REUTERS | Petar Kujundzic

The adjudicator’s jurisdiction: when “substance and jurisdiction” overlap

I’m not telling you anything new when I say that the adjudicator’s jurisdiction lies at the heart of every adjudication. It is also fairly obvious that if the adjudicator has no jurisdiction to determine the dispute referred to him, ultimately, the parties will waste both their time and money as one party will refuse to pay up and the adjudicator’s decision will not be enforced by a court. Equally well established is the principle that adjudicators cannot make binding decisions about their own jurisdiction.

But how easy is it for the adjudicator to determine whether he has jurisdiction, even on a non-binding basis?

At the nomination and appointment stage

It is vital that the adjudicator asks himself whether he has jurisdiction to decide a dispute before he accepts the appointment. This may not be as easy as it sounds, since his decision will be based solely on the notice of adjudication. To some extent, the more information the notice contains, the easier the adjudicator will find this decision. In certain circumstances, it may be necessary for the adjudicator to invite submissions from the parties. However, I would ordinarily only do this if the responding party raised a challenge. In my experience, if there is a possibility of a jurisdictional challenge, the responding party will not be shy at pointing it out vociferously.

During the adjudication

The duty to consider jurisdictional matters is an on-going one. It doesn’t end once the appointment has been made. An adjudicator should continually keep the issue under review and, if, down the line, he considers that he does not have jurisdiction, he should advise the parties immediately and invite comments. Normally this would follow a challenge by a responding party, as they like to share their views about your jurisdiction with you and the referring party! In certain circumstances it may be appropriate for the adjudicator to raise the issue himself, for example if it is obvious and/or the parties are unrepresented (and especially if one of the parties is a consumer).

When substance and jurisdiction overlap

One of the questions that adjudicators often have to answer is “Is there a construction contract and, if so, what are its terms?”. This has developed in recent times to “How many contracts are there?” or “Has the contract been varied”. All of this goes to the adjudicator’s jurisdiction.

A line of case-law has developed, which Akenhead J described as cases where substance and jurisdiction overlap. It all started with Air Design (Kent) Ltd v Deerglen (Jersey) Ltd, and then Euro Construction Scaffolding Ltd v SLLB Construction Ltd and, more recently, Supablast (Nationwide) Ltd v Story Rail Ltd.

Essentially, in all of the cases the adjudicator’s jurisdiction was challenged along the same lines: the adjudicator did not have jurisdiction because disputes under more than one contract had been referred to him. The adjudicator had to decide if that was the case.

Cynics might argue that it will always be in the adjudicator’s interest to decide that there was one contract that was varied (it’s that ‘turkeys voting for Christmas’ principle). However, the adjudicator has to base his decision on the materials before him. He does his best to get it right. He usually does, as the above judgments show when it comes to enforcement.

What about the court severing an adjudicator’s decision?

There are other issues that the adjudicator also has to consider. For instance, if the judgment in Geoffrey Osborne Ltd v Atkins Rail Ltd is to be followed, and we are going to see more adjudicators’ decisions severed by the court on enforcement, adjudicators should consider recording their time against each issue. This way, if part of the decision is enforced and part severed, there is potential for less argument over his fees. While in an ideal world, adjudicator’s will always get paid, regardless of whether their decision is severed, I suspect this may not be the case in practice.

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