UK Adjudicators January 2020 Newsletter

WWW.UKADJUDICATORS.CO.UK
JANUARY 2020 NEWSLETTER
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EDITORS COMMENTS
With the start of 2020 upon us I would like to
wish you all a very happy and prosperous New
Year.
Our panel of adjudicators for UK and Irish
adjudications has grown in the last 12 months
and our international panel now includes a
growing number of practising international
adjudicators drawn from a multitude of
jurisdictions and well-known dispute board
members.
Having had chance to review the eighteenth
report of the Adjudication Society I am
pleased to share with you some highlights.
As of April 2019, UK Adjudicators were the
seventh largest panel of UK adjudicators out
of the eighteen that contribute to the
Adjudication report, as well as being the only
adjudicator nominating body that offers a free
adjudicator nomination service. Of all
referrals in the report some 60% were seeking
payment of a sum less than £100,000.00.
The 2020 Edinburgh Adjudication &
Arbitration Conference takes place on Friday
the 6th March in Edinburgh. The venue for the
2020 conference will be the Royal Society of
Edinburgh at 25-26 George Street, Edinburgh.
If you would like to attend, speak, support,
sponsor or exhibit please get in touch to
express your interest. Panel members can
book discounted tickets through the
Eventbrite website link which can be found at
the rear of this newsletter.
The 2020 London Adjudication & Arbitration
Conference takes place on the 20 August in
central London. If you would like to attend,
speak, support, sponsor or exhibit please get
in touch to express your interest. We have a
much larger venue being lined up for the 2020
venue as we reached our capacity limits in the
last venue.
UK Adjudicators are a supporting
organisation for the Dispute Resolution Board
Conference that takes place in Cape Town,
South Africa in May 2020. If you can attend;
this is an excellent networking and knowledge
sharing event for those interested in Dispute
Boards and being a Dispute Board Member.
As always, I would encourage you to forward
articles, commentaries, news and events that
our readers would find of interest and share
details of our panel and nomination service
with friends, colleagues and clients.
We have taken a table at the SCL London
lunch on the 7 February 2020 and panellists
are able to attend. Please email if you would
like to attend as the places are available at
cost.

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There is also an opportunity to attend the
Cheltenham Gold Cup on the 13 March 2020
as we have a few spaces available in a
hospitality box.
If you can organise a local event or host an
event for us, please do get in touch. We hope
to have a North West event in the first
quarter of 2020 and will provide more details
in due course.
Several the industries adjudicator nominating
bodies are currently working towards a
uniform low-cost scheme. We are supporting
this and will provide further details
imminently.
Sean Gibbs LLB(Hons) MICE LLM FCIOB FRICS
FCIARB, is a director with Hanscomb
Intercontinental and is available to serve as an
arbitrator, adjudicator, mediator, quantum
expert and dispute board member.
sean.gibbs@hanscombintercontinental.co.uk
ADJUDICATOR’S DECISION
UNENFORCEABLE BASED ON A
BREACH OF NATURAL JUSTICE
In Corebuild Ltd v Cleaver and another [2019]
EWHC 2170 (TCC), the Technology and
Construction Court refused an application to
enforce an adjudicator’s decision because of
a material breach of the rules of natural
justice. In reaching its decision, the Court held
that the adjudicator had determined a
question of repudiatory breach on the basis of
a factual finding that had not been argued in
submissions, and which the responding party
had not had opportunity to respond to or
adduce evidence.
The Claimant initially referred the dispute to
adjudication, arguing that the Defendants had
invalidly terminated the contract and were in
repudiatory breach. The Defendants argued
that, even if the termination had been invalid,
it was not a repudiatory breach as they had
relied on the expertise and judgement of the
Contract Administrator when terminating the
contract. The Claimant did not dispute the
fact that the Defendants’ had relied on the
Contract Administrator; they instead argued
that any such reliance was irrelevant and
would constitute repudiatory breach in any
event.

