Walter Llewellyn & Sons Ltd & Anor v Excel Brickwork Ltd

For a stay under Arbitration Act 1996, the court must be satisfied that the parties agreed an arbitration agreement covering the dispute. Incorporation of a standard form containing a reference to “the tribunal” does not itself select arbitration where the contractual data required to identify the tribunal was left blank. A conditional clause providing for arbitration only where the standard form makes provision for it does not create an arbitration agreement independently. Contractual documents must be construed as a whole, including amendments intended to address statutory adjudication requirements. Where the documents do not demonstrate an express or conscious agreement to arbitration, the application for a stay fails.

Walter Llewellyn & Sons Ltd and Rok Building Ltd brought contractual and tortious claims against Excel Brickwork Ltd concerning alleged defects in brickwork and blockwork carried out under a 2002 sub-contract. Excel applied for a stay under section 9 of the Arbitration Act 1996, arguing that the incorporated NEC sub-contract documentation provided for arbitration.

The contractual documents referred to the NEC form, its dispute provisions and Llewellyn’s standard additions. The NEC sub-contract data identifying the tribunal was blank, and the form was unsigned. The central issue was whether, properly construed, the documents constituted an agreement to arbitrate.

1. Application dismissed. The defendant’s application for a stay failed because the sub-contract contained no arbitration agreement. The defendant was ordered to pay the claimants’ costs occasioned by the application.
2. The contractual documents had to be construed together. The order contained no express or direct selection of arbitration. The NEC form referred to “the tribunal”, but did not itself define that tribunal as an arbitral tribunal. The parties were required to select the tribunal in Part One of the sub-contract data, which they had left blank.
3. The arbitration addition in Llewellyn’s standard conditions was conditional. It applied only “if the standard Sub-Contract form makes provision for settlement of disputes by arbitration”. Since the NEC form did not make such provision without a completed selection of the tribunal, the addition did not independently create an agreement to arbitrate.
4. The standard additions were principally drafted to address perceived non-compliance between the NEC conditions and the Housing Grants, Construction and Regeneration Act 1996. Their standard-form character meant that they could operate in contracts where arbitration had been selected and in contracts where it had not.
5. There was no ambiguity requiring resort to contra proferentem. In any event, the principle would not realistically have assisted the party who had proffered the sub-contract. Nor could a contractor’s instruction issued years after completion have resolved the alleged ambiguity under the NEC conditions, particularly because such an instruction would itself be reviewable by the ultimate tribunal.
6. The judge expressed the provisional view that the additions replaced only NEC clauses dealing with the appointment and actions of an adjudicator. Clause 93.1 therefore survived, and the reference to the Scheme was limited to provisions dealing with appointment and action, not the separate effect of an adjudicator’s decision under paragraph 23(2). This point did not need to be finally determined.