REUTERS | Yuriko Nakao

Ambiguity in the adjudicator’s decision

Earlier this year, I wrote about why the adjudicator should avoid idiosyncratic language in his decision. Just last week, the adjudicator’s choice of language was before the TCC again in ROK Building v Celtic Composting. This time, the court was being asked to decide whether the adjudicator was being:

  • directive, that is, requiring the responding party to pay an amount straightaway (or within a reasonable time); or
  • declaratory, that is, simply stating the amount and the extension of time that the referring party was entitled to, and which should be taken into account in future certificates.

In ROK the adjudicator described the dispute in the following terms:

“The dispute… is in relation to [the responding party’s] failure to assess any change to the Completion Date as a result of flooding of the site and in relation to [the responding party’s]  inadequate assessment of [the referring party’s] financial claim in respect of flooding of the site as manifested in [the responding party’s] valuation of [the referring party’s] interim payment application number 13.”

In his decision, the adjudicator made the following award:

“12.3   That [the referring party] shall be paid in the additional sum of £204,465…

12.5  That [the responding party] shall pay interest on the sum awarded…”

You might think this is clear: the responding party is to pay the referring party £204,465 plus interest. I do, and so did the adjudicator and the referring party. Not so the responding party. In enforcement proceedings, it challenged the adjudicator’s decision, arguing that these words simply meant that this amount should be taken into account in the future certification process. The responding party supported its position by arguing that the adjudicator should have included a time for payment in his award, if that is what he meant.

Akenhead J concluded that the language used by the adjudicator was clear, in the context of the dispute referred and set out his reasons. These included the fact that the referring party had not sought a declaration, but had asked for payment. He dismissed the responding party’s arguments and ordered payment within 14 days.

In reaching his conclusion, the judge reviewed previous cases and suggested that the court must interpret adjudicators’ decisions not only from the words used by the adjudicator, but also in the context of the dispute which was referred to adjudication. For example, there may be a dispute as to whether money should be paid or should have been paid, but there may also be a dispute as to the true value of elements in a previous valuation. In this example, the crystallised dispute may involve or require a declaration as to what the true value is or a directive decision that money be paid. The issue in a case will depend on the facts of that case and the wording used in the adjudicator’s decision.

And what do I take from this?

As I said previously on this page, it is important that when an adjudicator issues his decision, he does not leave the parties in any doubt about what he is saying. In this case, it is difficult to see how much further the adjudicator could have gone to make himself clearly understood. Perhaps adding a simple “within 7/14 days” to paragraph 12.3 would have been sufficient.

One may argue that in this case the responding party was simply trying to wriggle out of payment, when really the decision was clear but, in the current economic climate, any argument that has any chance of being successful is being used to resist payment.

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