Applications Pursuant to Article 8 of the UNICTRAL Model Law
On 8 June 2010, however, the law in this respect dramatically changed with the Arbitration Act 2010 giving force of law to the UNCITRAL Model Law on International Commercial Arbitration in respect of both international arbitration and “other arbitration” , i.e., domestic arbitration . It is now Article 8 of the Model Law that governs the question of arbitral jurisdiction in Ireland.
This issue of arbitral jurisdiction is an important matter for consideration and as such, it is imperative to have a complete understanding of the judicial consideration that this issue has received in Ireland since our adoption of the Model Law.
Article 8 of the Model Law
Article 8 of the Model Law is entitled “Arbitration Agreement and Substantive Claim Before Court”, and states as follows:
A court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.
Where an action referred to in paragraph (1) of this article has been brought, arbitral proceedings may nevertheless be commenced or continued and an award may be made, while the issue is pending before the court.
There are a number of general points that are of interest in respect of Article 8. Firstly, Article 8 is very similar to the provision contained in the 1980 Arbitration Act in that there had to be firstly, an arbitration agreement (it is not necessary to prove that a dispute exists), and secondly, the Court shall (i.e., the Court has no discretion) stay the Court proceedings unless the arbitration agreement (not the contract between the parties, just the arbitration clause itself) is “null and void, inoperative or incapable of being performed”. Whilst there had previously under the 1980 Arbitration Act been a requirement that an application to refer an action to arbitration be made before the delivery of any pleadings or the taking of any other step(s) in the proceedings, this is no longer a requirement under the 2010 Act. Now, any application to refer an action to arbitration must be made “not later than when [the Applicant submits] his first statement on the substance of the dispute”. Finally, and probably most importantly, Section 11(a) of the 2010 Act provides that there shall be no appeal from any Court determination of an application pursuant to Article 8(1).
It is for this final reason why it is so important to consider recent case law on this issue. Osmond Ireland on Farm Business Limited v McFarland  is the first reported decision in connection with an application under Article 8(1) of the Model Law. In her decision Laffoy J noted that the objective of Article 8(1) is to “make it mandatory for a Court to compel the parties to an arbitration agreement to engage in the Arbitral process as a means to resolving their dispute or disputes when one party makes an application seeking an Order to do so in time.” 
One of the first questions that a Court will look at when assessing an application under Article 8(1) is whether there is an arbitration agreement. This is the exact issue that the Court was required to look at in the case of Barnmore Demolition and Civil Engineering Limited v Alandale Logistics Limited & Ors.  In assessing this question, Feeney J. commented that “...it is not the case that an arbitration agreement does not have to be agreed between the parties for the parties to be bound by such agreement even though such agreement can be independent or separate. Absent there being an agreement to arbitrate, a matter is not the subject of an arbitration agreement and therefore is not covered by Article 8.” The learned Judge then proceeded to asses each of the requirements set out within Article 7 of the Model Law quoted within footnote 3 above. The first issue looked as was the form of the arbitration agreement and whether it had to be in writing. The Court determined that there was “no requirement for it to be recorded in any particular form as long as it is in writing and Article 7(3) provides that an arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means.” 
On this basis, the requirements of Article 7(3) will therefore be complied with if, for instance, parties agree that their contractual relationship shall be governed by a standard agreement that has within it an arbitration clause.
The second issue relevant to an application under Article 8(1) of the Model Law is what standard should be applied by a Court in determining whether or not an arbitration agreement is in existence. This question was addressed in the case of P. Elliott & Company Limited (In Receivership and In Liquidation) v FCC Elliott Construction Limited,  MacEochaidh J. was also required to interpret Article 8 of the Model Law. In doing so, he relied upon a decision of the Canadian Court of Appeal in Gulf Canada Resources Limited v Arochen International Limited  which formulated the following test to be applied by the Courts in referring disputes to arbitration:
“The test formulated is that a stay of proceedings should be ordered where:
(i) it is arguable that the subject dispute falls within the terms of the arbitration agreement; and
(ii) where it is arguable that a party to the legal proceedings is a party to the arbitration agreement.” 
