REUTERS | Christian Charisius

Horses for courses in adjudication

Last week, I commented on the importance of the parties ensuring their dispute is in a safe pair of hands. At the time, I was alluding to the importance of getting a competent adjudicator, who knows what he is doing and will not let the parties down (by which I mean, having an enforceable decision). However, my “safe pair of hands” idea could apply equally to a party’s own representatives.

This thought was brought home to me most recently by Edwards-Stuart J in NAP v Sun-Land.

NAP v Sun-Land

At first glance, this case looks like a fairly routine adjudication enforcement case. Contractor (NAP) claims money. Employer (Sun-Land) fails to pay. Contractor starts and wins an adjudication. Employer still refuses to pay. Contractor goes off to the TCC to get the adjudicator’s decision enforced. We have another adjudication judgment to read.

However, on closer analysis, it was clear to me that the employer’s representatives were less familiar with the adjudication process than one might like. While I do not criticise anyone for using whatever arguments are available to them in making or defending a claim, I think this point is demonstrated by the arguments the employer used to defend the summary judgment application, particularly the natural justice arguments.

Natural justice challenge

The breach of natural justice challenge went to the heart of what the adjudicator had done in terms of agreeing the timetable and then conducting the adjudication.

The judgment doesn’t say what adjudication rules applied, so I’m assuming it was under the Scheme for Construction Contracts 1998. Paragraphs 12 to 19 set out the adjudicator’s powers, but it is paragraph 13 that is important here. It gives the adjudicator the power to:

“…decide on the procedure to be followed in the adjudication…

…give directions as to the timetable of the adjudication, any deadlines…

…issue other directions relating to the conduct of the adjudication.”

This is precisely what Mr Hough, the adjudicator, did. He agreed when the parties’ submissions would be due and permitted additional submissions up to the weekend before his decision was due. Only after the event did the employer start to question the fairness of the process and argue that the contractor had a tactical advantage because it had time before it started the process, and then made the last submission.

I was pleased to see Edwards-Stuart J give short shrift to these arguments, finding as he did, that they were totally without merit and that the adjudicator could not be criticised for his approach: his directions were fair and reasonable.

Failure to deal with issues

It has been sometime since I’ve seen a judgment where one of the parties has tried to pull apart an adjudicator’s decision so thoroughly. Here the employer did not argue the adjudicator had failed to deal with a substantive element of its defence (which seems to be the current theme in natural justice challenges), but rather went through the minutiae of six elements that the adjudicator had decided on (issues such as the QS’ method of valuing snagging items, the diminution in value of the houses, delay in providing mains water and issues arising out of the supply and installation of kitchens to the houses).

Again, Edwards-Stuart J rejected each and every one, but not before having to consider the detail of what the adjudicator said. It was good to see the judge reiterate the point that there is a “fundamental difference” between an adjudicator failing to consider a party’s defence and failing simply to address some particular aspect of the evidence or an element of a submission.

Reasons for the decision

Finally, adjudicators don’t have to provide reasons, unless requested to do so. Even then, we are encouraged to keep them short (Jackson J in Carillion Construction Ltd v Devonport Royal Dockyard). On that point, it looks to me like Mr Hough did what most of us do.

MCMS Ltd Matt Molloy

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