Appeals from arbitration awards are limited to legal points

The Court held that an appeal from an Arbitration award was inadmissible at law because it dealt with the merits of the case and not on a point of law. This was held by the Court of Appeal in S&A Quality Assurance Surveyors Limited -v- Director of Contracts et, decided on 3 March 2021.

S&A Quality Assurance Surveyors Limited appealed from an award delivered by a panel of arbiters in an action against the Director of Contracts and the Ministry of Gozo. The case concerns an outstanding claim the company had on works it carried out on a construction site in Gozo. The company was paid, however, it expected additional sums due to variations the Ministry ordered to the contract.

In the Arbitration award, the Arbiters first discussed the pleas raised by the Director of Contracts. The Director claimed that he was not bound by the arbitration clause in the contract and that he has no contractual relationship with the company and was not responsible for any payment. Furthermore, the Ministry never agreed to any variations to the contract.

The Arbiter analysed the contract, and the arbitration clause is found in Clause 11 of the special conditions of the contract. The contract was between the company and the ministry. The Director of Contracts merely signed the contract on behalf of the ministry and did not enter into any obligation directly. It has been established that the Director did not order any works and did not make any payments. There is a distinction between the tendering process and the contract of works. There can be negotiations in both parts. The final contract for the works was done with the ministry. The Arbiters upheld the Director’s pleas.

As to the claim the company claimed that there was an extended time of the works contract and additional items of work in the works contract. As to the extended time the Arbiters disagreed with the company because Clause 5 of the contract stipulated that “should the period of execution of on-site works be extended for any reason, the period of execution” shall be extended at “no extra claims in this regards…”

As to the additional items of work limited the claimed to €23,642 (excluding VAT) after the Arbiters analysed the contract and works actually carried out.

This award was appealed by the company, asking the Court of Appeal to uphold its claims. The Company argued that the Arbiters contradicted themselves, by first declaring they are entitled to payment, but rejected the claims and that they were wrong to decide it was not justified an increase in payment.

The Ministry replied that the appeal was null and void as it was filed late and that it was dealing with a point of law.

The Court of Appeal, presided by Mr Justice Lawrence Mintoff pointed at Article 71A (3) of the Arbitration Act would have allowed the company to use the date when it was notified with the Award. Article 47(1) of the Arbitration Act allows 15 days from the date of notification of the award to request for a further explanation on the award. The company had asked for clarification on the €23,642, which the Arbiters explained it was not an order but a suggestion. It questioned why this was not an order. Therefore, there was no need any further explanation.

The Ministry argued that the appeal was inadmissible because it did not identify any point of law. Article 70A (3) of the Arbitration Act reads:

“(3) The Court of Appeal  shall  only  consider  the  appeal  if  the Court is satisfied – (a) that the determination  of  the  point  of  law  will substantially affect the rights of one or more of the parties; (b) that the point of law is one which the tribunal was asked to determine or otherwise relied upon it in the award; (c) that on the basis of the findings of fact in the award the decision of the tribunal on the point of law is prima facie open to serious doubt; and (d) that based on a review of the application, any response and the award, the appeal does not appear dilatory and vexatious, and in all other cases the Court shall dismiss the appeal.”

Article 70B dictates the appellant must identify the point of law it is asking for a decision to be given.

The grounds of appeal listed by the company do not identify any point of law and therefore, the appeal was not in conformity with the law. The Court then moved to dismiss the appeal.