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The adjudicator found in the Claimant’s
favour, finding as a matter of fact that the
Defendants had not relied on the Contract
Administrator not least as they were both
involved in the administration of the Contract.
The Claimant subsequently applied for
summary judgement to enforce the
adjudicator’s decision. The Defendants
resisted the enforcement, arguing that there
were four grounds for not enforcing the
decision as the adjudicator:
(Ground 1)
Had answered the wrong question in relation
to contractual termination, with the result
that he failed to address the Defendant’s
actual case;
(Ground 2)
Had no regard to any of the Defendants’
evidence going to the progress of the works;
(Ground 3)
Had rejected the Defendants' submission as to
whether wrongful termination was
repudiatory on the basis of a point which was
unargued and which the Defendants had no
opportunity to address;
(Ground 4)
Proceeded to determine an extremely
complicated quantum case, so that the
adjudicator was considering a dispute which
had not crystallised and/or one which the
Defendants did not have fair opportunity to
deal with.
The court only accepted ground 3 as
rendering the adjudicator’s decision
unenforceable as a breach of natural justice
because the adjudicator had answered the
question of repudiatory breach, not on the
basis advanced by the Claimant, but on the
factual finding that the Defendant had not
relied on the Contract Administrator’s
judgment when terminating the contract. This
point had not been argued, this denying the
Defendant the opportunity to address it.
The decision was in line with the principles set
out in the Court of Appeal decision in
Cantillion Limited v Urvasco Limited [2008]
EWHC 282. Mr. Justice Akenhead concluded
at paragraph 57:
"(a) It must be first established that the
Adjudicator failed to apply the rules of natural
justice;
(b) Any breach of the rules must be more
than peripheral; they must be material
breaches;

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(c) Breaches of the rules will be material in
cases where the Adjudicator has failed to
bring to the attention of the parties a point or
issue which they ought to be given the
opportunity to comment upon if it is one
which is either decisive or of considerable
potential importance to the outcome of the
resolution of the dispute and is not peripheral
or irrelevant.
(d) Whether the issue is decisive or of
considerable potential importance or is
peripheral or irrelevant obviously involves a
question of degree which must be assessed by
any judge in a case such as this.
(e) It is only if the adjudicator goes off on a
frolic of his own, that is wishing to decide a
case upon a factual or legal basis which has
not been argued or put forward by either side,
without giving parties the opportunity to
comment, or where relevant put in further
evidence, that the type of breach of the rules
of natural justice with which the case of
Balfour Beatty Construction v The London
Borough of Lambeth [2002] was concerned
comes into play. It follows that, if either party
has argued a particular point and the other
party does not come back on the point, there
is no breach of the rules of natural justice in
relation thereto."
Although there may be circumstances in
which it is possible to demonstrate on
summary judgment that the answer the
adjudicator arrived at was so obviously
correct, that the failure to have allowed the
point to be properly ventilated is not material,
generally, it is sufficient for a party to show
that the substance of the point with which
they were deprived of the opportunity to
engage with, was properly arguable as it had a
reasonable prospects of success. The Court’s
decision is in line with other authorities as the
adjudicator had made their decision on facts,
which neither party had argued, and the
Defendants had no opportunity to address.
An adjudicator should decide the dispute
based on the submissions which have been
made by the parties, otherwise there is a risk
that the decision may be challenged and
deemed unenforceable if they have taken
secret evidence without putting giving the
parties the opportunity to consider and
challenge it.
MAYLASIAN UPDATE
In the important cases of Jack-In Pile (M) Sdn
Bhd v Bauer (Malaysia) Sdn Bhd and Ireka
Engineering & Construction Sdn Bhd v PWC
Corporation Sdn Bhd and two other appeals
the Federal Court Malaysia delivered its
grounds of judgment holding that the CIPAA
only applies prospectively to contracts
entered into after CIPAA came into force,
which was on the 15 April 2014.

