Challenging an Adjudicator's Determination: The Extent of the Court's Supervisory Role

The scope and extent of the Court's supervisory role over an Adjudicator's jurisdiction to hear and determine a Payment Claim under the Building & Construction Industry Security of Payments Act ("SOPA") has been the subject of several recent decisions by the Courts in Singapore. The purpose of this article is to examine the different approaches adopted by the courts in deciding whether the validity of a payment claim under the SOPA affected the Adjudicator's jurisdiction to adjudicate on a dispute.

The Adjudication Process under the SOPA

The SOPA came into effect on 1 April 2005. Its stated objective was the implementation of changes to payment obligations across the construction industry and to ensure the smooth completion of construction projects in Singapore through the improvement of cash flow. The mechanism by which this stated objective was to be achieved was the statutory adjudication process.

Adjudication under the SOPA is "clearly intended to be a process distinguishable from arbitration"1. The statutory process places great emphasis on the quick resolution of payment disputes in construction projects. It stipulates short timelines and a failure to comply with these timelines means that the defaulting party will have to face dire consequences. The process is commenced by the Claimant serving a payment claim on the Respondent. After receiving this payment claim, the Respondent will prepare and serve a payment response which sets out the reasons that entitle the Respondent to withhold payment to the Claimant. Upon receipt of the Payment Response, the Claimant will have to decide whether to refer the dispute to an Adjudicator. If it decides to do so, it will file and serve an Adjudication Application and the Respondent will in turn answer the claim by way of an Adjudication Response.

The Adjudicator's role under the SOPA is to determine the dispute which has been referred to him. He will do so by examining the merits of the payment claim, the circumstances in question and come to a determination as to the viability of the payment claim. This is known as the Adjudication Determination.

Section 21 of the SOPA provides for a party dissatisfied with the Adjudication Determination to apply to the High Court to set aside the determination. At the outset, it is important to note that a challenge against the Adjudication Determination is not an appeal against the determination to the Court. The SOPA provides its own procedures whereby an aggrieved party may apply to the appointing authority for the Adjudication Determination to be reviewed. Once the review is determined, the determination is binding on both parties to the Adjudication unless a court refuses to enforce the Adjudication determination or the dispute is finally resolved in subsequent court proceedings or arbitration or the parties have decided to settle the dispute.

A challenge against an Adjudication Determination under Section 21 of the SOPA is typically advanced on grounds of the Adjudicator's jurisdiction to determine the dispute or on grounds that the Adjudicator had failed to observe the principles of natural justice.

Traditional Approach

Traditionally, the Courts have adopted a limited or restrictive approach towards interfering with an Adjudicators Determination. The statutory process of adjudication was intended to be a quick and cost effective resolution to disputes arising in the course of a construction project. The parties' substantive right to revisit the dispute in subsequent court or arbitration proceedings is expressly preserved. The objective was for the claimant to obtain quick interim relief rather than wait for the completion of the project. Given this...