Ashtrom Anguilla Ltd Claimant/Respondent v Flag Luxury Properties (Anguilla) LLC First Defendant/Applicant v Temenos Development Inc. Second Defendant/Applicant [ECSC]
| Jurisdiction | Anguilla |
| Judge | BLENMAN, J |
| Judgment Date | 30 November 2010 |
| Judgment citation (vLex) | [2010] ECSC J1130-1 |
| Court | High Court (Saint Christopher, Nevis And Anguilla) |
| Docket Number | CLAIM NO.AXAHCV 0091/2009 |
| Date | 30 November 2010 |
IN THE HIGH COURT OF JUSTICE
CLAIM NO.AXAHCV 0091/2009
This is an application by Flag Luxury Properties (Anguilla) LLC (Flag) and Temenos Development Inc (TDI) to stay claim filed by Ashtrom Anguilla Ltd (Ashtrom) against them. They also seek to have the court strike out the relevant paragraph of Ashtrom's, statement of claim in relation to the allegation of Unjust Enrichment.
The applications are strenuously opposed by Ashtrom who urge the court not to stay its claim nor to strike out the Unjust Enrichment aspect of its claim.
The issues that arise for the court to resolve are:
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(a) Whether the court should stay the claims that are brought by Ashtrom against Flag and TDI
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(b) Whether the court should strike out Ashtrom's claim for Unjust Enrichment against Flag.
Ashtrom is a company incorporated under the Laws of Anguilla, with its registered office situate in Anguilla. It is a contractor involved in the construction of works and buildings.
Flag is a Delaware incorporated company which is registered in Anguilla with its registered office in Anguilla. It has leased lands in Anguilla.
Flag had a mixed used development project which consists of a Golf Course and Residential Development. The development was designed to include a luxury class hotel with related facilities and amenities together with Estate Homes, Villas and Ocean Front Residences. Flag and TDI are alleged to have interlinked relationships insofar as the construction project is concerned. It is alleged by Ashtrom that Flag is the mind and management of TDI.
TDI is a company that is incorporated under the Laws of Anguilla with its registered office situate in Anguilla. It is also a developer responsible for the construction, marketing and sale of Estate Homes in Anguilla.
The claim and applications concern three contracts.
In relation to the first contract, Ashtrom complains that on the 10th day of October 2010, as employer, Flag engaged the services of Ashtrom (The Manor contract) to construct certain buildings. The contract price was US$24,897,792.00. The percentage of retention was ten percent. Clause 60.1 – 60.3 of the contract Agreement provide for the method of payment. The contract was amended and the contract sum was increased to US$46,716,413.
Ashtrom says that it commenced construction works on the Manor Project and received monthly payments by way of wire transfers. Flag requested that the payments be allocated to the 29 Villas and Sky Villas contracts.
Ashtrom says that it completed substantial works and Flag's engineer signed the Interim Payment Certificate for the period up to 31st August 2008 less retainage of US$29,751,672. Ashtrom says that it received US$24,392,565 from Flag leaving a balance of US$5,047.542. Despite the Engineer's Certification, this latter sum remains unpaid. As a result, Ashtrom ceased work on the project in August 2008 and still has not received the outstanding payments of $5,047,542.00 together with a retention sum of US$1,604,357.90.
Ashtrom has filed a claim against Flag and seeks to be compensated for the sums allegedly outstanding.
In relation to the second contract, Ashtrom says that it entered into an agreement with TDI to construct certain works at Temenos (the 29 Villas). The contract price was US$76,943,403.00.
Ashtrom says around 30th October 2006, it commenced work on the project and submitted its monthly statements. It received various sum as payment for the work it did. However, TDI has outstanding monies in the sum of US$13,783.739.50 which it has refused or failed to pay Ashtrom.
The contract sum was increased by US$53,845,843.70 to US$130,792,248.78; the total sum owed was US$32,383,739. Clause 60.1 – 60.3 stipulates the method of payment. In accordance with their Agreement, Flag's Engineer has certified the payment. Ashtrom says that TDI has refused to pay it (Ashtrom) the retention sum of US$4,674,907.30.
Ashtrom seeks to recover the above sums that are allegedly outstanding.
The third contract is in relation to The Sky Villas. This is a contract which Ashtrom says it entered into with TDI.
Ashtrom says that Flag engaged (its) Ashtrom services to construct certain works for a contract sum of US$59, 844,076.00. Clause 60.1 – 60.3 provides for the method of payment.
