Ahmad Al-Naimi (t/a Buildmaster Construction Services) v Islamic Press Agency Incorporated

Factual and Procedural Background

The Plaintiff, a building contractor, entered into a building contract with the Defendant in July 1996 under a JCT Agreement for Minor Building Works to carry out refurbishment works at the Defendant’s property. The contract included an arbitration clause covering disputes arising under or in connection with the agreement. The Plaintiff carried out additional works beyond those identified in the original schedule, claiming these were under a separate oral contract without an arbitration clause. The Defendant disputed this, asserting all works fell under the original contract and its arbitration clause. The Plaintiff commenced court proceedings rather than arbitration, partly due to lack of Legal Aid for arbitration. The Defendant applied for a stay of the court proceedings under section 9 of the Arbitration Act 1996, which the Technology and Construction Court granted, refusing to decide whether the arbitration agreement covered the disputed matters. The Plaintiff appealed this decision.

Legal Issues Presented

1. Whether the additional works carried out by the Plaintiff were governed by the original JCT contract containing an arbitration clause or by a separate oral contract without such a clause.
2. What is the proper approach for a court when deciding an application under section 9 of the Arbitration Act 1996 to stay proceedings pending arbitration, particularly regarding whether the court or the arbitrator should decide jurisdictional questions.
3. Whether the court should decide the existence and scope of the arbitration agreement on affidavit evidence alone or require a trial with oral evidence or leave the issue to arbitration.

Arguments of the Parties

Appellant's Arguments

• The additional works were carried out under a separate oral contract distinct from the JCT agreement and thus not subject to the arbitration clause.
• The Plaintiff pursued the matter in court rather than arbitration because Legal Aid was unavailable for arbitration.
• The court should not stay proceedings unless it is clearly satisfied that an arbitration agreement exists covering the dispute.
• The Plaintiff contended that the arbitration clause did not cover the additional works and that the court should decide this issue rather than leave it to arbitration.

Respondent's Arguments

• The additional works were part of the original contract, extended to cover second fix works, and thus subject to the arbitration clause.
• The court should stay the proceedings under section 9 of the Arbitration Act 1996 because the dispute falls within the arbitration agreement.
• The issue of whether the arbitration clause applies should be decided by the arbitrator rather than the court, especially where there is a genuine dispute of fact.
• Both parties agreed the court should decide the jurisdictional issue on the affidavit evidence without cross-examination or oral evidence.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Edwin Jones v Thyssen (1991) 57 BLR 116	Principle that Legal Aid status of a party does not affect the court's duty to resolve issues between parties.	Confirmed that the court must decide issues without regard to Legal Aid, applied to arbitration context.
Birse Construction Ltd v St David Ltd [1999] BLR 194	Approach to court applications under section 9 of the Arbitration Act 1996, including whether the court or arbitrator should decide jurisdictional issues.	Provided useful guidance on when the court should decide existence and scope of arbitration agreements and when to leave matters to arbitration.
Azov Shipping Co v Baltic Shipping Co [1999] 1 Lloyd’s Rep 68	Supports the approach that courts should decide questions relating to existence or terms of arbitration agreements to avoid multiple hearings.	Supported the court’s preference to decide jurisdictional questions to avoid duplication of proceedings before arbitrator and court.

Court's Reasoning and Analysis

The Court analyzed the proper approach to applications under section 9 of the Arbitration Act 1996, emphasizing the balance between judicial economy, the parties’ interests, and the statutory framework. The Court noted that while the Act empowers arbitrators to decide their own jurisdiction, this does not mandate that courts must always defer to arbitrators, especially where the existence or scope of an arbitration agreement is disputed.

The Court identified four possible approaches when faced with a section 9 stay application: (1) decide on affidavit evidence that an arbitration agreement exists and stay proceedings; (2) stay proceedings leaving arbitrator to decide jurisdiction; (3) order a trial to resolve the issue; or (4) refuse to stay if no arbitration agreement exists.

The Court stressed that the decision depends on the circumstances, including whether the issue can be resolved on affidavit evidence alone, the presence of triable factual disputes, and the parties’ agreement on procedure. The Court underlined that if both parties agree to have the issue decided summarily on affidavits, the court should endeavor to resolve it to avoid unnecessary delay and expense.

Applying these principles, the Court found that the factual disputes were minor and the documentary evidence strongly indicated a single contract covering both first and second fix works, thus including the arbitration clause. The Court concluded that the arbitration agreement covered the dispute, and the action should be stayed under section 9.

The Court also commented on the inherent jurisdiction of the court to stay proceedings where appropriate, even if the existence or scope of the arbitration agreement is not definitively established, to promote efficient dispute resolution.

Holding and Implications

The Court DISMISSED THE APPEAL.

The Court held that the arbitration clause in the contract dated 12 July 1996 extends to the additional works claimed by the Plaintiff. Consequently, the court proceedings must be stayed under section 9 of the Arbitration Act 1996. The decision resolves the jurisdictional issue in favor of the Defendant, confirming that the dispute falls within the arbitration agreement.

No new precedent was established beyond clarifying the proper approach to section 9 applications and confirming that courts should, where possible and with party agreement, resolve jurisdictional questions summarily on affidavit evidence to avoid unnecessary delay and expense.