Whilst the standard to be applied was also referred to in Laffoy J’s decision in Mount Juliet Properties Limited v Melcarne Developments and Others the Court did not express any view on that issue. Since the P.Elliott & Co. judgement decided that the prima facie test should apply and since Barnmore did not decide which test should apply (although Feeney J did state a preference for the full judicial consideration test), it appears that the prima facie test is at present the law on this issue. In practical terms, a Court will decide the matter based on the strength of the evidence put before it on affidavit. In most instances, both tests will be satisfied if the application is sufficiently strong.
Accordingly, the next issue that should be assessed is what constitutes sufficient evidence of an arbitration agreement. It goes without saying that the most convincing evidence of an arbitration agreement would be one that is in writing, having been executed by the parties to the dispute. In most cases, however, the parties may not have executed any written agreement but there may still be a clear understanding that the relationship was governed by a standard terms agreement or by an unexecuted written agreement drawn up by the parties, which was relied upon and acted upon by them as governing their contractual relationship.
In Mount Juliet Properties, the third and fourth Defendants contended that they had an arbitration agreement with the Plaintiff notwithstanding the fact that no executed agreement existed between the parties. The Defendant applicants contended that at the commencement of their commercial relationships with the Plaintiff they had emailed the Plaintiff stating that they would be prepared to provide their services as engineers in accordance with the standard conditions attached to the Defendants’ respective industries. Further, there was evidence before the Court of emails from the Defendants to the Plaintiff enclosing fee notes all of which referred to the fact that services were being provided in accordance with the standard conditions. Both of these standard conditions contained a standard arbitration clause 22. Laffoy J. ruled that the emails sent to the Plaintiff by the Defendants amounted to sufficient evidence that established the existence of a valid arbitration agreement between the parties as required by Article 7 of the model Law. The Court stated:
“In the e-mail dated 13 October 2004, the fourth defendant set out the basis on which it was providing engineering services to the plaintiff. The services were being provided in accordance with the standard conditions in Agreement SE 9101. That statement and what followed can only be regarded as an offer to provide the services on the basis of those standard conditions and no other basis. By its conduct the plaintiff accepted that offer, whereupon a contract came into existence between the parties, which incorporated Agreement SE 9101, including the arbitration clause. As happened in the Leo Laboratories Ltd. case, the plaintiff was expressly put on notice of the existence of Agreement SE 9101 and it was put on inquiry as to the terms of the Agreement ... The reference to Agreement SE 9101 in the e-mail was sufficient to incorporate the terms of that Agreement, including the arbitration clause, in the contract between the plaintiff and the first defendant, which was concluded by conduct and, in the circumstances, the reference to the agreement was such as to make the arbitration clause part of the Contract.”
Does the Court have any discretion in an Article 8 Application?
As stated at paragraph 5 above, theCourt in exercising its powers under Article 8 has no discretion, and once satisfied that there is a valid arbitration agreement between the parties, must stay the Court proceedings. This exact issue was commented upon by the Court in P. Elliott & Company Limited (In Receivership and In Liquidation) v FCC Elliott Construction Limited, where MacEochaidh J. stated as follows:
“I agree with the proposition that Article 8 of the Model Law does not create a discretion to refer or not to refer matters to Arbitration but directs a Court to grant or not to grant a stay, depending on the threshold issue of whether the parties to the proceedings are parties to an arbitration agreement. If they are, and the dispute is within the scope of the arbitration agreement and there is no finding that the agreement is null and void, inoperative or incapable of being performed, then the stay must be granted. Contrarily, if the parties are not bound by an arbitration agreement, then the stay, of course, must be refused.”
