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	England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> R Durtnell and Sons Ltd v Secretary of State For Trade and Industry [2000] EWHC 464 (TCC) (26 May 2000) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2000/464.html Cite as: [2000] EWHC 464 (TCC), [2000] CLC 1365, [2001] 1 All ER (Comm) 41, [2001] 1 Lloyd's Rep 275, [2000] BLR 321, 74 Con LR 87

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		26 May 2000

 

1. This is an application dated 9 April 1999 pursuant to section 18 of the Arbitration Act 1996 ("the 1996 Act") for the Court to exercise its powers to:

(i) Direct the Respondent to forward a request for the nomination of an arbitrator to one of the Institutions named in the Arbitration clause;

(ii) In the alternative to direct one of the Institutions to nominate an Arbitrator .

2. The parties have agreed that if I accede to this application I should refer the matter to the President of the Royal Institution of Chartered Surveyors or the Chartered Institute of Arbitrators to nominate a sole arbitrator.
3. The case raises the fundamental issue, which has not been addressed in previous cases, of the circumstances in which under s18 of the 1996 Act the Court should intervene.
4. Although the parties disagree about the cause of the delay which occurred between the time when the dispute crystallised in December 1993 and the date of this application in April 1999, they are agreed for the purposes of this application only, that the delay would not prevent a fair resolution of the dispute between the parties if I should grant the applicants the relief which they request. In a nutshell the defendants say that I should not exercise my discretion to make the order when the applicants have delayed for so long to exercise their rights.

The Facts

5. On 17 April 1991 Durtnell and Sons Limited ("Durtnells") entered into a contract with the Secretary of State for Trade and Industry ("DTI") for the refurbishment of Building 202 NPL Teddington, Middlesex. The contract was subject inter alia to the General Conditions of Government Contracts for Building and Civil Engineering Works, Form GC/Works 1 (Edition 2).
6. Clause 61 of the General Conditions, insofar as it is material, provided as follows:

" 61(1) All disputes, differences or questions between the parties to the Contract with respect to any matter or thing arising out of or relating to the Contract other than a matter or thing as to which the decision or report of the Authority or of any other person is by the Contract expressed to be final and conclusive, shall after notice by either party to the contract to the other of them, be referred to a single Arbitrator agreed for that purpose, or in default of such agreement, to be appointed at the request of the Authority by the President of such one of the undermentioned as the Authority may decide..." (eg. the Law Society of England and Wales, the Royal Institute of British Architects, the Royal Institution of Chartered Surveyors etc..)

"(2) Unless the parties otherwise agree, such reference shall not take place until after completion, alleged completion or abandonment of the Works or the determination of the Contract.

"(3) In the case of the Contract being subject to English Law such reference shall be deemed to be a submission to arbitration under the Arbitration Act 1950, or any statutory modification or re-enactment thereof."

