Development project – Adjudication award – Enforcement – Construction contract — Parties disputing existence of contract– Applicant referring dispute to adjudicator — Defendant denying adjudicator’s jurisdiction — Adjudicator proceeding with reference – Claimant seeking to enforce adjudicator’s decision — Whether adjudicator having jurisdiction to decide own jurisdiction — Application dismissed
The defendant was the main shareholder and director of a company that owned a nursing home, which the company and the defendant wanted to develop. To that end, they retained an architect to prepare plans and secure planning consent. The defendant met representatives of the claimant property consultant to discuss the potential management of the project. The claimant sent an e-mail to the defendant advising that it would not invoice him until funding for the project had been secured. However, it then provided various services in connection with the project before funding had been secured. The project fell through and the claimant invoiced the defendant in respect of its fees. The defendant replied that the invoice should have been addressed to the company and was not, in any event, due to be raised at that stage.
The claimant referred the matter to adjudication. An adjudicator was appointed, but the defendant informed him in writing that he would not participate in the adjudication because the adjudicator had no jurisdiction to determine the dispute given the lack of a contract. The adjudicator continued with the reference. The defendant responded to the referral, maintaining that the adjudicator did not have jurisdiction and inviting him to express his reasons if he determined otherwise. The adjudicator made an award in the claimant’s favour.
The defendant refused to pay, whereupon the claimant brought proceedings to enforce the adjudication. It argued that the defendant had accepted the adjudicator’s jurisdiction because he had continued to be involved in the adjudication, without any or any further reservation on jurisdictional grounds. The defendant argued that he had reserved his position on the issue of the jurisdiction. In any event, the adjudicator had not determined his jurisdiction but had merely enquired into it, albeit forming a view based on a balance of probabilities such that he felt justified in proceeding.
Held: The claim was dismissed.
An express agreement giving an adjudicator jurisdiction to decide in a binding way whether he had jurisdiction would fall into the normal category of any agreement; it was necessary to show an express agreement. In order to prove an implied agreement to provide such jurisdiction, one had to look at everything material that was said and done to determine whether one could say with conviction that the parties had agreed that the adjudicator had jurisdiction. It would have to be clear that an objection had been made in respect of the adjudicator’s jurisdiction because one could not imply that the adjudicator was being asked to decide a non-existent jurisdictional issue that neither party had mentioned.
A principal way of determining the lack of implied agreement was if at any material stage shortly before or during the adjudication the objecting party had voiced a clear reservation concerning the adjudicator’s jurisdiction. By looking at every relevant thing said and done during the adjudication, one could establish whether a reservation as to jurisdiction had been intended. A waiver would arise where a party that knew or should have known of grounds for a jurisdictional objection had participated in the adjudication without reservation; such conduct would demonstrate that its non-objection on jurisdictional grounds and its active participation were intended to be and were relied on by the other party and the adjudicator in proceeding with the adjudication.
In the instant case, the defendant had raised, in his letter to the adjudicator, a jurisdictional objection at the very least on the basis that the contract was not with him. The question then arose as to whether he had done anything thereafter to abandon that reservation. At least by the time he served his response in the adjudication he was represented by a solicitor. However, that did not mean that the words used should be interpreted other than objectively. Even if a defendant to an adjudication was unrepresented, one approached the jurisdiction reservation issue on an objective basis; if the party should use non-legal or idiosyncratic language, the court must do its best to interpret what was said.
One had to interpret the response as a whole. The defendant had reserved his position on jurisdiction, albeit that he had previously said that he would not participate in the adjudication and did so. It followed that the adjudicator had not been given jurisdiction to decide his own jurisdiction and there was no implied, let alone express, agreement giving him that right. The defendant had made an adequate reservation regarding jurisdiction, he had maintained throughout the adjudication.
Jon Miller of Prettys, of Chelmsford appeared for the applicant; Stephen Whitaker (instructed by Brindley, Twist, Tafft & James, of Coventry) appeared for the defendant.
Eileen O’Grady, barrister
