Adjudication Matters ' August 2020

• Published date: 11 August 2020
• Subject Matter: Environment, Real Estate and Construction, Construction & Planning, Waste Management
• Law Firm: Walker Morris
• Author: Carly Thorpe and Seumas Cram

The waste land? TCC considers statutory exclusions to adjudication regime in recent case.

In Engie Fabricom (UK) Limited -v- MW High Tech Projects UK Limited the TCC determined that the parties to a sub-contract did not have the statutory right to adjudicate, having regard to exclusions set out within the Construction Act.

In this recent case, the Technology and Construction division of the Business and Property Courts (the TCC) was asked to determine whether the primary activity at an 'energy from waste' plant was power generation, or waste treatment. Under the Construction Act, the parties would only have the statutory right to adjudicate if the plant's primary activity was waste treatment. Upon considering expert evidence, the TCC found that the primary purpose of the plant was power generation, and so declined to enforce two adjudication decisions in the Claimant's favour on the grounds that the Construction Act granted neither party a statutory right to refer disputes arising under the contract to adjudication. The adjudicator had therefore lacked jurisdiction to determine the parties' dispute, and the Claimant's enforcement application was dismissed.

Background

Engie Fabricom (UK) Limited (the Claimant) sought to enforce two adjudication decisions against MW High Tech Projects UK Limited (the Defendant) with a combined value of '367,723.85 plus VAT.

The parties had entered into an amended ICE sub-contract (the Sub-Contract) in connection with a fluidised bed gasification plant in Kingston upon Hull. Under the main EPC contract (the EPC Contract), the Defendant was appointed as the main contractor to carry out the design and manufacture of the plant. The Claimant was the Defendant's sub-contractor, and was engaged to carry out the installation of the plant under the Sub-Contract.

The plant operation consisted in converting refuse derived fuel (RDF) into steam by a combination of gasification and incineration processes. The steam generated then propelled turbines which in turn produced electricity which was sold to the National Grid. Under the EPC Contract the performance of the plant was linked to targets concerning heat and energy production. The EPC Contract did not set targets or other expectations regarding the volume of waste to be processed.

The plant operator received income from three major sources, including (i) gate fees paid by suppliers of the RDF, (ii) payments from the National Grid, and (iii) grants and subsidies, including a grant...