Case Law Update 2011 - Issue 1


NEC Adjudication and Arbitration Provisions

Anglian Water Services Ltd v Laing O'Rourke Utilities Ltd [2010] 131 Con LR 94 TCC

"One of the few reported judgments relating to the NEC form of contract" as the Con LR Editors remark. It concerns the relationship between HGCR Act adjudication provisions and the dispute resolution provisions of the (amended) NEC contract used for a sewage works project. These provisions included the requirement that, in the event of arbitration after an adjudication decision, notice must be given within 4 weeks. The court held that there was nothing in this requirement which conflicted with the HGCR Act requirements: the court had power to extend time under the Arbitration Act.

It is noteworthy that the judge complained that "the task of construing the provisions in this form of contract is not made any easier by the widespread use of the present tense in its operative provisions. No doubt this approach to drafting has its adherents within the industry but, speaking for myself and from the point of view of a lawyer, it seems to me to represent a triumph of form over substance".

Apparent Bias

Fileturn Ltd v Royal Garden Hotel Ltd [2010] 131 Con LR 118 and [2010] BLR 512 TCC

The defendant client failed in its allegation that there was a real possibility that the adjudicator was biased. The basis of the allegation was that the adjudicator had been a director of a consultancy firm at the same time as Fileturn's representative had been a director of another office of the same firm. The court reiterated that the test was "whether an informed and fair-minded observer would conclude that there was a real possibility that (the adjudicator) was biased." It was well established that there was no objection to the legal representative of one of the parties being well known to the judge and the defendant had no real prospect of establishing at trial that there was apparent bias, so Fileturn would be granted summary judgment.

Interaction of Determination Provision and Adjudication

Banner Holdings Ltd v Colchester Borough Council [2010] 131 Con LR TCC

An adjudicator had ruled on the issue of determination of the contract, in which the claimant was to build an arts centre for the defendant. The contract purported to provide that such matters were outside the scope of the adjudication provisions, but the adjudicator regarded himself as able to decide on them. The court upheld this. If the contract had been interpreted as the contractor wished, it would have been contrary to s.108 HGCR Act and the Scheme rules would have applied.

Adjudicator's Jurisdiction on Different Case

Nickleby FM Ltd v Somerfield Stores Ltd [2010] 131 Con LR 203 and [2010] BLM Vol. 27 No. 9 TCC

The main issue between the parties to a dispute over a management services contract was whether the claimant could rely in the enforcement hearing on a factual case which was different from that put before the adjudicator, because of e-mails found after the adjudication, or whether, as the Con LR Editors put it, "he was stuck with his 'election' as to the basis of the alleged extension of the contract." The court held that the adjudicator had jurisdiction and that enforcement should be granted.

Adjudication in Ireland

Clarke Quarries Ltd v PT McWilliams Ltd [2010] BLR 520 1HC

Although statutory adjudication in Ireland is not yet operating (it soon will be), adjudication is already relevant to Irish construction to a limited extent because of the use of some UK standard forms. In this case, the client, Clarke Quarries, sought an injunction to prevent contractor PT McWilliams from pursuing an adjudication claim under the contract while an arbitration was undertaken. The judge held that the effect of the dispute resolution provisions of the contract was that a party was not precluded from referring to adjudication a matter not yet determined in arbitration. In effect, in this contract, adjudication came before arbitration, which was then the final stage of dispute resolution.

Delay in Delivery of Decision

Lee v Chartered Properties Ltd [2010] BLR 500 TCC

The TCC refused to grant summary judgment to the defendant contractor Chartered against the claimant owner, a litigant in person. The decision of the adjudicator, made by mid-afternoon on the Friday, was not communicated to the parties until the Monday and was thus not delivered as soon as possible after the decision was reached. The BLR Editors take the view that this aspect will in future "be confined to the particular facts of the present case."

Adjudication and Stay to Arbitration

MBE Electrical Contractors v Honeywell Control Systems Ltd [2010] BLR 561 TCC

In a dispute over electrical works, the parties agreed that the significant underlying issues would be governed by arbitration pursuant to the arbitration agreement in the contracts. There were disputed issues on the Final Account which MBE referred to adjudication, obtaining a £37,000 decision. Honeywell sought to resist enforcement by seeking a stay to arbitration. The BLR editors describe the judge as having dealt with this argument "in a very robust manner". Since their contract incorporated the Scheme, an adjudicator's decision was to be complied with or enforced immediately and could be the subject of later review in arbitration when the main issues were also decided. The BLR editorial view is that the matter is rather more complex than this would suggest.

Reservation of Position on Jurisdiction

Aedifice Partnership Ltd v Ashwin Shah [2010] BLM Vol. 27 No. 9 TCC

Already reported in CILL, in a dispute over professional fees which the claimant surveyors referred to adjudication, the respondent client submitted that there was no adjudication agreement and that the adjudicator had no jurisdiction. The adjudicator indicated that he thought that he had jurisdiction and the respondent asked for his reasons. In enforcement proceedings by the claimant, the respondent successfully argued that he had reserved his position on jurisdiction and that his request for reasons did not constitute an agreement that the adjudicator had the power to decide his own jurisdiction. It would be open to the claimant to proceed with a contractual or quantum meruit claim.

HGCRA s.105(2) Interpretation

Construction operations: Broad and Narrow Approaches by Peter Sheridan, Construction Law Journal [2010] Vol. 26 Issue 7 p52


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