The TCC takes a robust approach to enforcing adjudicators’ decisions and a dim view of parties “simply scrabbling around to find some argument, however tenuous, to resist payment” (Chadwick LJ, Carillion Construction Ltd v Devonport Royal Dockyard). However, a technical breach by one of the parties can result in the court declining to enforce an adjudicator’s decision. Often, the “technicality” is raised at a late stage and can sometimes appear to be the result of a “scrabbling around” exercise.
When can a technicality prevent enforcement?
Vision Homes Limited v Lancsville Construction Limited is the most recent example of the TCC refusing to enforce an adjudicator’s decision due to a technicality. In this case, the claimant served an amended notice of adjudication on the defendant 18 minutes after the claimant had requested the nominating body to appoint an adjudicator. This was contrary to the requirements of the Scheme for Construction Contracts, which requires the notice of adjudication to be given before a referring party seeks the nomination of an adjudicator. As a result, the TCC concluded that the adjudicator did not have jurisdiction to reach his decision and refused to enforce it.
In other dispute processes, the relevant tribunal often has a discretion to deal with technical errors by the parties, as appropriate, and it is rare for such errors to be fatal to a party’s claim. Adjudication, however, is different. It is a creature of statute, with a prescribed procedure and a number of short, fixed deadlines that the courts are obliged to enforce. Failure to comply with these requirements can and often does render an adjudicator’s decision unenforceable. Other examples of where the courts have declined or may decline to enforce an adjudicator’s decision due to a technical error include:
- Failure to request in writing that the nominating body appoint the adjudicator named in the contract (although that adjudicator was unavailable) (IDE Contracting Limited v RG Carter Cambridge Limited).
- Referring more than one dispute to adjudication contrary to the Scheme for Construction Contracts (Bothma & Another (t/a DAB Builders) v Mayhaven Healthcare Ltd).
- Failing to serve a notice of adjudication in the manner prescribed in the contract (Primus Build Limited v Pompey Centre & Anor, where the judge indicated this could invalidate an adjudicator’s decision but decided in this case that service was compliant with the contract).
How can parties avoid these problems?
My suggestions are:
- Read the terms of the contract and relevant adjudication rules carefully and ensure that you follow all procedural steps referred to (even if they appear irrelevant).
- Proof read all documents carefully and, in particular, ensure that the names of the parties and company numbers are consistently stated.
- If there is any doubt as to the correct procedure to be followed, and the responding party disputes the adjudicator’s jurisdiction, consider making a Part 8 application to the court to resolve the issue (see the recent case of Bovis Lend Lease v Cofely Engineering Services).
- If you are aware that you have made a technical error such that there is a risk that the adjudicator’s decision is unenforceable, start the adjudication process again. A few days delay is better than ending up with an unenforceable decision.
