Adjudication
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KEYWORDS: |
Adjudication, Contract in writing, jurisdiction, waiver, HHJ Peter Coulson QC. |
In Harris Calnan Construction Co. Ltd v Ridgewood (Kensington) Ltd [2007] EWHC 2738 (TCC) HH Judge Coulson QC considered an application for summary judgment to enforce an adjudicator's decision. The issue of interest is the status of any decision by the adjudicator on his own jurisdiction.
Coulson J observed that a party that challenged the jurisdiction of an adjudicator could take one of two approaches. First, he could agree that the adjudicator should decide the question of jurisdiction, and agree to be bound by that result. Second and alternatively, he could reserve his right to argue that, whatever the adjudicator decides, the adjudicator did not have jurisdiction to reach that conclusion.
He referred to Project Consultancy Group v Trustees of the Gray Trust [1999] BLR 37, as an example of a jurisdictional challenge remained and had not been waived because the challenge was maintained all the way through the adjudication process, even though the adjudicator had dealt with the issue in the adjudication. He referred to Nordot Engineering Services Ltd v Siemens plc in which the parties had agreed that the adjudicator's decision on the question of jurisdiction would be binding and thus could not subsequently be opened up.
Coulson J suggested that earlier cases such as Whiteways Contractors (Sussex) Ltd. v Impresa Castelli Construction (UK) Ltd. [2000] had to be treated with caution. Simply because the adjudicator's decision on jurisdiction was part of his overall decision, and that overall decision was binding on the parties, that did not mean that the decision as to jurisdiction must also be binding.
Coulson J considered that the court must examine whether the parties agreed to be bound by an adjudicator's conclusion on jurisdiction. If so it was binding. If on the other hand the challenger’s position was reserved, and he made it clear that, although he was content for the adjudicator to express a view on the point, he did not agree to be bound by that view, it was not binding.
On that basis Coulson J considered the facts in the instant case. He found that there was no suggestion that Ridgewood ever reserved its position. Accordingly he considered that the adjudicator's decision as to the existence of a contract in writing could not be challenged by Ridgeway.
The above view of Coulson J was obiter because he held that the adjudicator was correct and that there was a contract in writing and therefore he had jurisdiction in any event.
A party should consider carefully whether to resist enforcement of an adjudicator's decision. If a party knows or should have known that there could be no defence to the application for enforcement then he may be required to pay costs on an indemnity basis.
Coulson J. held that was the case and referred to his previous decision in Gray & Sons (Builders) (Bedford) Ltd. v The Essential Box Co. Ltd. [2006] EWHC 2520 (TCC). He stated that the Court would not encourage parties, who had no defence to a claim based on an adjudicator's decision, to use up valuable court time and the resources of the successful party in running unmeritorious points that were doomed to fail. Accordingly he awarded indemnity costs.
There is little benefit to a party objecting to the jurisdiction of the adjudicator and agreeing to be bound by any decision of the adjudicator on his own jurisdiction. The short timescale of adjudication does not usually allow the adjudicator sufficient time to properly consider the issue except in cases where the evidence is clear. The usual approach of those involved in adjudication is to continue to object to jurisdiction and to object to the jurisdiction of the adjudicator to decide his own jurisdiction.
The failure of a party to reserve its position on jurisdiction means that if the adjudicator did not previously have jurisdiction, he has jurisdiction by the agreement of the parties. In that case if the adjudication is not a statutory adjudication it becomes a contractual adjudication. As observed in Treasure & Son Ltd v Martin Dawes [2007] EWHC 2410 (TCC) a contractual agreement to adjudicate was not subject to the same requirements as a statutory adjudication and particularly the requirement to be in writing.
Although there are distinctions between statutory and contractual adjudications, the important point is that both are enforced by the Courts. Although the type of disputes are limited in statutory adjudication, the limits of contractual adjudication are not clear.