[2019] IEHC 666

This Irish case related to disputes which had been ongoing since 2016. Various dispute resolution procedures had been put in place including expert determination. This led to a number of expert determinations being issued in favour of K & J which led to the present case before Mr Justice David Barniville. One of the many issues for the Judge was whether or not the expert determinations were “final and binding”. The expert determination agreement recorded that the parties would be bound by the terms and conditions set out in the revised terms and by any determination or series of determinations issued by the expert in accordance with the jurisdiction and powers given to the expert as set out in those revised terms. It was also agreed that the determinations would be “documents which are in the contemplation of the Agreement formed between the Parties on the 28th October, 2015” (i.e. the contract).

Under Clause 2, the parties agreed to “take up and consider Binding any Determination, or series of Determinations, within [10] working days of receipt”. At paragraph A, it was agreed between the parties that by submitting to expert determination on the terms agreed, the parties were taken to have conferred on the expert the jurisdiction and powers set out “to be exercised insofar as the Law allows and in [the expert’s] discretion as they may judge expedient for the purpose of ensuring the just and expeditious economical and final determination of the dispute referred to [the expert]”.

The parties agreed that the agreement for expert determination did amend, replace or supplant part of Clause 13 of the contract (which provided for conciliation and arbitration) insofar as the disputes which were the subject of the expert determination procedure were concerned. The difference between them was the extent to which it did. The agreement for expert determination did not expressly state the effect that it was intended to have on the contract and, in particular, on the dispute resolution provisions of the contract.

One of the issues for the court was whether or not the agreement for expert determination provided for an agreement that was “final and binding”. The agreement used the terms but not together. The Judge was of the view that on its express terms, the agreement did provide for the determinations issued by the expert to be both “final” and “binding”. However even if that was not the case, the Judge noted that both parties accepted that the default position in the case of any expert determination, was that the determination would be final and binding (subject to the very limited potential for challenge). The Judge referred to an Irish decision (Dunnes Stores v McCann [2018] IECA 238 where Hogan J referred to a short description of the process of expert determination which can be found in John Kendall’s Expert Determination (London, 1996)) and noted that:

“Determination by expert can thus be regarded as a ‘simple, informal, cost-effective, confidential and final form of dispute resolution’ ”

Therefore, even if the parties had not made express provision in the agreement for the determinations of the expert to be “final” and “binding”, the default position would, in any event, have been that they were final and binding. It would have been open to the parties to agree that the determinations of the expert did not have such final and binding effect. However, that would need to be done in clear words to alter and/or displace the default meaning. That had not been done here.

Further, under section 6(10) of the Irish Construction Contracts Act, a decision of an adjudicator is stated to be “binding until the payment dispute is finally settled by the parties” or a different decision is reached at arbitration or in proceedings in relation to the adjudicator’s decision. This was not the same as an expert’s determination. The binding nature of the adjudicator’s decision is expressly qualified or conditioned by the words used in the act. The decision is “binding” but only binding “until” the payment dispute is “finally settled”. There was no such qualification in the expert determination agreement in relation to the “binding” nature of any determination.