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Jack-In Pile was appointed by Bauer as a
subcontractor through a letter of award dated
16 March 2011. The letter of award contains a
pay-when-paid clause where all payments to
Jack-In Pile shall only be made within seven
days from the date Bauer received its related
progress payments from the employer. In
reliance of that clause, Bauer takes the
position that it has no obligation to pay Jack-
In Pile until and unless it receives payment
from the employer. In return, Jack-in-Pile
relied on Section 35 of CIPAA which renders
pay-when-paid clauses void. Jack-In Pile
initiated adjudication proceedings against
Bauer and obtained an adjudication decision
where Bauer was required to pay the sum of
RM 906,034.00. Jack-In Pile applied to enforce
the adjudication decision. Bauer applied to set
aside the adjudication decision on the main
ground that Section 35 of CIPAA does not
apply retrospectively to the dispute as parties
have exercised their contractual rights under
the pay-when-paid clause before CIPAA was
enacted.
The Federal Court affirmed the Court of
Appeal's decision that the CIPAA applies
prospectively and in making its decision, the
Federal Court expressly disagreed with the
High Court in the case of UDA Holdings.
The CIPAA applies prospectively as it affects
substantive rights of parties by providing an
additional avenue for parties to commence
legal actions to claim for monies due and not
just a mere change of forum (from court or
arbitration to adjudication). It creates a new
avenue for access to justice and is not merely
a procedural legislation as the procedural
regime exists as a by-product of this
substantive right.
Section 35 of CIPAA is concerned, it prohibits
parties to rely upon payment arrangements.
Its applicability is prospective as well and
cannot be relied on to void the pay-when-paid
clause entered into before 15 April 2014.
The Federal Court also considered Sections 2,
3 and 41 of CIPAA which set out the
applicability and non-applicability of CIPAA.
The Federal Court concluded that Parliament
would have included an express section in
CIPAA if it was intended to apply
retrospectively.
In the case of Ireka Engineering, the High
Court found for PWC Corporation and held
that the adjudicator was right in declining
jurisdiction over and beyond the
project/contract before him given that the
other two contracts were before different
adjudicators. This was also affirmed by the
Court of Appeal. The arguments that CIPAA
applies prospectively were raised by Ireka in
the Court of Appeal.

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The same quorum who heard Jack-In Pile
heard the current appeal and decided (on the
same grounds) that CIPAA applies
prospectively. The Federal Court did not
address the cross contractual set off issue
which remains alive today.
The Federal Court's decisions in Jack-In Pile
and Ireka impacts all construction contracts
entered into before 15 April 2014 as the
parties can no longer resort to statutory
adjudication under CIPAA.
ADJUDICATION WATCH: 2019 CASE
LAW REVIEW AND UPDATE
In the second of Growling’s retrospective
reviews of the approach of the Technology
and Construction Court (TCC) to adjudication
challenges in 2019, their construction team
has analyzed further significant decisions.
• Hitachi Zosen Inova AG v John Sisk &
Son Ltd [2019]
• MG Scaffolding (Oxford) Ltd v
Palmloch Ltd [2019]
• Willow Corp S.À.R.L. v MTD
Contractors Ltd [2019]
Same/substantially same dispute challenge -
comparing 'referrals' incorrect
Hitachi Zosen Inova AG v John Sisk & Son Ltd
[2019]
This decision centres on a challenge to an
adjudicator's jurisdiction based on paragraph
9(2) of the Scheme for Construction Contracts
1998 as amended (the Scheme) which
provides:

