Case Law Update 2011 - Issue 2

ADJUDICATION

Reservation of position on jurisdiction

Aedifice Partnership Ltd v Shah [2010] 132 Con LR 100 TCC

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.

See Beck Interiors v Russo under Keating Chambers Reported Cases on whether a surety of a party to adjudication was bound by the adjudicator's decision.

Insolvency

Pay now and argue later – or I'll wind you up by James Bowling, 4 Pump Court, Construction Law Journal 2010 Vol. 26 No. 8 p.601

The article pits the Insolvency Act 1986 against the HGCR Act on the issue as to what debts are payable. On the one hand the HGCR Act "otherwise disputable debts can become temporarily indisputably due", since the presumption is that adjudicator's decisions will be enforced even if wrong. By contrast, the Insolvency Act focuses on the taking into account of all disputes in deciding whether a debtor is insolvent. A court has to be convinced that a dispute or cross-claim is not genuine, for a petition to be upheld. The article reviews the case law, including the recently decided Shaw v MFP Piling in the TCC to the effect that the mere fact that a debt is indisputably due under the HGCR Act does not mean it is indisputably due for the purposes of the Insolvency Act 1986.

HGCR Act case index

Case Law Index by Peter Sheridan, Construction Law Journal [2010] Vol 26 No 8 p.607

The Construction Act Review in this issue comprises the 10th annual HGCR Act case law subject index, comprising cases on adjudication and other issues under the Act. There are now over 350. The index is in 2 parts, first, an alphabetical list of cases with references and level of court and then the case law subject matter list with over 130 headings, some of which are HGCR Act section numbers and some of which are issues, such as declaratory relief and summary judgment.

This issue of the Con LJ also includes a short article entitled 'Adjudication on the rise in Germany' by Ragnar Herbst of Baker & McKenzie, Frankfurt.

See Cleveland Bridge v Whessoe-Volker Stevin under Keating Chambers Reported Cases on the effect of s.106(2) HGCR Act on a LNG terminal steel and pipework contract.

Enforcement when claimant in difficulty

Integrated Building Services Engineering Consultants Ltd v PIHL UK Ltd [2010] BLR 622 Court of Session Outer House

The Scottish Court refused summary judgment by way of enforcement of an adjudication decision on the ground that there was clear and uncontested evidence of insolvency of the claimant. Scots law recognises the equitable principle of balancing of accounts, not only in bankruptcy or liquidation but when a party is on the verge of insolvency. The BLR Editors referred particularly to the basic principles governing this area in English law in Wimbledon Construction v Vago (Simon Hughes).

Failure to exhaust jurisdiction

RBG Ltd v SGL Carbon Fibers Ltd [2010] BLR 631 Court of Session Outer House

Under Scots law, summary enforcement of an adjudication decision could be refused where the adjudicator failed to consider fully submissions and evidence submitted by the responding party, under the principle of failure to exhaust jurisdiction. The BLR Editors give their opinion that a similar result might be expected on the same facts under English law for breach of natural justice.

Appointment of arbitrator

Chalbury McCouat International Ltd v PG Foils Ltd [2010] BLR 593 TCC

The case concerned the relocation of plant from the Netherlands to India under a contract between an English and an Indian company. The arbitration clause referred only to "EU law" and the defendant argued that it should be allowed to arbitrate in India. The court gave effect to the arbitration clause, although poorly worded, and held that the seat would be in Europe, probably England, rather than India. The claimant had asked for appointment by the Law Society, but the court preferred the LCIA as a "well-respected independent international arbitration institution experienced in the appointment of arbitrators in such cases".

ARBITRATION AND DISPUTE RESOLUTION

The Journal of International Arbitration Vol. 27 No. 6 December 2010 contains the following articles:

Enforceability of multi-tiered dispute resolution clauses by Didem Kayali, Turkey.

Arbitrating overseas oil and gas disputes: breaches of contract versus breaches of treaty by Michael Blyschak, McCarthy Tétrault.

Arbitrating labour disputes in Switzerland by Alexandra Johnson, Geneva and Isabelle Wildhaber, University of Gallen.

LCIA India: Will it change the international arbitration scene in India? by Sarosh Zaiwalla

The revised IBA Rules on the taking of evidence in international arbitration by Detlev Kühner, BHM Avocats, Paris

The resurgence of Scotland as a force in international arbitration by David Wilson, MacRoberts

Arbitration Law Monthly Vol. 11 No. 2 February 2011 contains the following articles:

Public policy on AJT v AJU in the Singapore High Court (on refusal of the Court to recognise award).

Changes to the Civil Procedure Rules on a new Paragraph 12 in the Practice Direction on Part 62 CPR: applications for permission to apply to the court.

Curial powers of the English courts on Chalbury McCouat v PG Foils: absence of designated seat.

The supportive power of the courts on Travelers Insurance v Countrywide Surveyors (refusal by court of pre-action disclosure for arbitration).

Stay of proceedings on Claxton Engineering v TXM Olaj-ES...