Building contract – Adjudication – Appointment of adjudicator – Contract providing for either party to request nomination of adjudicator by RIBA – Claimant contractor wanting adjudicator with legal qualifications – Claimant contacting particular adjudicator to check availability and suggesting name in application to RIBA – Adjudicator appointed and giving decision – Defendant employer disputing validity of appointment – Whether implied term that neither party would seek unilaterally to influence nominator’s decision – Whether apparent bias – Claim allowed
The defendant local authority engaged the claimant building contractor to carry out works to a housing estate under a building contract in the JCT Intermediate Form (1998 ed), with amendments. Clause 9A.2 provided that, in the event of a dispute being referred to adjudication, the parties could either agree on an adjudicator or each could apply for a nominee to the Royal Institute of British Architects (RIBA). Both sides served notices alleging breaches of contract and the claimant decided to refer the matter to adjudication. Since it wanted to appoint an adjudicator who was legally qualified to deal with the issues in dispute, its solicitor conducted an Internet search for a RIBA panel member with legal qualifications. Having found one, it telephoned the member, H, to establish that he would be available to act on an adjudication if so asked. The claimant then served a notice of adjudication on the defendants and applied to RIBA to request the nomination of an adjudicator; on the application form, it suggested that H should be appointed if he were available. RIBA duly nominated H, who accepted the appointment.
The defendants considered that the manner of H’s appointment was improper, but H took the view that his appointment was valid. He therefore proceeded with the adjudication and delivered a decision. The defendants refused to pay the fees specified in the decision, arguing that the decision was void: (i) because the adjudicator had not been appointed in accordance with the terms of the contract, which contained an implied term that neither party should seek unilaterally to influence the nominator’s decision as to the adjudicator; or (ii) on the ground of apparent bias, arising primarily from the telephone conversation with H prior to his appointment. The claimant sought a declaration that the decision was valid and enforceable and applied for summary judgment on that claim.
Held: The claim was allowed.
(1) The term suggested by the defendants should not be implied into the contract. Clause 9A.2 did not expressly bar the party that sought the appointment of an adjudicator from making representations to RIBA as to the attributes or even the name of the person to be appointed. Nor was there any need to imply such a term, since the main mischief against which it was said to guard, namely preventing unilateral representations by the party seeking nomination, had no obvious support in commercial or practical terms: BP Refinery (Westernpoint) Pty Ltd v Shire of Hastings (1979) ALJR 20 applied. It is not necessarily wrong or unhelpful for a party to make representations, and RIBA, which is an independent, respectable and respected institution, would not be in breach of its rules if it took into account or acted upon such representations.
(2) Judging objectively by the standards of the fair-minded and informed observer, an apparent bias did not arise in the instant case. The claimant had not been obliged to liaise with the defendants before applying to RIBA to nominate an adjudicator. Ultimately, RIBA, not the claimant had selected H. There was nothing suspicious in the act of telephoning H to check his availability or whether a conflict arose; that was unexceptional and could be a sensible and practical step to take. The claimant had not been obliged to inform the defendants that it had contacted H for those limited purposes: AMEC Capital Projects Ltd v Whitefriars City Estates Ltd [2004] EWCA Civ 1418; [2004] 1 All ER 723 applied.
Edwin Glasgow QC and Karim Ghaly (instructed by Fenwick Elliot LLP) appeared for the claimant; David Matthias QC (instructed by the legal department of Camden London Borough Council) appeared for the defendants.
Sally Dobson, barrister
