFédération Internationale Des Ingénieurs-Conseils) contract templatesPage 4 of 22

11.An affidavit of the defendant’s Acting Corporate Secretary, Annesa Rahim, wasfiled in support.12.The affidavit confirmed the 14 contracts that are the subject of the statement ofcase. Ms. Rahim failed to identify in her affidavit what, if any, dispute there isbetween the claimant and the defendant other than the claim for payment.13.After describing the provisions of clauses 20 of the FIDIC Red Book and FIDICYellow Book and clause 15 of the FIDIC Short Form of Contract, Ms. Rahim wenton to conclude that:“17.The Defendant was, at all material times inclusive of the time thatthe matter herein was commenced, and remains ready and willing to do allthings necessary to the conduct of the adjudication in accordance withClause (20) and the Rules of Adjudication as aforesaid and, in the eventthat a notice of dissatisfaction is given, the Defendant remains ready andwilling to do all things necessary for the proper conduct of the Arbitrationin accordance with the International Chamber of Commerce and/orUNCITRAL Arbitration Rules.18.There is no sufficient reason why the matter should not be referredto dispute resolution and/or adjudication and if a notice of dissatisfactionis given in respect of the decision of the adjudicator, to arbitration inaccordance with the FIDIC Red Book and FIDIC Yellow Book and/or theFIDIC Short Form of Contract as is applicable to the respective contracts.”14.Ms. Rahim also went on to make the following statement without providing anyfoundation for her expertise in relation to the same:“19.The public interest is in giving effect to dispute resolution clauseswhich require the parties to engage in the simple, fast and inexpensiveprocedure for adjudication before engaging in arbitration, and inpreference to litigation, is in favour of holding the parties to thecontractually agreed method for the resolution of disputes arising out ofthe agreement.”15.Despite the plea in the statement of case with respect to the pre-action protocolletter, Ms. Rahim gave absolutely no explanation whatsoever for the delay inresponding to the claimant up to the time of her affidavit, which is almost one yearlater.16.No affidavit in response was filed by the claimant.Page 5 of 22

The Law17.Section 7 of the Act provides:“If any party to an arbitration agreement commences any legalproceedings in the Court against any other party to the arbitrationagreement in respect of any matter agreed to be referred, any party tosuch legal proceedings may, at any time after appearance and beforedelivering any pleadings or taking any other steps in the proceedings,apply to the Court to stay the proceedings, and the Court, if satisfied thatthere is no sufficient reason why the matter should not be referred inaccordance with the arbitration agreement, and that the applicant was, atthe time when the proceedings were commenced, and still remains, readyand willing to do all things necessary to the proper conduct of thearbitration, may make an order staying the proceedings.”18.To assist the court in coming to an interpretation and application of the section tothe facts of this case, the parties relied on certain common cases and the claimanton one other.CA P059/14 LJ Williams v Zim Integrated Shipping Services19.The brief facts of this case are as follows. The Court of Appeal was thereconsidering an appeal against the grant of the first respondent’s application for astay of the appellant's counterclaim. The appellant alleged the wrongfultermination of a joint venture agreement as well as certain breaches by the firstrespondent of duties, including fiduciary duties, alleged to be owed to it underand by virtue of the joint venture agreement. Clause 15.2 of the joint ventureagreement stipulated that all disputes were to be referred and finally settled byarbitration. An application was thus made, pursuant to the joint ventureagreement, section 7 of the Act and the court’s inherent jurisdiction, to have thecounterclaim stayed. In response the appellant argued that: (i) there was delay inthe making of the application for the stay which was fatal to it; (ii) the firstrespondent did not show that it was, at the commencement of the counterclaim,and remained ready and willing to do all things necessary to the proper conductof the arbitration; and (iii) the referral of the matter to arbitration would result inmultiple actions with a risk of inconsistent decisions.Page 6 of 22

20.In explaining the court’s jurisdiction to stay proceedings in favour of arbitration,Mendonça JA noted that it was a discretionary power and stated at paragraphs 19and 20:“19. In order for the Court therefore to exercise its discretionary power itmust be satisfied of the two conditions set out in “the plain andunambiguous language of section 7” namely, (1) that there is no sufficientreason why the matter should not be referred to arbitration in accordancewith agreement and (2) that the person seeking the stay was at the timewhen the proceedings were commenced and still remains ready andwilling to do all things necessary to the proper conduct of the arbitration.20. However before the Court may exercise its discretion to grant a staythere are certain mandatory or threshold requirements prescribed in thesection. In the plain wording of the section these are: 1. there must be aconcluded agreement to arbitrate; 2. the legal proceedings which aresought to be stayed must have been commenced by a party to thearbitration agreement or a person claiming through or under that party; 3.the legal proceedings must have been commenced against another party tothe arbitration agreement or any person claiming through or under thatperson; 4. the legal proceedings must be in respect of any matter agreed tobe referred to arbitration; and 5. the application for the stay must be madeat any time after appearance but before delivery of pleadings or the takingof any other step in the proceedings.”21.His Lordship commented further that the authorities provided by the appellant inthat matter did not indicate that mere delay or delay without more is a sufficientground to refuse an application for a stay under section 7 of the Act. It wasacknowledged that delay or circumstances might lead to an inference that theapplicant for a stay was not ready and willing to do all things necessary to theproper conduct of the arbitration. However, his Lordship opined that it is open toa judge to accept the applicant’s unchallenged evidence to the contrarynotwithstanding the possible inference that could be drawn from thecircumstances.22.Further, the court found that the mere fact that there may be a multiplicity ofproceedings and hence the risk of inconsistent findings was not by itself sufficientto grant a stay. In the circumstances sufficient reason had not been shown by theappellant why the dispute between the parties as reflected in the counterclaimshould not be decided in arbitration.Page 7 of 22

