Parties involved in construction disputes must be careful instructing third parties for written and oral advocacy before tribunals. In order that the decision isn’t set aside for fraud the consultant or consultancy should be a reputable one regulated by an industry professional body such as the RICS or CICES or is a unlicensed barrister that is regulated by the BSB and Inns of Court. By using a reputable party to represent them they will get the best value and hopefully an enforceable decision that will not be overturned due to unethical conduct.

1. Page 1 of 6
Beware a construction award obtained in arbitration, litigation and
adjudication could be set aside if it was obtained by fraud.
Parties that instruct a solicitor or barrister regulated by the UK legal bodies can expect them
to behave ethically and neither deliberately nor recklessly seek to mislead a tribunal. Indeed
such regulated lawyers know that a great disservice is done to the client as such an award
obtained by fraud can be set aside by the court.
Where parties use the services of a non-regulated claims consultant or consultancy for
written and oral advocacy they run the risk of being put in a compromised position unless
the consultant or consultancy is regulated by an industry professional body such as the RICS
or CICES or is a unlicensed barrister that is only partially regulated by the BSB and Inns of
Court.
Lord Denning said in Lazarus Estates v Beasley [1956] at 712
“No court in this land will allow a person to keep an advantage which he has obtained by
fraud. No judgment of a court, no order of a Minister, can be allowed to stand if it has been
obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it
is distinctly pleaded and proved; but once it is proved, it vitiates judgments, contracts and all
transactions whatsoever…”
In practice setting aside awards isn’t as straightforward as the passage suggests; as
applications must be made and burdens met.
ARBITRATION
The 2017 case of Celtic Bioenergy Limited v Knowles Limited [2017] EWHC 472 (TCC)
supports the position that where a party obtains an award in arbitration where the
Arbitration Act 1996 applies the court will set it aside or remit the relevant parts of the
award back to the arbitrator for reconsideration.
Section 68 of the Arbitration Act 1996 sets out the powers of the court in dealing with a
challenge on the grounds of serious irregularity.
68 Challenging the award: serious irregularity.
(1)A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court
challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the
proceedings or the award.

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A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in
section 70(2) and (3).
(2)Serious irregularity means an irregularity of one or more of the following kinds which the court considers has
caused or will cause substantial injustice to the applicant—
(a)failure by the tribunal to comply with section 33 (general duty of tribunal);
(b)the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction: see section 67);
(c)failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties;
(d)failure by the tribunal to deal with all the issues that were put to it;
(e)any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or
the award exceeding its powers;
(f)uncertainty or ambiguity as to the effect of the award;
(g)the award being obtained by fraud or the award or the way in which it was procured being contrary to public
policy;
(h)failure to comply with the requirements as to the form of the award; or
(i)any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by any
arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the
award.
(3)If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court
may—
(a)remit the award to the tribunal, in whole or in part, for reconsideration,
(b)set the award aside in whole or in part, or
(c)declare the award to be of no effect, in whole or in part.
The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part,
unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for
reconsideration.
(4)The leave of the court is required for any appeal from a decision of the court under this section.
This was held by commentators as the first reported decision in the construction sector of a
successful application under s68(2)(g) of the Arbitration Act 1996. The specific facts were
that the court found that the Defendant was found to have deliberately misled the
Arbitrator into making declarations in its favour by making misrepresentations, the Court
found that this deception was deliberate and therefore fraudulent; further obiter that
recklessness may also suffice under s68(2)(g) in specific cases where some other element of
unconscionable conduct was present. In giving judgement Jefford J criticised the

3. Page 3 of 6
defendant’s conduct and found that the Defendant was deceitful and dishonest in their
conduct.
In conclusion the court can set aside an arbitrators award due to the provisions of s68(2)(g)
of the Arbitration Act 1996.
LITIGATION
The Court of Appeal clarified the test that must be met when seeking to set aside a
judgment on the grounds that it was obtained by fraud in litigation in the case of Takhar v
Gracefield Developments Ltd and others [2017] EWCA Civ 147 which confirms that the court
must be satisfied that evidence of the fraud was not available to the innocent party at the
time of trial and could not with reasonable diligence have been uncovered then.
This resolves the uncertainty that had arisen from conflicting lower court authority as to
whether the "reasonable diligence" requirement extends to cases involving fraud or
whether fraud cases were excepted from the rule on the basis that "fraud unravels all". It
confirms that, in this context, the public policy in favour of finality of litigation takes
precedence over the desire to do justice in individual cases to the extent that they conflict .
Permission to appeal was granted by the Supreme Court in December 2017 so this may be
reversed or upheld in 2018 (UKSC 2017/0072).
ADJUDICATION
The case of Speymill Contracts v Eric Baskind [2010] EWCA Civ 120 shows that the court
treats an adjudication award differently from those of an arbitrator or judge as an
adjudicator’s decision under the 1996 Act or equivalent contractual provisions is of a
different character, the decision merely establishes the position from which the parties shall
start their arbitration or litigation and is not final.
The court set out the law at paragraphs30 to 36 of the Speymill Contracts judgement.
30. In Carillion Construction Limited vDevonport Royal Dockyard Limited [2005] EWCA Civ 1358; [2006]
BLR 15 at paragraph 52 the Court of Appeal approved the following summary of the relevant
principles:
“52…
1. The adjudication procedure does not involve the final determination of
anybody’s rights (unless all the parties so wish).
2. The Court of Appeal has repeatedly emphasised that adjudicators’
decisions must be enforced, even if they result from errors of procedure,
fact or law: …