It was further noted by Laffoy J in the case of Mount Juliet Ltd,that the prospect of there being a multiplicity of proceedings cannot be taken into consideration by the Court in considering an application under article 8(1). It is undoubtedly a common occurrence in construction disputes for a Plaintiff to contend that it would be inconvenient and perhaps unfair if it is required to fight different Defendants in different fora.
The practical question that arises from all of the above therefore is what is meant by the provision within Article 8(1) of the Model Law which states that an application to refer a dispute to arbitration has to be made “not later than when [the Applicant submits]...his first statement on the substance of the dispute.” Under the 1980 Arbitration Act, the law stated that the stay application should be brought “before delivering any pleadings or taking any other step in the proceedings”. There does not appear to be an Irish decision on this issue, but certainly, and practically speaking, it would appear that an application under Article 8(1) should be brought prior to filing a Defence. Even still however, it is possible that a party may be estopped from bringing an application from the entering of an appearance, which strictly speaking invokes the jurisdiction of the Court to deal with the dispute. To prevent such a scenario unfolding, it would be most advisable to expressly reserve one’s rights and to indicate the intention to apply for a stay.
As stated within paragraph 2.2 above, in accordance with the provisions of Section 11(a) of the 2010 Act there will be no appeal from any decision issued by the High Court in an application pursuant to Article 8(1). The repercussions of such a provision may prove far-reaching, what is abundantly clear is that the High Court, once satisfied that a valid arbitration agreement exists, has no discretion and cannot refuse a reference to arbitration pursuant to Article 8(1) of the Model Law.
Before obtaining her Barrister at Law Degree, Lydia B. Bunni B.L obtained a Masters of Law in Trinity College Dublin. She also undertook the Diploma in Construction Law and Contract Administration in Trinity College in 2010. She achieved first in her class obtaining a Distinction and was awarded the Sisk Prize for Excellence. Lydia is a practicing barrister since 2006, having acquired a specialist practice in construction, engineering, planning and development law and alternative dispute resolution.
Dr. Nael G. Bunni is a Chartered Engineer, Registered Chartered Arbitrator and Conciliator/Mediator. Also, Visiting Professor in Construction Law and Contract Administration at Trinity College Dublin. He has acted as dispute board member, conciliator/mediator, arbitrator or chairman of arbitral tribunals in numerous domestic and international disputes involving parties from over fifty jurisdictions. He has acted as arbitrator in over 150 domestic and international cases, either as sole arbitrator, as a member of a tribunal or as chairman (president). Many of these appointments were under the ICC Rules of Arbitration; the LCIA Arbitration Rules; the UNCITRAL Arbitration Rules; the Dubai International Arbitration Centre; the Institution of Engineers of Ireland or the Rules of the Cairo Regional Centre for International Commercial Arbitration. Over 90 of these cases have led to written and published reasoned awards.
Dr. Bunni is the author of numerous technical papers and three books: “Construction Insurance and the Irish Conditions of Contract”; “Construction Insurance” now in its second edition under the title of “Risk & Insurance in Construction”, published by Spon Press, London, in March 2003; and “The FIDIC Forms of Contract” published in its third edition in May 2005 by Blackwell Publishing, Oxford (now John Wiley & Sons Ltd). He has lectured extensively and has been invited to speak in many countries in Europe, The Middle East, Asia, Africa, North and South America and New Zealand.
i. “Arbitration Agreement” is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement;
ii.The arbitration agreement shall be in writing.
iii. An arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means.
iv. The requirement that an arbitration agreement be in writing is met by an electronic communication if the information contained therein is accessible so as to be usable for subsequent reference;; “Electronic Communication” means any communication that the parties make by means of data messages;; “Data Message” means information generated, sent, received or stored by electronic, magnetic, optical or similar means, including, but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy.
v. Furthermore, an arbitration agreement is in writing if it is contained in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other.
vi. The reference in a contract to any document containing an arbitration clause constitutes an arbitration agreement in writing, provided that the reference is such as to make that clause part of the contract.”