All or Nothing? The severability of Adjudicators' Decisions

Where an adjudicator's decision simultaneously addresses matters relating to "construction operations" for the purposes of the Construction Act alongside activities which are not "construction operations", to what extent will the court sever the decision to allow a part of it to be enforced? A recent TCC decision gives guidance and useful pointers on the scope of the doctrine of severability generally.

Facts

The defendant engaged the claimant contractor to carry out works at the Dragon Liquefied Natural Gas terminal at Milford Haven. The parties fell into dispute as to the value of the final account and the claimant referred the matter to adjudication. The defendant challenged the jurisdiction of the adjudicator on the basis that the activities undertaken by the claimant were not "construction operations" for the purposes of the Act, and participated in the adjudication expressly without prejudice to its contention that the adjudicator lacked jurisdiction. The adjudicator awarded the claimant £318K plus VAT, but the defendant refused to honour the decision. The claimant sought enforcement by way of summary judgment. The defendant resisted, arguing:

the agreement between the parties was not a "construction contract" because certain operations fell within the exception in s.105(2)(c) of the Act; and the adjudicator lacked jurisdiction because the works fell partly within the definition of "construction operations" under the Act and partly within the definition of excepted activities. With regard to the latter argument, the court addressed the important question of whether or not the decision of an adjudicator can be severed to allow it to take effect in relation solely to that part of the dispute which is reached within the adjudicator's jurisdiction.

The judgment

Ramsey J held that:

Some of the works undertaken by the claimant were excluded from the operation Act, but most of them were caught by the Act. The court therefore had to go on to consider the scope of the adjudicator's jurisdiction. The claimant had referred a dispute concerning a valuation of all of the works under the contract i.e. one dispute involving both "construction" and non-"construction" operations. The adjudicator had ruled that she had jurisdiction in relation to all of the dispute and her decision was a single decision relating to all of the works. However, an adjudicator does not have jurisdiction to deal with the whole of the dispute referred in circumstances where...