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"An adjudicator must resign where the
dispute is the same or substantially the same
as one which has previously been referred to
adjudication, and a decision has been taken in
that adjudication."
Background
• Sisk was appointed as sub-contractor
by Hitachi to provide design and
construction services in relation to a
new power plant in Yorkshire for a
price of over £44 million.
• Disputes arose over payments due to
Sisk and numerous adjudications were
commenced over time.
• In Adjudication 2, Sisk sought
payment for works it claimed
amounted to variations, including an
item known (between the parties) as
Event 1176. In his decision, the
adjudicator decided that Event 1176
'was' a variation but stated he did not
have sufficient details to value those
works.
• In Adjudication 8, Sisk then sought a
valuation of Event 1176, claiming
around £995k plus VAT. Hitachi raised
a jurisdictional challenge arguing that
the claim in Adjudication 8 was the
same or substantially the same as in
Adjudication 2. The adjudicator went
on to value Event 1176 at around
£826k plus VAT - Hitachi did not pay
and these proceedings were
commenced to enforce the decision in
Adjudication 8.
Decision
The TCC enforced the decision in Adjudication
8.
Mr Justice Stuart-Smith emphasised the
importance of comparing "what was referred
in the eighth adjudication and what was
decided in the second……It is only if one
compares what was referred in each
adjudication that a misleading and irrelevant
similarity between the two referred disputes
appears".
He went on to address 2 questions.
What did the adjudicator in Adjudication 2
'decide' about Event 1176?
The TCC held that the adjudicator in
Adjudication 2 decided that Event 1176 was a
variation that required valuation but that, as
insufficient details had been provided, no sum
was payable to Sisk pursuant to Payment
Application 6 for Event 1176.
Is the dispute 'referred' in Adjudication 8 the
same or substantially the same as the dispute
'decided' by the adjudicator in Adjudication 2
about Event 1176?

8 | P a g e
The TCC held that the referred dispute in
Adjudication 8 was the valuation of Event
1176 - "precisely what the adjudicator
declined to decide in the second adjudication
for want of substantiating evidence at that
time". Therefore the dispute referred in
Adjudication 8 was 'not' the same as the
dispute decided in Adjudication 2.
Commentary
Although not new law, this is an instructive
decision as it is a good example of how 'not'
to analyse a potential or contended
jurisdictional challenge based on paragraph
9(2) of the Scheme ie the same/substantially
the same dispute in adjudication. Referral
should not be compared to referral - it is the
earlier 'decision' which is to be compared to
the current 'referral'.
As Mr Justice Stuart-Smith explained, this
approach reflects the 'interim' nature of the
adjudication process which is intended "for
the protecting and promoting of cashflow in
the construction industry rather than a
system of litigation that is designed to ensure
finality from the outset". Different principles
apply.
Use of respondent's brand name on notice of
adjudication did not affect validity
MG Scaffolding (Oxford) Ltd v Palmloch Ltd
[2019]
Background
This dispute arises out of the provision of
scaffolding services in 2018. By the time of
these TCC proceedings, the parties were in
agreement that the correct parties were MG
Scaffolding (Oxford) Ltd (MGS) and Palmloch.
In December 2018, MGS commenced an
adjudication alleging an entitlement to
payment based upon the absence of a valid
pay less notice following an application for
payment. MGS' Notice of Adjudication was
addressed to MCR Property Group.
Palmloch raised a jurisdictional challenge
stating that MCR Property Group had no legal
existence and was simply a brand name used
by Palmloch - MCR had not entered into a
contract with MGS.
Decision
The TCC stated that the approach must be to
consider whether the Notice of Adjudication
identified the correct Responding Party, by
• objectively assessing the Notice;
• construing the Notice as a whole
against its contractual setting;
• considering how it would have
informed a reasonable recipient; and

