REUTERS | Eduardo Munoz

When an adjudicator fails to “exhaust his jurisdiction”

Keen followers of adjudication case law will have noticed that there are now a few cases where adjudicators have been held to have breached the rules of natural justice, or tripped-up in the exercise of their jurisdiction, because they have not considered a party’s defence or part of it. I’m thinking of cases like Quartzelec Ltd v Honeywell Control Systems, Thermal Energy v Lentjes and Pilon v Bryer.

The issue has recently come before the Scottish Court of Session.

RBG Ltd v SGL Carbon

In RBG Ltd v SGL Carbon, the court had to consider whether the adjudicator breached the rules of natural justice by not considering all of the submissions before him (or at least a part of one). After a fairly detailed review of the adjudicator’s decision and the relevant submissions, the court decided that the adjudicator had “failed to exhaust his jurisdiction” and, obiter, that it was a breach of natural justice. The decision was not enforced.

“Failed to exhaust his jurisdiction”

The term “failed to exhaust his jurisdiction” is not something that I am familiar with. I Googled it, and found that it also appears in the judgment in CSC Braehead Leisure v Laing O’Rourke (paragraph 32, for those who may be interested). That’s another Court of Session case. I understand the phrase to mean that in failing to consider all the evidence, the adjudicator restricted the material that he considered, which restricted his own jurisdiction too much. (This seems to be similar to a situation where the adjudicator does not go far enough when he exercises his discretion. I’ll leave you to consider that. I’ve already expressed my views on that one.)

What should an adjudicator do?

As an adjudicator, it is important to ensure that your decision covers all the issues that have been referred to you. You need to bear in mind that this is not only in the interests of natural justice, but if part of a submission or the evidence has been overlooked (intentionally or inadvertently), that will always provide fertile ground for the losing party to challenge the enforcement of that decision.

Severing the decision: could that be the answer?

If an adjudicator adopts the practice of considering the entirety of a party’s submission (usually the defence) in any event, then this raises the question of whether the court should sever an adjudicator’s decision, if that was the wrong choice.

If the court severs a wrongly considered defence from the rest of the decision (and there is no guarantee that it can or will), then this would have the benefit of preserving those parts of the decision that were made within jurisdiction, rendering at least part of the decision enforceable.

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