7. The parties are agreed that, by reason of Clause 61(3), the Arbitration Act 1996 applies to this application although it was not in force at the time when the contract was made. The parties are also agreed that Clause 61 is the arbitration clause which governs the application before me.
8. The date for the completion of the works was 10 January 1992. After an extension of time, practical completion of work on Building 202 occurred on 6 April 1992. Durtnells had given notice of a claim for delay, loss and expense in its letter dated 11 February 1992.
9. There followed correspondence between Durtnells and Bampton and Lockwood, the Quantity Surveyors, regarding the final account on the building. At a meeting on 27 July 1993 with Bampton and Lockwood, Durtnells presented them with an application for additional costs of £109,312 arising both from the twelve week overrun of the contract and also for general disruption throughout the contract.
10. On 8 October 1993 Durtnells made a formal claim for additional sums for loss and expenses in the sum of £103,322. On 15 October 1993 Durtnells agreed the statement of final account for all items other than the valuation of delay costs.
11. On 1 December 1993 Howard Humphreys, the Project Managers, replied formally to Durtnells' letter of 8 October 1993. They rejected Durtnells claim in totality on the grounds that Condition 9 (valuation of the Superintending Officers instructions) and Condition 53 (Prolongation and disruption expenses) of the contract applied and that in respect of properly and directly incurred expense "It shall be a condition precedent to the contract sum being increased ... that as soon as reasonably practicable after incurring the expense, the Contractor shall have provided such documents and information in respect of the expense as he is required to provide under Condition 37(2).".
12. The letter pointed out that although practical completion was certified on 6 April 1992, the relevant documents were not provided until 8 October 1993 when the formal claim was submitted. This will no doubt be an issue between the parties in the arbitration if I agree to nominate an arbitrator.
13. It is agreed by the parties that at the latest a dispute between the parties crystallised on 1 December 1993.
14. It was submitted to me that Durtnells were in a delicate position in that if they pressed the defendants too hard, they might lose the opportunity of gaining other valuable government contracts in the future and that this explained the time that elapsed between the rejection of the formal claim and the notice of referral to arbitration on 3 July 1997. I accept that the approach of contractors to the government (or other major clients) may require sensitive handling and that that factor may be taken into account when the Court exercises its discretion whether or not to direct that an arbitrator should be appointed .
15. There certainly were delays after December 1993. The letter of 1 December 1993 was not replied to by Durtnells until 14 February 1994. This response was replied to in a letter dated 29 March 1994 from the Project Managers largely reiterating the position set out in the letter of 1 December 1993, but suggesting a meeting. This meeting took place in May 1994.
16. There was further correspondence which is not before me but the letter from Mr Andrews, the Project Manager, dated 23 December 1994 again rejected the claim. It did so specifically on the grounds that Durtnells did not comply with Conditions 53(3)(c)(i) and (ii) of the contract in that Durtnells did not, immediately upon becoming aware that the regular progress of the Works was being disrupted, give notice to the SO (Superintending Officer) of the circumstances causing the disruption. It was argued that under condition 53(3) this was a condition precedent to the sum being increased and that, since they had not done so, they were not entitled to an increase in the Contract Sum.
17. The claim was also rejected on the ground notified in December 1993, that Durtnells did not, as soon as was reasonably practicable after incurring the additional expense, provide the necessary documents and information necessary for calculating the additional sum certified in such manner as the Quantity Surveyor might require.
18. On 5 April 1995 Durtnells, in what could be described as a letter before action, expressed disappointment at the letter of 23 December 1994 and said that if this was Mr Andrews final word on the subject, Durtnells would have no alternative but to take the matter to arbitration.
19. On 7 June 1995, in response, Mr Andrews confirmed his position rejecting Durtnells claim and asked Durtnells "to accept this letter as final and formal confirmation of that rejection". Durtnells continued to argue in correspondence. On 21 December 1995 Mr Andrews repeated that his letter of 7 June 1995 was a final rejection of Durtnells claim.
20. Finally on 3 July 1997, two years after the "letter before action" Durtnells sent a formal request for arbitration. It is clear, as Mr Stevenson accepted in argument, that this letter was written after consulting solicitors. In my view there was a period of two years delay between the letter before action and Durtnells' formal request for arbitration. This delay cannot properly be explained away as the understandable attempt of Durtnells to achieve a solution short of arbitration or be said to have been the result of Durtnells' delicate position with a major client.
21. In their letter dated 9 December 1997 the DTI rejected the claim for Arbitration on the grounds that there had been inordinate and inexcusable delay in making a request for arbitration. The DTI went on to say that this position was subject to the advice of Counsel.
22. Despite attempts by Durtnells to obtain a definitive answer from the DTI, the DTI's formal response was delayed until 26 November 1998, almost a year later. This delay by Durtnells at the express request of the DTI can largely be explained as being due to the understandable desire not to upset a major client before it had received a final answer. Ms Richmond, for the DTI, said in her letter of 25 November 1998 that although there had been sporadic correspondence between the parties, Durtnells did not seek to invoke the arbitration clause until 3 July 1997 despite the consistent refusal of their claim. In those circumstances the Department was not prepared to accept that the Arbitration clause could still be invoked.
23. The letter went on:

"It is implicit in the arbitration clause that the party seeking to invoke that clause does so within a reasonable time of the dispute arising, in particular paragraph (2) of clause 61 of the works contract, by stipulating that any reference to arbitration takes place after the completion of the works, recognises, in the Department's view, that the reference would be made at or about that time. The Department rejects that five years following the completion of the works is still a reasonable period to invoke the arbitration clause."

24. Finally on 26 February 1999 a letter before action was sent to the Treasury Solicitor. The application starting these proceedings was made in April 1999.

