This was an application under sections 32 and 45 of the Arbitration Act 1996 (“the Act”) to determine a preliminary point of law in relation to arbitral proceedings.

The claimant engaged the defendant for the design, supply and erection of scaffolding. In 2000 the scaffolding collapsed onto adjoining roads and onto a railway line. This led to a claim by the claimant of £600,000 and to the conviction of the defendant in relation to offences concerning the state of the scaffolding. In turn, the defendant claimed £180,000 as sums due under the subcontract.

The claimant’s solicitors wrote to the defendant in November 2003 enclosing a draft Particulars of Claim. The Letter enquired whether the defendant wished to rely on clause 26 of the standard conditions of subcontract which provided that disputes should be referred to arbitration, or whether it would be agreeable to the matter being litigated.

In December 2006, the claimant commenced High Court proceedings. The defendant sought to stay the proceedings to arbitration under section 9 of the Act. The claimant applied for the appointment of an arbitrator. The defendant claimed that it had not been served with a Notice of Arbitration in accordance with clause 26.1 of the subcntract, nor was it asked to agree the appointment of an arbitrator. The claimant relied on the letter as fulfilling the purposes of a notice to commence a claim under clause 26.1.

Although an arbitrator was appointed, the parties agreed that the court should determine a number of issues pursuant to sections 32 and 45 of the Act.

There were essentially two issues before the court. First, there was an issue whether section 14(1) or section 14(2) of the Act applied to this case and therefore whether clause 26 of the subcontract, the parties agreed when arbitral proceedings were to be regarded as commenced. The second issue was whether the letter was sufficient notice to commence arbitration.