Claim was commenced against the Defendant, who failed to meet their obligation to respond to the claim. As a consequence, Judgment was entered in default of appearance. About a month later, having been served with the Judgement, the Defendant applied to stay the proceedings and to have the judgment set aside.
The Claimant was a sub-contractor and the Defendant the contractor. The contract (a FIDIC contract) between the Defendant and their client included an arbitration clause. The Defendant sought to claim that this term was incorporated into the contract between the Defendant and the Claimant.
The Defendant said that the Claimant should have commenced arbitration proceedings and not sued in the High Court. This was the only real ground argued for why the Judgment should be set aside and basis for why there was a realistic prospect of success on the claim was disclosed in support of the application to set-aside.
The Claimant successfully argued that firstly, there were no proceedings to stay. The Defendant’s worry was that applying to set aside the judgement would constitute a step in proceedings (potentially fatal to a claim to a stay of proceedings for the purposes of arbitration). However this was clearly misconceived since applying to set aside the proceedings could not be construed as a step in proceedings. Kokaram J, in dismissing the Defendant’s Application held that:
“…the jurisdiction to stay proceedings under section 7 of the [Arbitration] Act is premised upon a Defendant “entering an appearance” in the proceedings. In this case unless the judgment is set aside to permit the Defendant to enter an appearance this aspect of the statutory regime to stay proceedings would not be satisfied.”
In so ruling Kokaram J brought certainty to this interesting question and confirmed that the Trinidad and Tobago authority is similar to that of the English common law position as set out by Lord Justice Otton in Patel v Patel (1999) QB 551 at 557F:
“[W]hen judgment was entered by the plaintiff in default of defence. It was a regular judgment. The defendant had to set aside that judgment in order to invoke the arbitration clause.”
See full Judgment here:Matthew Gayle Arbitration clause FIDIC CONTRACT trinidad and TOBAGO