A v. B

Parties

Procedural Posture

Construction and Arbitration Proceedings / Costs Determination Following Order to Stay Proceedings in Favour of Arbitration (paper Disposal)

Legal Issues

1. 1 Whether the Defendant is entitled to costs on an indemnity basis in respect of the summons to stay proceedings in favour of arbitration
2. 2 Whether the Plaintiff's challenge to the arbitration clause (GC 18) was reasonable or amounted to an unmeritorious attempt to litigate in breach of the arbitration agreement
3. 3 Whether the Defendant's conduct in refusing consent to commence arbitration before contractual conditions were satisfied was unreasonable

Ratio Decidendi

Defendant succeeded in obtaining a stay in favour of arbitration and established that the arbitration clause operated as written; Plaintiff's arguments that the clause was inoperative were unmeritorious and Plaintiff contested the summons up to the substantive hearing; absent special circumstances the established practice and authorities require awarding indemnity costs in such cases; accordingly the costs of and occasioned by the summons are to be paid by Plaintiff to Defendant on an indemnity basis, to be taxed if not agreed.

Court Disposition

Costs awarded to Defendant on an indemnity basis in respect of the summons to stay proceedings in favour of arbitration.

Orders

• The costs of and occasioned by the Summons, including all costs reserved and the costs of the submissions lodged for the purpose of the costs issue, are to be paid by the Plaintiff to the Defendant forthwith on an indemnity basis, to be taxed if not agreed.