9 | P a g e
• concentrating on substance rather
than form.
A misdescription of a party in a Notice of
Adjudication does not of itself affect the
validity of the Notice, although it may be
different if there is a genuine lack of clarity as
to the proper parties. Here, there was no lack
of clarity and no ambiguity. The TCC rejected
Palmloch's contentions and enforced the
adjudicator's decision. Using the Responding
Party's trading name did not invalidate the
Notice of Adjudication.
In terms of preserving its jurisdictional
challenge, this was done successfully by
Palmloch as "…[a]t no time was a step in the
Adjudication…… taken without reservation".
Commentary
Whilst parties should take every care when
preparing adjudication notices and related
documents, this decision restates the
principle of substance over form and an
objective assessment by a "reasonable
recipient".
A pragmatic approach is always
recommended in adjudication as in all dispute
resolution processes - "we may be technically
right on this point but ultimately, are the time
and costs justified?" In most cases,
concentrating on the substance of the dispute
leads to more favourable outcomes overall.
Severance of an adjudication decision - part
only enforced
Willow Corp S.À.R.L. v MTD Contractors Ltd
[2019]
Background
In 2015, Willow appointed MTD Contractors
to design and build the Nobu Hotel in
Shoreditch; works were to be completed by 3
February 2017. The project was delayed and
in June 2017, the parties entered into a
supplemental agreement (the SA) which
referred to a revised date for Practical
Completion (PC) of 28 July 2017.
After further disputes relating to delay,
various adjudications took place.
Adjudication - Mr Cope
Mr Cope (the adjudicator) decided that the SA
"did not deem Practical Completion to have
been achieved on 21 (sic) July 2017, but
rather imposed an amended obligation on
MTD to complete the works in order to
achieve Practical Completion by that date".
Adjudication - Mr Molloy
In a further adjudication, Mr Molloy (the
adjudicator) was bound by Mr Cope's finding
on the SA but indicated that he agreed with
Mr Cope in any event.

10 | P a g e
Mr Molloy decided that on the true
construction of the SA, the Employer's Agent
was required to certify PC regardless of the
extent of any outstanding works provided that
there was an agreed list of such work. Since
there was such a list, he concluded that
Willow was not entitled to claim liquidated
damages of £715,000 for the period between
28 July and 13 October 2017.
Having rejected the claim for liquidated
damages, Mr Molloy ordered that Willow,
should pay £1,174,854.92 plus VAT and
interest comprising the balance payable under
the building contract less MTD's liability to
Willow of £841,245.08 in respect of defects,
professional fees and loss of profits.
No payment was made by Willow and these
proceedings in the TCC followed.
Decision
• The TCC held that the natural and
ordinary meaning of the SA did not
require Willow to accept that PC had
been achieved simply upon
agreement of a list of outstanding
works. Rather, MTD was required in
fact to achieve PC by 28 July 2017,
save only in respect of scheduled
works.
Mr Molloy was therefore in error in
dismissing Willow's claim for
liquidated damages of £715,000 for
the period 28 July to 13 October 2017.
• Willow also challenged Mr Molloy's
decision on the basis of natural justice
- this challenge failed.
• The important question then arose of
the severability (or not) of Mr
Molloy's decision. The TCC considered
previous case law, emphasizing that
the key issue was whether or not "one
can clearly identify a core nucleus of
the decision that can be safely
enforced".
• In this case, the TCC held that "Mr
Molloy's [error in his] dismissal of the
claim for liquidated damages .....did
not infect the balance of the
decision". The balance of the decision
was therefore enforced.
Commentary
This decision again reflects the TCC's repeated
emphasis on ensuring that the intentions of
the Housing Grants, Construction and
Regeneration Act 1996 as amended are
facilitated by the courts, wherever possible.
Mr Justice Pepperall in fact stated that " [i]t
would…… further the statutory aim of
supporting the enforcement of adjudication
decisions pending final resolution …. if the
TCC were rather more willing to order
severance where one can clearly identify a

