Case Law Update - January 2012

ADJUDICATION More than one dispute? Witney Town Council v Beam Construction (Cheltenham) Ltd [2011] BLM Vol. 28 No. 10 November 2011

The Council, as employer, sought to resist enforcement of the adjudicator's decision on the ground that Beam, the contractor, had referred 4 disputes to adjudication, in the first relating to the draft final account, the second to the final account, the third being interest on retention and the fourth for payment on retention, so that the adjudicator lacked jurisdiction. The court held that these were all aspects of the same dispute, namely what was due and owing to the contractor and that the adjudicator had therefore had jurisdiction. The contractor obtained summary judgment. Fastrack Contractors v Morrison (Simon Hargreaves QC) was applied.

See also Carillion Construction v Smith under Keating Chambers Reported Cases on serial adjudications.

See Hyder Consulting v Carillion Construction under Keating Chambers Reported Cases on natural justice in adjudicator's use of own methodology.

See Urang Commercial v Century Investments under Keating Chambers Reported Cases on enforcement despite error by adjudicator on need for withholding notice.

Adjudicator's fees where adjudication invalid Systech International Ltd v PC Harrington Contractors Ltd [2011] BLM Vol. 28 No. 10 November 2011 and [2011] CILL 3110 TCC

This was litigation related to the adjudication natural justice case of PC Harrington v Tyroddy Construction. In that case it was established that there had been a significant breach of natural justice by the adjudicator which invalidated his decision. The court held that this did not mean that there had been a total failure of consideration so as to deprive

the adjudicator of his entitlement to fees, although such an outcome could result if it were shown that he had acted dishonestly, fraudulently or otherwise in bad faith.

ARBITRATION AND DISPUTE RESOLUTION Construction Law Vol. 22 Issue 10 December 2011 contains the following articles:

Expert determination or arbitration by Jane Fender-Allison, Dundas & Wilson.

The cross border Mediation Directive by Vijay Bange, Trowers & Hamlins.

New ICC Rules of Arbitration by Edward Freeman, Clyde & Co.

Anti-suit injunction Excalibur Ventures LLC v Texas Keystone Inc [2011] 138 Con LR 133 Commercial Court

The Claimant, for apparently tactical reasons, issued ICC arbitration proceedings in New York in parallel with commencing litigation in the Commercial Court in London, presumably to obtain a world-wide freezing order which it could not get from the arbitration. The Con LR Editors note that the claimant was then "hoisted by its own petard" when the Commercial Court held the proceedings before it to be substantive, since Excalibur had clearly voluntarily submitted to its jurisdiction, and it was the appropriate court for determining the parties to the arbitration agreement. The consequence was that the defendants were able to obtain an anti-suit injunction restraining the continuation of the arbitration proceedings. Expert determination Barclays Bank plc v Nylon Capital LLP [2011] BLR 614 Court of Appeal

This was a (non-construction) dispute between bank and hedge fund, under a contract which provided for expert determination of disputes as to profit allocation under the partnership agreement by which the LLP was set up.

The CA had to decide an appeal against a decision of the Chancery Division in favour of Barclays which raised issues as to the jurisdiction of the expert and powers of the court to intervene in the expert's determination. Generally, the parties should be bound by their agreement and the court will only intervene to interpret the provisions of the contract clause relating to expert determination. Whether the expert can rule on jurisdiction depends upon the express agreement; the court could rule on this as a preliminary matter. It was suggested obiter that even a final and binding expert determination might be subject to challenge if made on the basis of an error of law.

CONSTRUCTION AND ENGINEERING CONTRACT DISPUTES LAW See Jerram Falkus Construction v Fenice Investments under Keating Chambers Reported Cases on the effect of a time bar clause on claims under JCT DB 2005 and on the prevention principle.

Implied terms as to quality Lowe v W. Machell Joinery Ltd [2011] 138 Con LR 48 and [2011] BLR 5901 CA

The non-compliance of a staircase with Building Regulations meant that it breached the requirements of satisfactory quality and fitness for purpose under the Sale of Goods Act ss 14(2) and 14(3). The fact that it could be made to comply relatively easily did not change this finding and accordingly the purchasers were entitled to reject it. A majority of the Court of Appeal allowed the...