1. Construction Law Training 2014 :
Challenging the Adjudicator’s Jurisdiction
8 April 2014
Ben Worthington, Senior Associate
ben.worthington@olswang.com | + 44 20 7067 3541

2. The courts’ approach to
enforcement
• Robust approach to enforcement
• “The need to have the "right" answer has been subordinated to
the need to have an answer quickly…in the overwhelming
majority of cases, the proper course for the party who is
unsuccessful in an adjudication under the scheme must be to pay
the amount that he has been ordered to pay by the adjudicator.”
(Carillion Construction Ltd v Devonport Royal Dockyard (2005))
• adjudicator's decision will be enforced even if there is an error of
fact or law
• Challenge possible only where the adjudicator has acted:
• Without or in excess of his jurisdiction
• In serious breach of the requirements of natural justice
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3. Is it worth challenging
jurisdiction?
• “pay first, argue later" (Tally Wiejl (UK) Ltd v Pegram Shopfitters Ltd
(2003))
• Judicial criticism of parties "simply scrabbling around to find some
argument, however tenuous, to resist payment“ (Carillion
Construction Ltd v Devonport Royal Dockyard (2005))
• BUT:
• Challenges are not a foregone conclusion
• Recent decisions show willingness of courts to accept genuine
challenges
• Indemnity costs? CG Group Ltd v Breyer Group Plc (2013)
www.constructiveblog.com3

4. Jurisdictional issues to consider
before the adjudication
(1) Is there a statutory or contractual right to adjudicate?
(2) Has the dispute crystallised?
(3) Does that dispute arise “under the contract?”
(4) Has the dispute already been decided by an adjudicator?
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5. (1) Is there a statutory or contractual
right to adjudicate?
• Statutory adjudication:
• Is there an agreement relating to “construction operations”? (s104-s105
HGCRA 1996)
• Do any of the exemptions apply?
• Are all of the terms of the contract in writing (section 107 HGCRA for
contracts pre-1 October 2011)? See RJT Consulting Engineers Ltd v DM
Engineering (Northern Ireland) Ltd (2002)
• Contractual adjudication:
• Is there a contractual agreement to appoint an adjudicator? See Twintec Ltd
v Volkerfitzpatrick Ltd (2014)
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6. (2) Has the dispute crystallised?
• Section 108(1) HGCRA 1996: “A
party to a construction contract
has the right to refer a dispute
arising under the contract for
adjudication…”
• courts will not enforce an
adjudicator's decision that is
based on an adjudication notice
issued before the dispute
referred to adjudication has
crystallised.
• can it reasonably be said that the
claim has not been admitted?
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7. AMEC Civil Engineering Ltd v SoS
for Transport (2004)
• “dispute” should be given its normal meaning
• a dispute does not arise unless and until it emerges that the claim is not
admitted;
• It may be apparent that a claim is rejected:
• express rejection of the claim
• discussions between the parties from which objectively it is to be
inferred that the claim is not admitted
• The respondent may prevaricate or simply remain silent for a period of
time
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• A party must have a reasonable time to respond - the imposition of response
deadlines by a party is not a determining factor, but may be relevant
• If the claim is so nebulous and ill-defined that the respondent cannot sensibly
respond to it then there cannot be a dispute

8. Cantillon Ltd v Urvasco Ltd
(2008)
• Cantillon claimed an EoT and loss and expense over a particular 13 week period
• Adjudicator awarded prolongation costs in respect of delays outside that 13 week
period
• Urvasco claimed adjudicator was not entitled to consider those delays
• Decision:
• it is open to any respondent to raise any defence to the claim when it is
referred to adjudication;
• the claiming party is not limited to the arguments, contentions and evidence
put forward by it before the dispute crystallised.
• “one should look at the essential claim which has been made… [The
adjudicator] must resolve the referred dispute, which is essentially the
challenged claim or assertion but can consider any argument, evidence or
other material for or against the disputed claim or assertion in resolving that
dispute.”
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9. Checklist : Is there a crystallised
dispute?
• Has a coherent claim been put forward? Is the legal and factual basis of the
claim adequately explained?
• Was there sufficient time between the original claim and the service of the notice
of adjudication?
• Is the claim put forward substantially the same claim as that put before the
adjudicator?
• Are there on-going negotiations between the parties?
• Has the responding party:
• expressly rejected the claim;
• inferred that it rejects the claim;
• Prevaricated or refused to respond to the claim;
• remained silent about the claim;
• failed to respond within a reasonable time / by a reasonable deadline
www.olswang.com9

