Cameron (Scotland) Ltd v Melville Dundas Ltd [2001] ScotCS 46 (28 February 2001)

Cameron (Scotland) Ltd v Melville Dundas Ltd [2001] ScotCS 46 (28 February 2001)

The court held that Clause 41 (arbitration clause) of the main contract was not incorporated into the sub-contract because the parties' communings did not demonstrate a clear common intention to do so, and the clause could not be adapted to the sub-contract without wholesale rewriting. Post-contractual conduct by the pursuers, evidencing a belief that the main contract terms applied, was irrelevant to the interpretation of the written contract.

Citation
[2001] ScotCS 46
Parties
Pursuer: Cameron (Scotland) Limited; Defender: Melville Dundas Limited
Jurisdiction
Scotland
Judgment Date
28 February 2001
Procedural Posture
Commercial Construction Contract Dispute / Interlocutory Application to Sist (stay) Proceedings for Arbitration
Outcome
Application to sist (stay) for arbitration refused; pursuers' plea sustained; defenders' plea repelled.
Legal Topics
Incorporation of Arbitration Clauses, Interpretation of Contract Terms, Sub Contracting, Post Contractual Conduct, Ouster of Court Jurisdiction
Contract Law Construction Law Arbitration Incorporation of Arbitration Clauses Interpretation of Contract Terms Sub Contracting Post Contractual Conduct Ouster of Court Jurisdiction

Case Brief

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Parties

Cameron (Scotland) Limited

Pursuer

Melville Dundas Limited

Defender

Procedural Posture

Commercial Construction Contract Dispute / Interlocutory Application to Sist (stay) Proceedings for Arbitration

Legal Issues

  1. 1 Whether Clause 41 (arbitration clause) of the main contract was incorporated into the sub-contract
  2. 2 Whether post-contractual conduct is admissible to determine the terms of the contract

Ratio Decidendi

The court held that Clause 41 (arbitration clause) of the main contract was not incorporated into the sub-contract because the parties' communings did not demonstrate a clear common intention to do so, and the clause could not be adapted to the sub-contract without wholesale rewriting. Post-contractual conduct by the pursuers, evidencing a belief that the main contract terms applied, was irrelevant to the interpretation of the written contract.

Court Disposition

Application to sist (stay) for arbitration refused; pursuers' plea sustained; defenders' plea repelled.

Orders

  • Sustain the pursuers' third plea-in-law
  • Repel the defenders' first plea-in-law