The plaintiff (P) commenced an action against the first defendant (D1) and second defendant (D2) for breaches of a surety bond (the Bond) and against D2 for damages for breach of a construction contract (the Contract). D2 applied for a stay of the action in favour of arbitration (the Stay Application) under an arbitration agreement (the Arbitration Agreement) contained in the Contract. D2 also sought a case management stay of the action against D1 in the event that a stay is granted in respect of the action against D2.
Decision on stay and order nisi on costs
Upon hearing the parties, the Honourable Mimmie Chan J (the Judge) granted a stay in respect of the claims against both D1 and D2 on the basis that the Arbitration Agreement clearly extended to P’s action against D2 and it would also be just to grant a case management stay for the action against D1 on the ground that the Bond was a guarantee of D2’s liability under the Contract. The Judge made an order nisi that the costs of the Stay Application be paid by P to D2 on a party and party basis