10. (3) Does that dispute arise
“under the contract?”
• Hillcrest Homes Ltd v Beresford &
Curbishley Ltd (2014):
• A claim for misrepresentation was not
a claim arising under a design and
build contract
• did not therefore fall within the terms
of an adjudication clause that
provided for adjudication of disputes
"under the contract".
www.olswang.com10

11. (4) Has a decision already been
reached on the issue?
• Has the same issue been referred to adjudication previously?
• Is there is an adjudicator's decision on it?
• If so, the Court will not enforce the later decision:
• S.108(3) HGCRA 1996 – “The contract shall provide that the decision is
binding until the dispute is finally determined by legal proceedings, by
arbitration… or by agreement.”
• But see Quietfield Ltd v Vascroft Construction Ltd (2006) :
• multiple adjudications concerning extensions of time for the same period are
permissible, provided only that each adjudication arises from a separate
dispute.
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12. Jurisdictional issues to consider
during the adjudication
(1) Is the adjudicator being asked to decide more than
one dispute?
(2) Was the adjudicator properly appointed?
(3) Has there been a breach of natural justice?
• Communications with the parties
• Failure to take into account submissions
• Decision making
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13. (1) Is the adjudicator being
asked to decide more than one
dispute?
• “A party to a construction contract has the right to refer a dispute arising under
the contract for adjudication under a procedure complying with this section”
(Section 108(1) HGCRA 1996) [emphasis added]
• When does a claim involve the reference to adjudication of more than one
dispute?
• David and Teresa Bothma t/a Dab Builders v Mayhaven Healthcare Ltd (2007)
• Notice of adjudication: “disputes have now crystallised as follows…”
• Four disputes identified: (1) date for completion (2) non-withdrawal of a notice of non-
completion (3) the sum of valuation no. 9 (4) the scope and validity of architect’s
instructions
• Held: two disputes had been referred to adjudication – one concerned with an extension
of time the other concerned with valuation no. 9.
• There was no link between the extension of time claim and the valuation of payment
under valuation number 9 therefore these were two separate disputes.
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14. (1) Is the adjudicator being
asked to decide more than one
dispute?
• But note court’s broad definition of dispute:
• Witney Town Council v Beam Construction (Cheltenham) Ltd (2011):
• Council argued that there were effectively four disputes being referred,
relating to: (1) the draft final account (2) the final account (3) a claim for
interest on underpayment of retention and (4) a claim for the payment of the
whole retention based on repudiatory breach;
• Held: there was only one dispute between the parties - what was due and owing to
Beam;
• if claim No 1 cannot be decided without deciding all or part of claim No 2, that
establishes a clear link and points to there being only one dispute.
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15. (1) Is the adjudicator being
asked to decide more than one
dispute?
• But note court’s broad definition of dispute (continued):
• TSG Building Services PLC v South Anglia Housing Ltd (2013):
• the contractor made its claim for compensation for termination under several heads
(overheads and profit, additional maintenance costs and interest);
• The court looked at the nature of the dispute referred to adjudication and held that
there was only one dispute, although it comprised "three primary strands or issues“;
• the courts can adopt a sensible and commercial approach in determining the
relative width of any given dispute.
• Willmott Dixon Housing Ltd v Newlon Housing Trust (2013): two referrals
submitted simultaneously to the same adjudicator did not contravene s108(1).
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16. (2) Was the adjudicator properly
appointed?
• The referring party must be appointed in strict compliance with the relevant
contractual provisions and the applicable adjudication procedure.
• Check the requirements of the contract
• Check the requirements of the adjudication nomination body (ANB)
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17. (2) Was the adjudicator properly
appointed?
• Vision Homes Ltd v Lancsville Construction Ltd (2009):
• the contract required the Notice of Adjudication to be served before
application was made to the nominating body
• Referring Party issued a Notice and requested that the RICS appoint an
adjudicator. On the same day, it issued a modified notice of adjudication
(asking the adjudicator to decide fees)
• Adjudicator decided his fees and thereby acted under the modified notice
• Held: the adjudicator had no jurisdiction to act under the modified notice - it
was a strict obligation that any request for nomination must be made at the
same time, or following, the service of a notice of adjudication.
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18. (2) Was the adjudicator properly
appointed?
• Profile Projects Ltd v Elmwood (Glasgow) Ltd (2011):
• the parties did not apply to the ANB specified in their contract
• Twintec Ltd v Volkerfitzpatrick Ltd (2014) :
• adjudicator appointed by reference to a standard form DOM/2 sub-contract,
which had not been incorporated into the parties' letter of intent
• The LoI itself was a construction contract and so the Scheme applied – the
ANB under the scheme was the same body that the Referring Party had in
fact applied to
• No jurisdiction: “the validity of the procedure by which the adjudicator was
nominated goes to the heart of his jurisdiction.”
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19. (3) Has there been a breach of
natural justice?
• Courts recognise that adjudication can be “rough justice”
due to the timescales within which decisions have to be
given
• Carillion confirms that Courts will only interfere where
there has been a material or serious breach of natural
justice
www.olswang.com19