The Parties Contentions

25. The claimant contends that an arbitrator should be appointed. The Court should not substitute its own views on the merits of the claim or the speed with which it has been pursued as these are issues for the Arbitral Tribunal. Insofar as there was delay in initiating the arbitration between December 1993 and July 1997, this was caused by the understandable efforts on behalf of Durtnells to achieve a solution short of arbitration. It was also within the limitation period.
26. The defendants concede for the purpose of these proceedings that there is an issue which, if it had been referred in a timely manner, would have been referable to an arbitrator. The defendants say that the Court has a discretion under s18 of the 1996 Act whether or not to nominate an arbitrator. It is said that the Section is a consolidating Section and that the principles should be exercised on the same basis as under s10 of Arbitration Act 1950, i.e. the test is whether the application has been pursued robustly.
27. Although there is a presumption in favour of arbitration, the DTI argues that s18 was intended to clarify and simplify the existing law and not to replace it. The Court should apply the principles in The Frotanorte [1996] 2 Lloyds Rep 461 to grant relief to a party that has for too long neglected its right to obtain redress.
28. Alternatively the defendants argue that the Court has an unfettered discretion to decide whether or not to grant relief on the facts of the case before it, giving due weight to:

(a) The terms of the parties' agreement and the ease with which the agreement could have been operated within the time frame;

(b) The competing public interest in referring matters to arbitration;

(c) The overarching aim of the swift and efficient disposal of the arbitration proceedings;

(d) The court's express role in jump starting the arbitral procedure;

(e) The Court's inherent jurisdiction (i) to refuse relief; ii) to take account of parties' actions in enforcing their rights; iii) to regulate abusive behaviour.

Taking these maters into account it is said that the Court should refuse relief.

The Background to the 1996 Act

29. The DTI set up a Departmental Advisory Committee on Arbitration Law ("the DAC Committee") consisting of distinguished practitioners in international arbitration, latterly under the Chairmanship of Lord Mustill and later Lord Saville of Newdigate. In 1989 the Committee recommended that there should be a new and improved Arbitration Act for England, Wales and Northern Ireland which should have regard to the UNCITRAL Model Law on International Commercial Arbitration (as adopted by the United Nations Commission on International Trade Law on 21 June 1985). UNCITRAL is the international trade law committee of the United Nations. An important part of the recommendation was to promote London as a centre of international arbitration and to limit the right of recourse to the English Courts.
30. The February 1994 draft of the Bill that became the 1996 Act had the following long title:

"To Consolidate, with Amendments, the Arbitration Act 1950, the Arbitration Act 1975, the Arbitration Act 1979 And related enactments."

31. The July 1995 draft Bill amended the long title to:

"An Act to restate and improve the law relating to arbitration pursuant to an arbitration agreement to make other provisions relating to arbitration and arbitration awards and for connected purposes".

The long title remained in this form when the Bill received Royal Assent on 17 June 1996.

32. Paragraphs 18 and 19 of the DAC Report on the Arbitration Bill set out the basic principles to be enshrined in the Act. The Report said as follows:

"18 We do, however, see value in setting out the object of arbitration. Fairness, impartiality and the avoidance of unnecessary delay or expense are all aspects of justice i.e. all requirements of a dispute resolution system based on obtaining a binding decision from a third party on the matters at issue. To our minds it is useful to stipulate that all the provisions of the Bill must be read with this object of arbitration in mind". These considerations are now set out in Section 1(a) of the 1996 Act.

33. The Report went on :

"19.The Second principle is that of party autonomy. This reflects the basis of the Model Law and indeed much of our present law. An arbitration under an arbitration agreement is a consensual process. The parties have agreed to resolve their disputes by their own chosen means. Unless the public interest otherwise dictates, this has two main consequences. Firstly, the parties should be held to their agreement and secondly it should in the first instance be for the parties to decide how their arbitration should be conducted. In some cases, of course, the public interest will make inroads on complete party autonomy, in much of the same way as there are limitations on freedom of contract." These considerations are now reflected in Section 1(b) of the 1996 Act.

34. In the House of Lords debate on Second Reading on 18 January 1996 (Volume 568/No 28 House of Lords Official Report relating to Parliamentary Debates Page 761) Lord Fraser of Carmylle QC, then Minister of State at the DTI in the House of Lords, said that:

"The principle of party autonomy is central to the Bill. Parties who are in dispute are able to decide how the arbitration should be conducted. The flexibility and control which this freedom gives to the parties is of critical importance. Having said that the freedom is not absolute. There are a small number of provisions which for reasons of public policy cannot be overridden. We thought it right when looking at the current law on arbitration to propose to the House certain changes. These are designed to improve the attractiveness of arbitration to potential users. What they want is a system which is speedy and cost-effective, is final and fair at the same time.