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3. Where an adjudicator has acted in excess of his jurisdiction or in serious
breach of the rules of natural justice, the Court will not enforce his decision;
…
4. Judges must be astute to examine technical defences with a degree of
scepticism consonant with the policy of the 1996 Act. Errors of law, fact or
procedure by an adjudicator must be examined critically before the Court
accepts that such errors constitute excess of jurisdiction or serious breaches
of the rules of natural justice:”
In setting out this summary, I have omitted the authorities which the Court of Appeal listed in support
of the various propositions.
32. At paragraph 53 the Court of Appeal set out a further proposition, which the court held to be correct
at paragraph 81. That proposition reads as follows:
“53…
1. If an adjudicator declines to consider evidence which, on his analysis of
the facts or the law, is irrelevant, that is neither (a) a breach of the rules of
natural justice nor (b) a failure to consider relevant material which
undermines his decision on Wednesbury grounds or for breach of para 17 of
the Scheme. If the adjudicator’s analysis of the facts or the law was
erroneous, it may follow that he ought to have considered the evidence in
question. The possibility of such error is inherent in the adjudication system.
It is not a ground for refusing to enforce the adjudicator’s decision.”
33. Neither Carillion nor any of the cases cited by the Court of Appeal in Carillion involve allegations of
fraud or theft. There are, however, three authorities in which the effect of fraud has been considered
in the context of adjudication.
34. In Pro-Design Limited v New Millenium Experience Company Limited (Liverpool TCC, 26
th
September
2001) a lighting sub-contractor sought to enforce an adjudicator’s decision against a main contractor.
It was alleged in the enforcement proceedings that the claimant was a fraudulent vehicle, being a
company owned and operated by an employee of the defendant. The court refused to grant summary
judgment for the claimant on the basis of the adjudicator’s award. It appears from the judgment that
the whole fraud issue arose after the conclusion of the adjudication.
35. In Andrew Wallace Limited v Artesan Regeneration Limited [2006] EWHC 15 TCC the claimant sought
to enforce an adjudicator’s award that the claimant should be paid architectural fees of £128,845. The
defendants, who had employed the claimant, advanced several lines of defence including allegations
of fraud. HHJ Kirkham rejected the allegations as untenable. She added that the court’s enforcement
of the decision would not constitute assistance in the perpetration of a fraud. The facts upon which the
fraud allegation was based emerged after the date of the adjudication. However, the judge concluded
that on the evidence the defendant had no real prospect of establishing its allegation of fraud.
36. In SG South Limited v Kings Head Cirencester LLP [2009] EWHC 2645 the defendant employer raised
allegations of fraud in adjudication proceedings. The defendant failed to establish any factual basis for
his allegations. Akenhead J analysed the legal position as follows:
“19. So far as fraud is concerned, it is or may be, depending on the facts, a
defence in adjudication proceedings as it is in court or arbitration
proceedings. There is nothing in the Housing Grants Construction and
Regeneration Act 1996 to limit any type of dispute “arising under” the
construction contract in question being referred to adjudication (see Section
108). Thus, it might be a defence, for instance, for a defending party to
assert that the contract was induced by fraudulent misrepresentation or

5. Page 5 of 6
that the certificate on which the claiming party relies was procured by
fraud. It is perhaps more arguable that a claiming party may not be able to
refer a claim for the tort of fraud or deceit to adjudication (depending on
the wording of the contractual adjudication clause); it might be arguable
that such a claim does not arise “under” the contract as such. I do not have
to decide that point, even more so because I have not heard full argument
on the point. Obviously it may well properly be a defence to an adjudication
claim for work done and materials and plant supplied for the defending
party to argue that the work, materials or plant said to have been provided
was not in fact provided; part of that defence may be that on the evidence
some of the claim is based on forged invoices or on some other criminal or
fraudulent behaviour; that may be the “cut and thrust” of some types of
construction dispute.
20. Some basic propositions can properly be formulated in the context
albeit only of adjudication decision enforcements:
(a) Fraud or deceit can be raised as a defence in adjudications provided
that it is a real defence to whatever the claims are; obviously, it is open to
parties in adjudication to argue that the other party’s witnesses are not
credible by reason of fraudulent or dishonest behaviour.
(b) If fraud is to be raised in an effort to avoid enforcement or to support
an application to stay execution of the enforcement judgment, it must be
supported by clear and unambiguous evidence and argument.
(c) A distinction has to be made between fraudulent behaviour, acts or
omissions which were or could have been raised as a defence in the
adjudication and such behaviour, acts or omissions which neither were nor
could reasonably have been raised but which emerge afterwards. In the
former case, if the behaviour, acts or omissions are in effect adjudicated
upon, the decision without more is enforceable. In the latter case, it is
possible that it can be raised but generally not in the former.”
I agree with that analysis. I also note that on 17
th
February 2010 (after the hearing in this case)
Ramsey J adopted a similar approach in GPS Marine Contractors Ltd v Ringway Infrastructure Services
Ltd [2010] EWHC 283 (TCC).
In conclusion if a party is aware of a fraud before the adjudication proceedings and the
adjudicator determines the question of fraud then the decision of the adjudicator is capable
of enforcement. However, if a party is aware of a fraud before the adjudication takes place,
but does not raise it, he will not be able to raise the fraud allegation as a defence to
enforcement. If new matters concerning fraud emerge after the adjudicator has made his
decision but before enforcement, those matters can form the basis for resisting
enforcement.

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CONCLUSION
Parties involved in construction disputes must be careful instructing third parties for written
and oral advocacy before tribunals. In order that the decision isn’t set aside for fraud the
consultant or consultancy should be a reputable one regulated by an industry professional
body such as the RICS or CICES or is a unlicensed barrister that is regulated by the BSB and
Inns of Court. By using a reputable party to represent them they will get the best value and
hopefully an enforceable decision that will not be overturned due to unethical conduct.