20. (3) Has there been a breach of
natural justice?
• Bias
• Failure to address a matter in issue
• Failure to consider a submission
• Failure to consult
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21. Bias
Catalina v Norma (1938):
“Italians are all liars and will say anything to suit their book. The same thing applies
to the Portuguese. But the other side here are Norwegians and in my experience
Norwegians generally are a truthful people… I entirely accept the evidence [of the
Norwegian captain]”
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22. Failure to address a matter in
issue or consider a submission
• If an adjudicator takes an mistakenly restrictive view of his own jurisdiction, and
fails to consider an important element of the dispute as a result, that will be a
breach of the rules of natural justice.
• the adjudicator failed to address the responding party's counterclaim because
it was not mentioned in the notice of adjudication: Broadwell v K3D (2006)
• the adjudicator did not breach the rules of natural justice by refusing to consider
the employer's rejoinder, which was served after the adjudicator had refused to
give the employer permission to serve the rejoinder: GPS Marine Contractors Ltd
v Ringway Infrastructure Services Ltd (2010)
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23. Failure to consult
• Adjudicator discusses case with one party
• Adjudicator took into account a contract clause not relied on by either party and
not giving the parties an opportunity to make representations on the clause: ABB
Ltd v Bam Nuttall Ltd (2013)
• Adjudicator relies upon a report or advice provided by a third party without
provided the parties with an opportunity to make representations
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24. Issues to consider after the
adjudication
(1) Was the decision made in time?
(2) Has the adjudicator decided a dispute that was not the
one referred to him?
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25. (1) Was the decision made in
time?
• Section 108(2) HGCRA 1996
“The contract shall…
(c) require the adjudicator to reach a decision within 28 days of referral or
such longer period as is agreed by the parties after the dispute has been
referred;
(d) allow the adjudicator to extend the period of 28 days by up to 14 days,
with the consent of the party by whom the dispute was referred…”
• Barnes and Elliot Limited v Taylor Woodrow Holdings Ltd (2004): the adjudicator
must complete his decision within the 28 days or the agreed extended period, but
its subsequent communication to the parties could occur a day or two days
thereafter.
• Ritchie Brothers (PWC) Limited v David Philip (Commercials) (2005)BLR 384 : an
adjudicator's failure to reach his decision within the time limit rendered any
subsequent decision a nullity.
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26. (1) Was the decision made in
time?
• Cubitt Building & Interiors Ltd v Richardson Roofing (Industrial) Ltd (2008): A
decision which is reached within the 28 days or an agreed extended period, but
which is not communicated until after the expiry of that period will be valid,
provided always that it can be shown that the decision was communicated
forthwith.
• Objection must be made promptly:
• AC Yule v Speedwell Roofing (2007) : the challenging party had either agreed
to an extension of time by their silence or conduct or were estopped by their
silence or conduct from contending that the decision was not valid.
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27. (2) Has the adjudicator decided
a dispute that was not the one
referred to him?
• The adjudicator only has jurisdiction to decide the dispute referred to him.
• Provided he answers the correct question, he will have jurisdiction (even if he
answers it incorrectly): Bouygues (UK) Ltd v Dahl-Jensen UK Ltd (2000)
• However, if he answers the wrong question or a question which was not referred
to him, he will not have jurisdiction.
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28. (2) Has the adjudicator decided
a dispute that was not the one
referred to him?
• J G Walker Groundworks Ltd v Priory Homes (East) Ltd (2013) : A notice of
adjudication had clearly embraced variations and additions to the work to be done
under a construction contract; the adjudicator had jurisdiction to determine issues
surrounding the additional work.
• Wales And West Utilities Ltd v PPS Pipeline Systems GmbH (2014): The referring
party stated that certain aspects of a dispute were not being referred to
adjudication. The judge held that expressly stating that certain aspects of the
dispute were not being referred did not prevent the court (and the adjudicator)
from reaching a different conclusion on those points.
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29. How to challenge jurisdiction
• Reserve position and proceed
• Part 8 proceedings
• Agree to let adjudicator determine his own jurisdiction
• Injunction
• Refuse to participate
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