11 | P a g e
core nucleus of the decision that can be safely
enforced". [emphasis added]
This case (as a clear example of severance in
practice) may work to dissuade some
challenges to adjudication decisions if the
challenging party risks a partial enforcement
in any event (plus delay and wasted costs). Mr
Justice Pepperall was entirely clear in this
judgment: "the good can and should be
severed from the bad" to allow enforcement
of the balance of the adjudicator's decision.
https://gowlingwlg.com/en/insights-
resources/articles/2019/adjudication-watch-
2019-case-law-review-part-2/
Ashley Pigott
Partner
Gowling WLG
ashley.pigott@gowlingwlg.com
Cathy Moore
PSL Principal Associate
Gowling WLG
cathy.moore@gowlingwlg.com
Gowling WLG
Two Snowhill,
Birmingham,
B4 6WR,
United Kingdom,
DX 312501
Birmingham 86
T: +44 (0)370 903 1000
F: +44 (0)370 904 1099

12 | P a g e
TCC JUDGEMENTS
November
• Everwarm Ltd v BN
Rendering Ltd [2019] EWHC
3060 (TCC) (18 November
2019)
• Hochtief (UK) Construction
Ltd & Anor v Atkins Ltd
[2019] EWHC 3028 (TCC) (11
November 2019)
• Midal Cables Ltd v Amec
Foster Wheeler Group Ltd
[2019] EWHC 3337 (TCC) (22
November 2019)
December
• Alstom Transport UK Ltd v
Network Rail Infrastructure
Ltd [2019] EWHC 3585 (TCC)
(20 December 2019)
• Amey LG Ltd v Aggregate
Industries UK Ltd [2019]
EWHC 3488 (TCC) (17
December 2019)
• ISG Construction Ltd v
English Architectural Glazing
Ltd [2019] EWHC 3482 (TCC)
(16 December 2019)
• Munkenbeck and Marshall &
Anor v The Vinyl Factory Ltd
& Ors [2019] EWHC 3225
(TCC) (02 December 2019)
SCL INTERNATIONAL CONFERENCE
2020
The Society of Construction Law 9th
International Conference is being held at the
Cordis Hotel Auckland from the 4th
to the 6th
November 2020.
The Right Honourable Lord Justice Coulson
will be a keynote speaker at the Conference.
http://www.constructionlaw2020.com/scl20

13 | P a g e
Securing Payment and Adjudicating under a
“Hybrid” Contract
Wednesday, 8 January 2020
Birmingham
Insolvency Adjudications
Thursday, 6 February 2020
Glasgow
DRBF CONFERENCES 2020
The DRBF International Conference takes
place from the 27 to 29 May 2020 at the
Radisson Blu Cape Town, South Africa.
FIDIC CONFERENCES 2020
ICC-FIDIC International Construction
Contracts Conference 2020, São Paulo, Brazil
10 February, 2020 - 08:00 to 11 February,
2020 - 19:30 https://law.knect365.com/fidic-
international-contract-users/
FIDIC GAMA Conference 2020, Gaborone,
Botswana 19 April, 2020 - 08:30 to 21 April,
2020 - 19:30 http://www.fidicgama2020.com/

14 | P a g e
FIDIC CONFERENCE 2020
The next FIDIC Annual International
Infrastructure Conference will be in Geneva
on 13 September 2020 to 15 September 2020.
http://fidic.org/events/conferences/annual-
conference-eoi
UK ADJUDICATORS 2020
EDINBURGH ADJUDICATION &
ARBITRATION CONFERENCE
The 2020 conference takes place on the 6
March 2020 at the Royal Society of Edinburgh
at 25-26 George Street, Edinburgh. It is a full
day conference with lunch and refreshments
provided.
UKA Panel members can book a reduced-price
ticket through the Eventbrite booking
website:
https://www.eventbrite.com/e/2020-
edinburgh-adjudication-arbitration-
conference-tickets-81052019773?utm-
medium=discovery&utm-
campaign=social&utm-
content=attendeeshare&aff=escb&utm-
source=cp&utm-term=listing

UK Adjudicators January 2020 Newsletter

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UK Adjudicators January 2020 Newsletter