Reference:  EWHC 1113 (TCC)
Date: 30 April 2021
Judge: Veronique Buehrlen Q.C.
Keywords: Adjudicators’ decisions; Construction disputes; Enforcement; Jurisdiction; Summary judgments
This was an application for summary judgment by the Claimant (Prater, a specialist building envelope contractor) for the enforcement of an adjudication decision (Decision 4) against Defendant (Sisk, a provider of construction services).
The Subcontract was for the design, supply, delivery and installation of envelope façade works to a Boeing Fleet aircraft maintenance hangar, office and plant room at London Gatwick Airport. The Subcontract Works had been subject to delays and changes, and four adjudications had taken place. In the Second Adjudication, Prater had sought decisions on several matters, including (a) the correct Subcontract Completion Date, (b) the status of provisional sums within the Subcontract, and (c) Sisk’s entitlement to deduct certain indirect losses from sums due to Prater. In the Fourth Adjudication, Prater had sought payment following Decisions 1-3. Decision 4 was based in part on the findings made in Decision
2. The Adjudicator decided that Sisk was liable to pay Prater £1.7m and pay the Adjudicator’s fees in full. However, Sisk paid the Adjudicator’s fees only. Accordingly, Prater applied for the enforcement of Decision 4. For this Application, the parties were principally in a dispute about the proper effect of Decision 2 and its impact on the enforceability of Decision 4.
Sisk argued that the Adjudicator had no jurisdiction to reach the decision they did in Adjudication 2 because Prater’s referral included multiple disputes (rather than a single dispute). As a result, Sisk argued that Decision 2 was unenforceable, not binding and a nullity. Therefore, it was argued that the Adjudicator did not, in turn, have jurisdiction to reach the decision they did in Adjudication 4 (which was partly based on the findings in Adjudication 2). Consequently, Sisk argued that Decision 4 should not be enforced.
Prater argued that Sisk could not challenge Decision 2 in the context of Adjudication 4. It was argued that the decision was binding and enforceable unless and until revised by the Court according to the Subcontract. It was also argued that any challenge to Decision 4 would need to be based on lack of jurisdiction, fraud or breach of natural justice with Adjudication 4. In any event, it was wrong to characterise Adjudication 2 as containing multiple disputes when it actually related to Sisk’s assessment of Prater’s account and a payment certificate issued in January 2020. The Referral simply included several issues arising out of the disputed certificate.
The Court granted summary judgment for the Claimant. Sisk had noticed dissatisfaction concerning Decision 2 but had not taken any further steps to refer it to Court. Accordingly, according to the dispute resolution provisions in the Subcontract, Decision 2 remained binding (reflecting the usual position under section 108(3) of the Housing Grants, Construction and Regeneration Act 1996) unless and until that decision was successfully challenged before a Court or Tribunal (as appropriate).
There was no authority to support the proposition that a lack of jurisdiction concerning an earlier adjudication was a recognised ground for challenging an adjudicator’s jurisdiction in a subsequent adjudication that relied on the findings of the challenged adjudication before any such challenge made good. Concerning whether multiple disputes had been referred in Adjudication 2, the Court concluded that the real dispute between parties was to Sisk’s assessment of Prater’s account. All the matters raised in Adjudication 2 were issues going to the determination of that single dispute.
This case demonstrates that where parties have engaged in several related adjudications, and a later adjudicator decides based upon a previous adjudicator’s decision, a party cannot challenge the later adjudicator’s jurisdiction by alleging that the previous adjudicator lacked jurisdiction. Instead, the parties are bound to comply with the previous adjudicator’s decision unless and until the previous adjudicator’s decision has itself been challenged in Court. Thus, if a party wants to challenge an adjudication decision, it seems that it is necessary to challenge that decision directly rather than collaterally via a challenge to a later decision.