- Holloway & Anr v Chancery Mead Ltd
This claim related to a proposed arbitration in respect of the purchase of a private property by the Holloways from CM, the Developer. CM said that whilst they were content to agree to the appointment of an arbitrator, first, the Holloways had to abide by clause 24.1 of the contract and refer their complaints to the NHBC dispute conciliation process. CM said that this was a condition precedent to arbitration. The Holloways sought a court declaration that they were entitled immediately to refer the dispute to arbitration. The relevant part of the contract, clause 24, provided that: “If any disputes shall arise … either party shall at the written request of the other seek to resolve such dispute … through conciliation by the NHBC.” Clause 24.6 said that the “making of a determination by an NHBC investigator shall be a condition precedent to any right to refer the matter to arbitration …”
The issue before Mr Justice Ramsey was whether and to what extent these provisions would prevent an arbitration being commenced until they had been satisfied or complied with. It should not be forgotten that the Holloways had two alternative remedies, one against the builder or the NHBC, the other against the developer. Here, clause 24.1 did not create any enforceable obligation to resolve a dispute between the developer/seller and the purchaser under the contract. The dispute here was for damages for breach of contract in relation to obligations under the contract not for remedies that might be available under the NHBC/Build Mark documentation. The disputes here were outside the scope of the NHBC Dispute Resolution Service.
Although having decided this, the matter was closed, Mr Justice Ramsay did comment upon the question as to whether or not the NHBC Resolution Scheme amounted to any more than an agreement to agree. For the ADR clause to be sufficiently certain, (i) there should not be a need for an agreement at any stage before matters can proceed, (ii) the administrative process for selecting a party to resolve the disputes should be defined and (iii), the process (or at least the model of the process) should be set out so that detail of it was sufficiently certain. Here the Build Mark documentation was sufficiently detailed to provide a method of dispute resolution which was certain and that included the imposition of the condition precedent requiring the parties to go through the NHBC Resolution Scheme before pursuing arbitration.