"We started from the principle that if parties have chosen arbitration rather than let the courts resolve their dispute this decision must be respected. We propose therefore to curtail the ability of the Court to intervene in the arbitral process except where the assistance of the Court is clearly necessary to move the arbitration forward or where there has been a manifest injustice. It is thus a deregulatory measure in that we are freeing up the process from unwarranted reference to the courts or unwarranted interference by them ....".

He added that as far as possible the Statute incorporated the structure and language of the Model Law.

The Scheme of the 1996 Act

35. It is important to consider the scheme of the Act insofar as it is material, since s18 is silent on whether the Court has a discretion to refuse to exercise any of the powers under the Section and therefore to refuse to grant the relief which the Claimants seek.
36. s1 sets out the general principles to be applied to arbitration. It provides specifically that the Court should not intervene except as provided for by the Act.
37. s4 and Schedule 1 divides the provisions of the Statute into mandatory provisions, which have effect notwithstanding any agreement to the contrary, and non-mandatory provisions which allow the parties to make their own arrangements but provide rules which apply in the absence of such agreement. s18 is a non-mandatory provision.
38. After the introductory provisions in Sections 1-5, Sections 6-29 are concerned with the setting up of the arbitration and the powers of the Court to remove an arbitrator, to fill a vacancy etc: and the immunity of the arbitrator.
39. From s30 to s65 the Act is concerned with the jurisdiction of the arbitral tribunal, the conduct of the arbitration and the powers of the arbitral tribunal in relation to the award and the costs of the arbitration. s66 concerns the powers of the Courts in relation to awards by arbitral Tribunals.
40. In the course of argument, the claimants argued that s41, which deals with the Tribunal's powers in relation to controlling inordinate and inexcusable delay in the procedure, is relevant to the present proceedings. That Clause, giving the Tribunal power to dismiss a claim on the grounds that there is a substantial risk that it is not possible to have a fair resolution of the issues in that claim, or is likely to cause serious prejudice to the respondent, is not directly relevant to the issue of whether the Court should give a direction that an arbitrator should be appointed. It is important to note that under s41 a detailed examination of questions relating to the striking out of proceedings using the criteria set out in s41 is a matter for the Tribunal and not for the Court.
41. The parallel with the substantive law is between the entitlement of a party to start proceedings which is governed by the Limitation Acts and the right to continue proceedings which gave rise particularly before the current civil procedure rules on case, management to issues of delay and fair trial.

The Limitation Acts

42. s13(1) of 1996 Act provides that the Limitation Acts apply to arbitral proceedings as they apply to legal proceedings. By Schedule 1 this is a mandatory provision. In the absence of agreement between the parties, the relevant period for commencing arbitration under a contract is six years from the date of the breach.
43. Under s14 (4) of the 1996 Act the arbitration is deemed to have been commenced when one party serves on the other party or parties notice in writing requiring him or them to appoint an arbitrator or to agree to the appointment of an arbitrator in respect of that matter. It is agreed that this occurred on 3 July 1997 which was within the period of limitation.

Other Specific Provisions

44. The general principles are set out in sections 1 and 2 of the 1996 Act.

In particular under s1 it is provided:

"1.The provisions of this Part are founded on the following principles, and shall be construed accordingly:-

(a) The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;

(b) The parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest;

(c) In matters governed by this Part the court should not intervene except as provided by this Part."... This refers to Sections 1-84 of the Act) and thus includes the appointment of an arbitrator under s18 of the 1996 Act.)

45. s18 of the 1996 Act gives the Court power to intervene to assist the arbitration process by appointing an arbitrator when one of the parties refuses to co-operate in the process or by giving directions as to the making of any necessary appointment.
46. s18 provides as follows:

"18-(1) The parties are free to agree what is to happen in the event of a failure of the procedure for the appointment of the arbitral tribunal."

There is no failure if an appointment is duly made under section 17 (power in case of default to appoint sole arbitrator), unless that appointment is set aside.

(2) If or to the extent that there is no such agreement any party to the arbitration agreement may (upon notice to the other parties) apply to the court to exercise its powers under this section.

(3) Those powers are-

(a) to give directions as to the making of any necessary appointments;

(b) to direct that the Tribunal shall be constituted by such appointments (or any one or more of them) as have been made;

(c) to revoke any appointments already made;

(d) to make any necessary appointment itself.

(4)An appointment made by the court under this section has effect as if made with the agreement of the parties. ..."

