REUTERS | Kim Hong-Ji

TCC busy with two novel Part 8 applications in as many weeks

It is only the beginning of February and already there is a new trend developing in the TCC: parties are making Part 8 applications during an adjudication. This is something I welcome (it was on my wish list for 2009).

By making the application early (either before the adjudication starts, or shortly thereafter), the parties potentially cut out the risk (and costs) of proceeding without the adjudicator having jurisdiction. This avoids wasting everyone’s time, could save money and also reduces the risk of me, as the adjudicator, not getting paid if I investigate jurisdiction and conclude that I don’t have any.

In Dalkia v Bell, where the question for the court was: “which contract conditions apply?”, Coulson J said the adjudicator was correct to conclude that the defendant’s standard terms and conditions had been incorporated into the contract. This was relevant to his appointment and his jurisdiction.

Deciding which contract terms apply is quite common for an adjudicator. Provided there is an underlying contract with a right to adjudicate then making this sort of decision is within my jurisdiction – either as a dispute “under” or “in connection with” the contract. I am not sure this is an example of the court widening the adjudicator’s jurisdiction; it simply affirms the current position.

Interestingly, in Dorchester Hotel v Vivid Interiors, Coulson J had to consider whether the TCC should intervene in an ongoing adjudication in connection with potential breaches of the rules of natural justice. Everyone who is familiar with adjudication is aware of the possibility of an “ambush” (and much has been written on the subject over the years), but this is the first time I’ve seen a party try to use the court in this way.

It is perhaps unsurprising that the court rejected the application. However, in a wider context, if it is appropriate to use the Part 8 procedure during an adjudication (which Coulson J said it would be, in limited circumstances, although maybe not because of an “ambush”), then we can only speculate over what the parties will ask the court to decide next:

  • How about an application to the court to amend an “unfair” timetable?
  • Or, if the responding party receives the notice of adjudication and straight away starts a second adjudication, how about an application that any decision under the first adjudication should only be capable of enforcement after the second decision has been given. (This might allow a set-off, second decision against first decision, see Akenhead J’s judgment in YCMS Limited v Stephen and Miriam Grabiner.)

Finally, with the current cash flow problems many companies face, we may start to see more and more examples of the situation in Able Construction v Forest Property, where one company buried its head in the sand and did nothing, including failing to attend the enforcement hearing.

In his judgment, Coulson J penalised the defendant with an indemnity costs order, plus it was ordered to pay interest on the outstanding sum at 8% over base, under the Late Payment of Commercial Debts (Interest) Act 1998. It looks like it will have been an expensive few months for a defendant who, apparently, could not afford to instruct solicitors to attend the enforcement hearing and still has a building to complete. But it was nice to see the adjudicator got paid!

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