Technical challenges to adjudicator’s jurisdiction and design

AECOM Design Build Limited v Staptina Engineering Services Limited. [2017] BLR, 329 TCC Fraser J

Facts

AECOM had the main contract for works at the Long Reach sewerage treatment works in London.  Staptina were the mechanical subcontractor.  AECOM purported to terminate the contract, and a very complex dispute ensued.  Staptina issued a notice of adjudication challenging AECOM’s deductions from its payments.  AECOM defended by reference to Staptina’s alleged breaches of duty. AECOM challenged the Decision under CPR Part 8.

TCC Held

1. AECOM’s challenge, on the basis that the Notice of Adjudication did not cover all the issues expressed in the Notice of Referral, was ineffective. The dispute referred would be read broadly by reference not only to the Notice of Adjudication but to pre-adjudication correspondence, the pleadings in the adjudication, and the evidence submitted.
2. Even if the Notice of Adjudication had not conferred jurisdiction in certain aspects, the ambit of the Reference had been widened by the nature of the defences advanced by the Responding Party. The attempt to challenge adjudication therefore failed.
3. AECOM claimed breach of natural justice, on the basis that the adjudicator had come to a conclusion which did not represent the case of either the Claimant or the Respondent. This was also rejected.

Comment

1. As regards the breach of natural justice, the Judge observed that the parties were aware of all the relevant documents and had made submissions about them. The issues were fully canvassed, and AECOM had made submissions on all of them: “The Adjudicator was not bound to accept one of the two alternatives put forward by the parties; she was entitled to reach a different conclusion based on the material put before her.  Having reached a different conclusion, she was not required to consult the parties on her draft findings (given the very tight timescales).”
2. The losing party to an adjudication often tries to avoid payment by reference either to jurisdiction or to procedural/natural justice issues.  This case demonstrates that 19 years after the birth of statutory adjudication, the TCC is still strongly supporting this rough and ready process as a matter of policy.

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