REUTERS | Ilya Naymushin

My jurisdiction was wider than I thought!

From time to time I find myself referred to in TCC judgments. This is part and parcel of acting as an adjudicator. While this hasn’t happened for a while, this week, it has happened twice. In shooting circles, that is known as a “brace”, but I’m not a shooting man!

I think the mention in Vision Homes v Lancsville is so brief and peripheral to the overall judgment that I’m sure most people didn’t even spot it (Mr Milloy is one of my many pseudonyms, for those that didn’t). Another is Mr Malloy, who appeared in Workspace v YJL London, although I doubt I could successfully argue that Mr Malloy was not a pseudonym!

Workplace v YJL London

For those who are not familiar with this case, here’s a brief recap.

The parties were involved in a project known as “Clerkenwell Workshops”. They had a number of disputes and I dealt with three separate adjudications (although it is only the third that is relevant to Coulson J’s judgment). By the time I was appointed for the third time, the parties were part way through an arbitration with Tony Bingham as the arbitrator.

In the third adjudication I was asked a discrete question by Workspace (the employer), involving the Architect’s Certificate No.27 (which was for a negative sum) and the sum that should be repaid by YJL (the contractor) to the employer. After preparing detailed calculations, which showed that, in fact, the contractor had already overpaid the employer by just over £56,000, I decided that the employer “was not entitled to repayment of sums pursuant to Architect’s Certificate No. 27”.

After my decision was published, I was challenged by the contractor’s solicitors about this. I advised that I considered ordering a payment from the employer to the contractor was outside the scope of the notice of adjudication. In other words, I considered my jurisdiction was limited by the wording of the notice to sums that should be “repaid” to the employer.

Due to issues that arose in the arbitration, the employer started proceedings in the TCC to enforce the arbitrator’s interim award. It was during those enforcement proceedings that my decision came under the court’s scrutiny.

The court held that I had found “clear beyond doubt” that the contractor had overpaid the employer. This was based on the “inexorable logic of [my] valuation” and was an “inevitable and logical consequence of [my] valuation”. The court went on to decide that I was entitled to conclude that the contractor had overpaid the employer and that I should not have limited myself to the sums that were to be “repaid” to the employer. This was because I was asked to look at the proper valuation of Architect’s Certificate No. 27 and I should not stop when I reached a nil valuation.

What do I take from all of this?

The court decided the scope of my jurisdiction was wider than I’d concluded. I didn’t consider I had jurisdiction to direct that the employer pay back the balance. Further, this adjudication was under the JCT adjudication rules (it was a pre-2005 edition of the contract) and I didn’t consider I had a stand alone power to direct that payment could be made by the employer to the contractor.

I’m not sure that the court’s judgment is as helpful as it first appears. It is arguable that it will give adjudicators greater freedom to include in their decisions items that have not been claimed in the notice of adjudication (provided there is logic to doing so). However, this must be balanced against an atmosphere of greater uncertainly over precisely what has been referred to the adjudicator.

I foresee that, unless adjudicators exercise their judgement carefully over the extent of their jurisdiction, one consequence will be to open up more decisions to challenge, on the grounds of the adjudicator exceeding his jurisdiction, as opposed to not going far enough.

And as with all of these things, who knows, on a different day, with a different judge, the outcome may have been entirely different.

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