• Any dispute as to the parties’ “respective rights and obligations hereunder or as to any matter arising out of or in connection with the subject matter of this agreement (other than any with regard to the meaning and construction of this agreement) shall be determined by an independent duly experienced surveyor..."
What happened next?
To cut a long story short:
• ZVI responded to and denied the allegations on their merits. • The University requested RICS to appoint an expert, who was duly appointed. • The expert issued initial directions stating that he was not appointed to decide matters embraced by the arbitration clause; and the parties cross-served submissions on the merits of the building works allegations. No party raised any jurisdiction issues. The expert asked the parties whether they were content that he should determine matters falling within the arbitration clause: The University said yes; ZVI said no. • The expert held hearings over three days and published a draft decision on liability. The parties commented and he issued a final decision that held ZVI/TJAC liable for many of the alleged defects. Both parties then cross-served their respective quantum submissions. • At that point ZVI asked for a postponement due to client illness. The University was prepared to agree but only if the respondents undertook not to dispose of assets and to confirm that they were maintaining indemnity insurance. The respondents declined to so undertake and confirm. • UND then applied to the court in the USA for a freezing order. In those proceedings, for the first time, ZVI asserted that the expert had no jurisdiction to issue an award. The basic reasons advanced were that on its face the dispute resolution clause was only designed to cover the University and TJAC because ZVI was only a nominal party to the development agreement and that any claim against ZVI should be under the duty of care agreement in the English court. ZVI then brought that argument to England and issued an application to the expert alleging that he had had no jurisdiction to make his determination and asking him to make a declaration to that effect. • UND raised three key answers in England: - the development agreement did cover ZVI; - if that was wrong, it was too late to take the point; and - in any event, that would be a matter of law to be determined under the arbitration clause not the expert clause. The expert purported to determine that he did have jurisdiction. • ZVI issued a Part 8 application essentially to ask the court to determine the jurisdiction issue and seeking an injunction to prevent the University from taking steps to enforce any part of the expert's determination. The result
Unsurprisingly (on the facts) ZVI lost. But Stephen Furst QC's well-considered judgment contains a number of important legal issues and there are, as a consequence, a number of key messages and decisions in the judgment.
Firstly, the expert had no right to make a determination as to whether he had jurisdiction because that was a matter that fell under the arbitration clause, not the expert determination clause. In Barclays Bank pie v Nylon Capital LLP, the Court of Appeal had held that the question of jurisdiction of an expert determinator was always finally a matter for the court. In the development agreement, that issue was assigned by the contract to an arbitrator.