In one of its first decisions under the Irish Arbitration Act 2010 (2010 Act), the Irish High Court has refused to grant an application which sought to stay High Court proceedings on the basis that a dispute was subject to an arbitration agreement.

On 11 November 2010, the High Court issued its judgment in Barnmore Demolition and Civil Engineering Limited v Alandale Logistics Limited and Ors. [2010] No. 5910P, a construction dispute arising in relation to works carried out at Dublin Airport. The Court held that no arbitration agreement existed between the parties.

The issue in dispute in this case was whether there was an arbitration agreement between the parties. Ireland has adopted the UNICITRAL Model Law in its entirety and incorporates minimal amendments to the Model Law in the text of the Act.

Article 8(1) of the Model Law gives the Court the jurisdiction to decide if a matter is subject to an arbitration agreement. It provides: "A court before which an action is brought in a matter which is the subject of an arbitration agreement shall... refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed". The arbitral tribunal is also entitled to rule on the existence of an arbitration agreement. Article 16 of the Model Law gives effect to the doctrine of "Kompetenz-Kompetenz" and provides for the power of arbitral tribunals to rule on their own jurisdiction. In this case however, the defendant applicants invoked Article 8, asking the Court to decide if the matter was subject to an arbitration agreement.

Due to the entitlement of both the Court and the arbitral tribunal to rule on the existence of an arbitration agreement, the question arose as to the standard of judicial review which should be applied by the Court in exercising its jurisdiction on this matter under the Model Law, (i.e. whether a full judicial review of the jurisdictional objection was appropriate or only a prima facie interlocutory judicial consideration).

The Court held that for the purpose of this case it did not have to decide which standard of review was applicable as it was clear on either of those tests, that there was no arbitration agreement between the parties. The Court found that the clause dealing with arbitration was one of a number of clauses contained in a draft agreement which was never concluded nor were the terms accepted. Nor was there a separate agreement, course of conduct, or business dealings between the parties which would lead the Court to conclude that the parties knew that an arbitration clause would govern their dealings.

The Court's analysis in making its decision is interesting in light of divergent views in other countries' interpretation and application of Article 8 of the Model Law. On the one hand, some countries, such as the United Kingdom and New Zealand, have held that a full judicial review of whether an arbitration agreement exists should be undertaken by the Court. On the other hand, courts in other Model Law States have held that a prima facie review should be undertaken, and an arbitrator would then be able to decide whether he has jurisdiction under the doctrine of "Kompetenz-Kompetenz".

This is one of the first Irish court decisions which can be added to the growing body of international Model Law jurisprudence. This case has already been the subject of comment by international arbitration practitioner Gary Born, and it will be interesting to see how the Irish courts interpret provisions of the Model Law in any future applications.

Case: Barnmore Demolition and Civil Engineering Limited v Alandale Logistics Limited and Ors. [2010] No. 5910P (www.practicallaw.com/7-504-2765)