47. s18 is the enabling Section which gives the Court power to intervene to assist the arbitration process by appointing an arbitrator when one of the parties refuses to assist in the process It is not a mandatory Section, ie. the court has a discretion whether or not to intervene. I reach this conclusion for the following reasons. First, the wording of the Section is not mandatory in its terms. Secondly the Section is designated under s4 and Appendix 1 as a non-mandatory provision. Thirdly, it is implicit in the wording of s19 that the Court does have a discretion.
48. s19 provides:

"In deciding whether to exercise, and in considering how to exercise, any of the powers under section16 (procedure for appointment of arbitrators) or section18 (failure of appointment procedure) the court shall have due regard to any agreement of the parties as to the qualifications required of the arbitrators."

49. In The Villa [1998] 1 Lloyds Rep 195 at 197, Mance J said "Then it is said that the Court has a discretion under section 18(3) whether or not to exercise its powers to make an appointment. That is correct. The court must consider whether it is appropriate to do so." The Learned Judge was making his observations in considering whether the dispute should be referred to a sole arbitrator with appropriate experience or to a panel of three arbitrators. I respectfully agree with his conclusion that the Court has a general discretion to decide whether or not it is appropriate to make an appointment or to direct that an appointment should be made.
50. Although s18 of the 1996 Act must be considered in the context of the objectives of s1 of the Act, some assistance may be obtained from s10 of the 1950 Act ("the 1950 Act"). The 1950 Act, as amended, provided as follows:

"10 (1) In any of the following cases

a) Where an arbitration agreement provides that the reference shall be to a single arbitrator and all the parties do not after differences have arisen concur in the appointment of an arbitrator; ... any party may serve ... a written notice to appoint or concur in appointing an arbitrator ... and if the appointment is not made the High Court or a Judge thereof may on application by the party who gave the notice appoint an arbitrator ... ."

The word "may" is not reproduced in the 1996 Act but the substance of the provision is the same.

51. In The Frotanote [1996] 2 Lloyds Rep 461, the Court declined to appoint an arbitrator where the overall delay was described as "awe-inspiring". The initial delay was between the agreement to arbitrate in 1984 and the date in 1991 when there was a final breakdown of discussions. It was not until 29 June 1994 that the applicant's solicitors sent a draft originating summons for the appointment of an arbitrator. Finally, in October 1994 leave was granted to serve the originating summons. The Court was concerned with the delay between November 1991 and October 1994. Taking account of the previous history, the Court concluded that it was inordinate and inexcusable.
52. Hirst LJ held that the Court's discretion was completely unfettered. "The Court is not obliged to be alert to protect a right which the parties have regarded so poorly."
53. Nourse LJ held that "The simple question here is whether, as Longmore J held, inordinate and inexcusable delay is without more capable of influencing the discretion of the court."

"Every discretion must be exercised judicially and in accordance with any principles that have been developed in relation to it. But that does not mean that one discretion must be exercised in accordance with principles that have been developed in relation to another. Moreover, where authority has left it more or less at large, its exercise ought not to be narrowed without good reason. In every such case there must come a time when the Court can properly refuse to grant it, not because its dignity has been affronted nor in order to punish the applicant, but simply because it is wrong to grant a remedy to someone who has for so long neglected his right to seek it. The power to refuse relief in such circumstances is one which every Court in the land would wish to preserve".

54. It has been argued before me that the Court of Appeal was requiring a party seeking relief from the Court under s.18 " to pursue its claim with vigour " or "to do so promptly" and that this was an essential requirement if the Court was to grant relief. I do not read the judgment of the Court of Appeal as laying down such a general requirement. The essence of the residual discretion of the Court is that it is unfettered. It is entirely understandable that where there was such a long initial delay as in The Frotanate, the Court should come to the conclusion that unless the applicant acted promptly and with vigour the Court should in its discretion refuse to grant relief because it would be wrong to grant a remedy to a party that had for so long neglected its right to seek it.
55. In Secretary of State v. Percy Thomas Partnership (a firm) [1998] 65 CON LR 11 HH Judge Bowsher QC was dealing with an application to appoint an arbitrator to decide a dispute over the building of the British Embassy in Amman, Jordan which was built in 1986 and 1987 and which suffered from troublesome leaks in the roofs. On 15 April 1992 and 2 September 1996, the Foreign and Commonwealth Office issued notices to other parties to concur in the appointment of an arbitrator. On 16 April 1996 in respect of the first notice they applied to the Court to appoint an arbitrator. No affidavits were sworn in support of the application until eighteen months later. It is not surprising that HH Judge Bowsher QC described the delays as appalling.
56. At page 47 of the Report, he said at paragraph 35 "It was up to the plaintiff to pursue the claim with vigour. The plaintiff had a right to pursue its contractual right to arbitration by contractual means at any time within the period set by the Limitation Acts. But the claimant does not have the same right to be granted a discretionary remedy at any time within the period set by the Limitation Act".
57. He went on to say that the failure of the FCO to file evidence within eighteen months to comply with a mandatory rule of Court requiring the filing of evidence, was a substantial matter to be taken into account in the exercise of his discretion. This is clearly a case where such a breach of the Rules of Court can amount to an abuse of the process of the Court. HH Judge Bowsher QC, at page 50 of the Report, also identified prejudice to the defendants if he permitted the arbitration to proceed.
58. In Wealands v CLC Contractors [1999] 2 Lloyds Rep 749 Tuckey J at First Instance, upheld by the Court of Appeal, emphasised that under s48(i) of the 1996 Act, the parties are free to agree in advance not only the machinery under which the arbitrator is to be appointed but also the time within which such steps are to be carried out.

