firm news

Rowan Turrall
Rowan Turrall,
Adjudication - failure to raise jurisdictional challenges during adjudication
14 April 2015

The recent case of CSK Electrical Contractors Ltd v Kingwood Electrical Services Ltd [2015] contains a useful reminder of some basic principles for challenging the enforcement of an adjudicator's decision (or what not to do in this case).

The defendant, Kingwood, engaged the claimant CSK to carry out electrical works at the West Stand and in the executive boxes at Twickenham. CSK obtained two adjudicator's decisions, one in the sum of £60,161.40 and the second in the sum of £272.078.03, and sought to enforce them by way of summary judgment. Kingwood challenged the enforcement on the basis that there had been a breach of natural justice and/or that the adjudicator lacked jurisdiction. Its grounds for challenge were:

  • That no dispute had crystallised before the reference to adjudication
  • That the adjudicator's appointment was invalid
  • That the timetable was too onerous and therefore unfair
  • That there should at any rate be a stay of execution

On the first point, the judge highlighted that the crystallisation argument is almost never successful. For crystallisation to occur, he stated the general view that service of a claim by the claiming party followed by subsequent inactivity for a further short period from the responding party may be enough. Here the claimant's representative had written to the defendant pointing out that no pay less notice had been issued and that if the outstanding monies were not paid immediately, a reference to adjudication would be made. The defendant responded to say the claims were "unfounded and will be strenuously defended". The judge decided that was enough for a dispute to have crystallised. The invoices had not been paid in accordance with the contract, a pay less notice had not been served in time and the defendant had expressly said the claims were disputed and would be defended.

The second point sought to rely on the decision of Eurocom Ltd v Siemens Plc (see our previous. In the present case the nomination had been made by CEDR, and the claimant's representatives had included in its application the sentence "It is preferred that any of the adjudicators in the attached list are not appointed". Crucially (in contrast to Eurocom) there was no list attached. The judge therefore found that the situation was entirely different to that in Eurocom in which the judge found that there had been a false statement to the nominating body. The judge therefore also dismissed the defendant's second ground of challenge.

The third point was that the timetable was too quick. Again the judge highlighted that this point had been taken in a number of authorities but to his knowledge had never been upheld - the adjudication process is intended to be a rough and ready process and sometimes adjudications will take place over the Christmas/New Year period. He noted that in this case the defendant could have asked the adjudicator for further time but did not do so. The judge therefore felt that the defendant made the point after the event in an effort to avoid payment rather than because it was of great concern at the time.

Lastly, the judge highlighted that the defendant had not raised any jurisdictional objections during the course of either of the adjudications and therefore it had waived its rights to do so. He referred to the authorities which make clear that if a party wants to make a jurisdictional objection then it must be expressly stated at the outset of the adjudication. In relation to the onerous timescale point he repeated that the complaint had not been raised during the adjudication. After the adjudication, the defendant had also acted in a clear and unequivocal way to show that the alleged breach had been waived in that it had paid the adjudicator's fees and sought corrections to the adjudicator's decisions under the slip rule.

The judge therefore rejected the defendant's grounds and allowed enforcement of the decisions by way of summary judgment.

The principles set out in the case are not new but serve as a reminder of some basic points when responding to an adjudication. If you want to raise jurisdictional objections, raise them at the outset and make sure your subsequent acts are consistent with those objections. If subsequent issues arise that may give rise to a breach of the rules of natural justice (such as issues with the timescale) then say so. If you need an extension of time to respond then ask for it. In short, do not participate in an adjudication without making any objections and then wait until enforcement to try to challenge the decision - you will do so at your peril.

For more information about the issues in this article or to find out more about how the Construction team can help you please contact Rowan Turrall on 0118 952 7206 or email [email protected].

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

award winning law firm

Boyes Turner are proud to have received the following awards and recognition.