CV2014-00338 Quantum Construction Limited v Newgate Enterprises Co. Ltd23.In this matter the claimant commenced legal proceedings on 28 January, 2014seeking, inter alia, the sum of 1,817,642.84 for works performed and servicesrendered by the claimant pursuant to a contract entered into between the parties.The defendant entered an appearance on 24 March, 2014 and filed for a stay ofproceedings pursuant to section 7 of the Act on 11 April, 2014. The defendantcontended that by virtue ofclauses 20.6 and 20.8 of FIDIC 1999, which formed partof the written agreement made between the parties, it was agreed that all disputesarising from the contract would be submitted to the Dispute Resolution Board andthen to arbitration. The claimant however countered that those sections did notapply primarily because no Dispute Resolution Board had ever been appointed. Itwas suggested that there was sufficient reason why the matter should not bereferred in accordance with the arbitration agreement as it concerned primarily amatter of law. The claimant also argued that the defendant had not establishedthat it was at the time when the proceedings were commenced, and still remained,ready and willing to do all things necessary to the proper conduct of the arbitrationhaving regard to its failure to respond to the claimant’s pre-action letter.24.The court granted the defendant's application for a stay of proceedings undersection 7 of the Act. That case is somewhat distinguishable from the instant as themain objection to the application was a challenge to the jurisdiction of theArbitrator based on the issues raised in that case. However, Mohammed J wasrequired to deal with the issue of the defendant’s readiness and willingness tocommit to arbitration proceedings. His Lordship acknowledged the inadequaciesof the defendant's pre-action conduct, by failing to respond to the claimant, butcommented that an omission to respond (silence or inaction) in and of itself is notsufficient to ground a finding of unwillingness to arbitrate. In this way adistinction was drawn between the circumstances in that case and that whichexisted in the case of Satyanan Sharma and Chandrica Sharma v. Christina Aditand Vashti Mohammed CV2012-04258. At paragraph 38 his Lordship commented:“Having read Satyanan Sharma, I am of the view that the Gobin J’s decisioneventually turned on the positive steps taken by the Defendant which wereat odds with any willingness or readiness to invoke the arbitration clause.While Gobin J. did indeed find their failure to respond to the claimant’spre-action letter to indicate their willingness or readiness to invoke thearbitration significant and said that “had they been so ready and willing Iwould have expected a response to that effect” this factor in and of itselfdid not appear to lead her to the conclusion that the Applicants were notready and willing to engage in arbitration. Rather her conclusion stemmed,Page 8 of 22

as the Defendant rightly pointed out, from the Defendants’ institution ofsummary proceedings in the Chaguanas Magistrates’ Court for possessionof the premises almost four weeks after the pre-action letter was sent andthe addendum to the Notice to Quit which stated that “ .High Courtproceedings will be commenced against you for damage.”25.Having found that no positive steps were taken to draw the conclusion that theywere not ready and willing at the time that proceedings were commenced toengage in arbitration, the defendant’s application was granted. In that matter thepre-action protocol letter was served 8 December 2013 and the matter was initiated28 January 2014. The defendant’s inaction spanned less than two months in thatcase.CV 2015-03486 Climate Control v C.G Construction Services Limited26.In this case, Kokaram J commented on the quality of evidence that ought to be laidbefore the court upon such an application being made.27.That case concerned both an application to set aside a judgment in default ofappearance and one for a stay of the proceedings in a situation where it was foundthat there was no evidence of an agreement between the parties to arbitrate theirdispute. In that case the dispute settlement procedure regulated disputes betweenthe “Employer”, a third party, and the “Contractor”, being the defendant. It didnot regulate disputes between the “Contractor” and “Sub Contractor”, that beingthe claimant. In that way the defendant was unable to prove a readiness toarbitrate as required by section 7 of the Act. Unlike the case at hand, it was not amatter in which the relevant parties were before the court so that it was necessaryto provide documentary evidence that the defendant had actively engaged or wasengaging the dispute process itself with the Employer to support assertions of areadiness to arbitrate.28.His Lordship examined the affidavit evidence in support of the application andcommented at paragraphs 24 and 25:“The first difficulty in this evidence is the absence of any documentaryevidence to demonstrate a willingness to invoke the settlement process.Second the first step in the settlement process is the referral of the disputeto the Engineer before any question of arbitration arises. This has not beendone as between the Defendant and the Employer. .Against these facts the Defendant’s application to stay the proceedings orto set aside judgment would be doomed to fail.”Page 9 of 22

29.It was earlier observed, at paragraphs 10 and 12, that:

that, pursuant to clause 20.6 of the FIDIC Red Book and FIDIC Yellow Book and pursuant to clause 15.3 of the FIDIC Short Form of Contract, shall be finally settled by arbitration. 10. The application also sought an order pursuant to Part 9.7 of the CPR declaring that the court has no jurisdic

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