On 12 January 2015 the Irish High Court (Cregan J) held that the court could consider whether there was an arbitration agreement on a “full judicial consideration” basis rather than on a prima facie basis.
The case concerned an issue of contract formation and incorporation of an arbitration clause between the parties. The key question was whether such issue was for the London arbitration tribunal or whether it could be considered by the Irish courts.
Cregan J held that:
- It was unsatisfactory that a court, having heard the matter, should only consider on a prima facie basis whether an arbitration agreement existed. It would be leaving open the essential question of whether there was an arbitration agreement between the parties on a final and conclusive basis. A finding that an arbitration agreement existed on a prima facie basis meant that the issue may have to be re-argued before the arbitrator as to whether an arbitration clause existed on a conclusive basis. This was unsatisfactory for the court, the arbitrator and the parties, and was wasteful of costs.
- If the court only conducted the analysis to a prima facie review level, and left the matter open to the arbitrator, and if the arbitrator decided whether or not there was an arbitration agreement, that decision was open to challenge by way of appeal on a point of law. The courts could therefore be faced with the prospect of having to decide the issue again. Moreover, in a worse case scenario the parties might have to fight the issue on no less than three separate occasions. This could not be in the interests of proper case management.
- The question of whether there was an arbitration agreement was a question of law which was best decided by a court. The Irish (and other national) courts were well used to considering whether on the basis of the affidavit evidence before them there was a valid and concluded contract in existence between the parties. Moreover, if there were disputed facts on affidavit then oral evidence could be heard before a court to resolve such conflicts of facts.
- Consequently, the court could give “full judicial consideration” to the issue of contract formation at stake in the present case.
The Lisheen Mine v Mullock & Sons (Shipbrokers) Ltd & others [2015] IEHC 50, 12 January 2015
