REUTERS | Brandon Malone

The jurisdiction minefield: tips for the responding party

It is now routine for the responding party to challenge the jurisdiction of the adjudicator. In my experience, once the adjudicator has confirmed acceptance of his appointment and the referral notice has been issued, it is advisable for the responding party to:

  • Compare the notice of adjudication and referral notice for discrepancies and bring any significant issues to the attention of the adjudicator. This includes looking for threshold jurisdictional issues or other issues which could limit the adjudicator’s jurisdiction more generally. Examples of threshold jurisdictional issues include:
    • is there a contract in writing?
    • is the correct party named in the notice?
    • is the contract an excluded operation?
    • has the adjudicator been appointed under the correct contract or by the correct nominating body?
    • has the referral notice been issued out of time?
  • Raise the potential threshold jurisdictional issues in a letter to the adjudicator, challenging his jurisdiction to decide the dispute referred and asking him to resign. The letter should:
    • set out reasoned argument;
    • include the caveat that if he decides not to resign then the responding party’s participation is without prejudice to its position that the adjudicator has no jurisdiction; and
    • reserve the right to refer to the jurisdictional challenge at any future enforcement proceedings.

The responding party should be very careful to maintain (and not waive) its reserved position if, following the challenge to his jurisdiction, the adjudicator declines to resign and says he will carry on.

A word of caution: don’t become complacent and let your guard down. In a recent case I was involved in one letter without any reservation of rights was referred to by the judge in the enforcement proceedings. This “slip” could have undermined our position in those proceedings. Luckily for us, it didn’t. This was because we had repeatedly made it clear in other letters that our participation in the adjudication was without prejudice to our position that the adjudicator did not have jurisdiction to decide the dispute referred (we argued the contract was not wholly evidenced in writing).

Having my letters poured over in detail by both counsel and the judge was a somewhat unsettling experience. It could have been professionally embarrassing had I done as opposing counsel claimed and conferred upon the adjudicator the power to decide his jurisdiction.

My advice? The responding party should ensure that it gives no indication whatsoever, at any stage of the adjudication, that it is deviating from its reserved position. While it may seem like overkill, based on my experience, it is better to be safe than sorry. In future I will therefore be repeating my jurisdiction reservations in all communications ad nauseam!

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