Building contract – Adjudication – Award – Enforcement – Claimant entering into building contract with defendant – Dispute arising concerning work carried out at power plant – Adjudicator making award in claimant’s favour – Claimant applying to enforce award – Defendant resisting challenging adjudicator’s decision on ground of breaches of natural justice and/or wrongful delegation of decision-making function – Whether claimant being entitled to summary judgment – Application granted
A dispute concerning a contract by which the claimant was engaged by the defendant to carry out civil works at a combined cycle power plant was referred to adjudication. The adjudicator found that the value of the claimant’s work as at 31 March 2015 was approximately £36m and awarded the claimant a sum in excess of £10m.
The claimant applied to enforce the award but the defendant opposed the application. The defendant relied on three matters: (i) that the adjudicator had approached certain issues with a closed mind; (ii) that the adjudicator had delegated or appeared to have delegated parts of his decision-making role to a third party, a quantity surveyor, without notifying the parties or seeking their consent; and (iii) the adjudicator had purported to rectify or amend the contract in circumstances where neither party had requested any such amendment, and without giving them notice of his intention to do so.
Held: The application was granted.
(1) The question for the court was whether the fair-minded and informed observer, having considered all the facts, would conclude that there was a real possibility of predetermination. The circumstances had to be considered at the time when the matter came before the court, so that all the circumstances, which by then would be known to a properly informed and fair-minded observer, fell to be taken into account. However, as a matter of common sense, it would be artificial not to consider the manner in which an adjudicator went about reaching his decision when deciding whether or not there was a real danger that he had approached the issues with a closed mind: R v Inner West London Coroner, ex p Dallaglio [1994] 4 All ER 139, Medicaments and Related Classes of Goods (No 2), Re [2001] 1 WLR 700, Amec Capital Projects Ltd v Whitefriars City Estates Ltd [2004] EWCA Civ 1418 and R (on the application of Persimmon Homes Ltd) v Vale of Glamorgan Council [2010] EWHC 535 (Admin) applied.
In a letter to the parties indicating his intention to continue with the adjudication, the adjudicator had described the conclusions that he had reached as being a “non-binding opinion”. The purpose of reaching those conclusions had been for him to determine whether or not he had jurisdiction to continue the referral. He decided that he did. At no stage had he indicated that he would not entertain further submissions on the same points. It was not altogether surprising that in his decision, he had reached the same conclusion on each ground as he had in his letter. The way in which he had gone about approaching his decision showed that he was not only willing to, but had in fact, considered the matter afresh. Accordingly, the predetermination ground for challenging the decision failed.
(2) There was no evidence whatever that any material decision had been taken by the third party rather than by the adjudicator. The defendant had come nowhere near persuading the court that any relevant part of the decision-making process had been delegated to a third party. The defendant’s challenge to the adjudicator’s decision on the basis that he had delegated some of the decision-making process to a third party was without merit and failed.
(3) Although the adjudicator had used the verb “to correct” in his decision, he had been doing no more than adopting the claimant’s case, by filling a gap in a table which formed part of the contact between the parties, in the way that the claimant had asked him to. Both parties had approached the issue as a matter of construction of the contract and that was what the adjudicator did also. The adjudicator had done no more than accept the case advanced by the claimant which had been addressed by the defendant in its submissions. He had been entitled to do so in the light of the way in which the arguments had been presented to him. The defendant had had every opportunity to meet the case being advanced by the claimant which it understood perfectly well. There had been no breach of natural justice. It followed that the defendant’s challenge to the adjudicator’s decision failed in every ground and the claimant was entitled to summary judgment with appropriate interest.
Nicholas Collings (instructed by Eversheds LLP) appeared for the claimant; Simon Hughes QC and Matthew Finn (instructed by Freeths LLP) appeared for the defendant.
Eileen O’Grady, barrister
Click here to read transcript: John Sisk & Son Ltd v Duro Felguera UK Ltd