Ashtrom says that it commenced work on the project around 10th August 2007 and received payments towards the work it completed for Flag and/or TDI. However, it says that Flag owes it the sum of US$6,216,228. Flag's Engineer has certified the payments, yet Flag and/or TDI have failed to make the payments. Despite its (Ashtrom's) request of Flag and/or TDI they have failed to liquidate their indebtedness.
In addition, Ashtrom says that Flag and/or TDI owe it the sum of US$105, 792 as the retention sum for work Ashtrom has completed. Ashtrom, in its statement of claim seeks to recover the sums that are allegedly outstanding on the alleged basis of Flag's and or TDI's breach of contract.
In the alternative and in respect of the 29 Villa contract and The Sky Villa contract, Ashtrom says that if Flag and TDI are not one and the same, Ashtrom claims against Flag the sum of US$31,432,566.20 as Unjust Enrichment, in relation to The Sky Villa contracts and 29 Villas contracts for the works allegedly done for Flag's benefits.
It is appropriate to state that each of the three contracts contain a very detail Arbitration Clause in the form of 67(1).
Flag and TDI have applied to the court to have Ashtrom's claim stayed. They allege that in accordance with the contracts, which they entered, the parties are obliged to submit their dispute to arbitration.
Flag has also asked the court to strike out Ashtrom's claim based on Unjust Enrichment.
Flag and TDI have caused affidavits to be filed in support of their applications. Ashtrom has filed Affidavits in Support of its claim and ask the court not to strike out its claim.
Learned Counsel Mr. Ravi Bahadursingh stated that Flag and/or TDI disputes the claims by Ashtrom on the basis of the works are not to the extent of the amount claimed and/or in compliance with the specifications and drawings and other terms of the said contract.
Learned Counsel Mr. Bahadursingh said that The Arbitration Agreement which is to be found in each of the relevant contracts refers"any dispute of any kind whatsoever" to resolution by arbitration. Flag and TDI have not admitted the claims by Ashtrom. It would therefore appear axiomatic that a dispute subsists between the parties as a matter of ordinary interpretation. In any event, insofar as neither Flag nor TDI admits to the sums claimed by Ashtrom as being due and payable, a dispute has unequivocally arisen between the parties. In the landmark case of Halki Shipping Corporation v Sopex Oils Ltd [1998] 1 WLR 726 [1998] 1 WLR 726, 753, Henry L.J. concurred with the trial judge that:
"…until the defendant admits that a sum is due and payable there is a dispute within the meaning of the arbitration clause. Even in such a case I can see an argument for saying that a claimant would be entitled to an award if the respondent then refused to pay…."
The learned judge appeared to not only accept that a dispute arises until such time as the defendant admits that a sum is due and payable, but goes further to suggest that mere non-payment of a sum (whether or not such sum is, in itself, in dispute) is sufficient grounds to give rise to a dispute.
Swinton Thomas L.J. (at page 761) concurred with the general circumstance in which a dispute arises and held:
"In my view… there is a dispute once money is claimed unless and until the defendants admit that the sum is due and payable."
Mr. Bahadursingh stated that it is unassailable that neither Flag not TDI has ever admitted that the amounts claimed by Ashtrom are owed and/or payable.A fortiori, by letter dated 2nd September 2009, Flag and TDI each expressly refuted Ashtroms claims, as set forth in the Claim Form and Statement of Claim. Learned Counsel Mr. Bahadursingh submitted that the claims by Ashtrom constitute and/or relate to a dispute within the meaning of the Arbitration Agreement set forth in the respective contracts.
Mr. Bahadursingh stated that with regard to claims against Flag for amounts owed under the 29 Villas contract and The Sky Villas contract, Flag disputes being a party to those contracts.
Mr. Bahadursingh urged the court to stay the claims brought by Ashtrom against Flag and TDI. Learned Counsel Mr. Bahadursingh stated that there is a dispute between the parties in respect of a matter which under the Agreement is to be referred to arbitration. Mr. Bahadursingh said that Flag and TDI are entitled, as a matter of law, to a stay of legal proceedings pending the hearing and determination of arbitration proceedings or earlier resolution thereof.
Mr. Bahadursingh said that it is an admitted fact that the Manor contract was executed as between Ashtrom and Flag. It is also an admitted fact that the 29 Villas contract and The Sky Villas contract were executed as between Ashtrom and TDI.
Mr. Bahadursingh maintained that each of the Manor contract, 29 Villas contract and Sky Villas contract contain an Arbitration Agreement whereby the parties are obligated to refer any disputes to arbitration.
Mr. Bahadursingh Learned Counsel said that Flag's and TDI's applications for a Stay of Proceedings, is made pursuant tos.9 of the Arbitration Act 1996 (U.K.) as received by the...
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