Practical Law

It can be of no surprise that in the recent decision of PT Building Services Limited v ROK Build Limited [2008] EWHC 3434, Ramsey J held that a contractor could not both “approbate and reprobate” an adjudicator’s decision.

Common sense, fair play and earlier authorities dating back to the middle of the last century support the view that this is the right approach. The responding party cannot both assert that an adjudicator’s decision is valid and, at the same time, seek to challenge the validity of the decision. Instead the responding party must elect to take one course or the other.

There are obvious lessons to be learnt from the predicament that ROK, as responding party, found itself in:

• You cannot have your cake and eat it too. You must elect whether to challenge or accept an adjudicator’s decision.
• Even when you have reserved your rights in respect of jurisdiction or other challenges at the outset of an adjudication, these can be waived through your later action.
• Payment of an adjudicator’s fees (whether inadvertent or otherwise) is sufficient to show that you are treating the decision as valid, notwithstanding an earlier reservation of rights.
• Referring parties are becoming more creative when faced with complex jurisdictional challenges which may mean that you have to protect your position in ways other than simply defending enforcement proceedings. Instead a referring party may try to avoid difficult and expensive enforcement proceedings where strong jurisdiction arguments are raised by preferring to use the simpler and cheaper option of a further adjudication. Those advising the responding party must give careful consideration as to how to proceed in that second adjudication.

Caught between a ROK and a hard place!

What does seem clear is that ROK did not have many options available to it and could not have done anything to stop PT Building Services starting a second adjudication.

ROK chose to try and avoid the costs of a second adjudication by persuading the second adjudicator that he did not have jurisdiction to decide the dispute. While we agree that this is a sensible approach for a responding party finding itself in such circumstances, it must follow that if you go down this route:

• Your jurisdictional arguments must have merit and are likely to be the same as those raised during the first adjudication; and
• You should resist any temptation to run an alternative or parallel argument that the adjudicator lacks jurisdiction because the dispute has already been decided by the first adjudicator.