Conclusion

59. I have come to the following conclusions:

(1) The Court has a discretion under s18 of the 1996 Act whether or not to appoint an Arbitrator.

(2) This discretion must be exercised judicially and consistent with the principles set out in s1 of the 1996 Act and the residual discretion of the Court.

(3) Consistent with Section 1(a) of the 1996 Act, the Application should be refused if the Court considers that:

(a) It is impossible to obtain a fair resolution of the dispute;

(b) by an impartial Tribunal; and

(c) without unnecessary delay or expense.

(4) The Court should also, provided the principles in (3) above are satisfied, and consistent with s1(b) of the 1996 Act, implement the parties' agreement as to how their disputes are to be resolved subject only to such safeguards as are necessary in the public interest and set out in the 1996 Act.

(5) There remains a residual discretion in the Court to refuse to grant a remedy to someone who has for so long neglected his right to seek it. The exercise of this discretion will depend on the circumstances of the particular case.

60. In this case it is not contended by either party that it would be impossible to obtain a fair resolution of the dispute or that the arbitrator appointed by the President of the Royal Institution of Chartered Surveyors or the Chartered Institute of Arbitrators would not be impartial. There is also no reason to believe that the arbitration cannot be completed without unnecessary delay or expense. Clause 61(1) is silent as to the period within which the notice of arbitration must be given and the arbitrator must be appointed. The parties have not entered into any agreement which would prevent an arbitrator being appointed by the Court.
61. There remains the residual discretion of the Court. I bear in mind that the dispute crystallised on 1 December 1993 and that in the absence of any agreement between the parties the arbitration clause expired by limitation on 1 December 1999. The request for arbitration was made on 3 July 1997 and this application was made in April 1999. Both were made within the limitation period. This must be a relevant consideration although it does fetter the Court's general discretion.
62. The central question remains, can the Applicants' delay in this case to apply to the Court for directions as to the appointment of an arbitrator be such that it can fairly be said to have been for so long that it would be wrong for the Court now to allow the applicant to seek it? In my view it cannot. I have come to the conclusion that the Court should exercise its powers and refer the matter to the President of the Royal Institution of Chartered Surveyors or the Chartered Institute of Arbitrators.
63. Although there was some substantial delay after the formal request for arbitration, the DTI's response of 9 December 1997 was not unequivocal because it said that their unfavourable response was subject to advice from Counsel. The letter ended "when we have received Counsel's advice, we shall write to you further with regard to the question of an arbitrator".
64. This attitude was maintained in the DTI's letter dated 2 March 1998 and again in their letter dated 23 September 1998. The 23 September 1998 letter referred to Durtnells' threat in its letter dated 11 September 1998 to apply to the Court to appoint a suitable arbitrator and responded by saying "I note the final paragraph of your letter but hope that you will not take such action until I am able to reply substantively as indicated above? It was not until 26 November 1998 that the DTI gave its considered reply. I regard this delay on the part of the DTI of almost one year as deplorable. I can well understand why Durtnells were reluctant to make the application to the Court until they had a definitive decision from the DTI. It is reasonable to suppose that if the letter dated 9 December 1997 had not been "subject to Counsel's opinion" this application would have been made reasonably promptly in late 1997 or early 1998.
65. Taking all the circumstances into account I cannot say that the claimants have delayed for so long in seeking a remedy or regarded the remedy so poorly that it would be wrong for the Court to allow the claimants to seek it. I shall therefore grant the claimants their application.