Wales and West Utilities Ltd v PPS Pipeline Systems GmbH (2014) EWHC 54 (TCC) (Jurisdiction of Adjudicator)
Facts
A dispute (option W2) arose between the parties as to whether an early warning identifying the existence of adverse ground conditions (rock) gave rise to a valid compensation event.
The parties had agreed to exclude clause 60.1(12) from the contract.
In the adjudication PPS argued that the project manager should have issued an instruction changing the works information and their failure to do so constituted an inaction of the project manager and hence a dispute under the contract.
Wales disagreed and challenged the jurisdiction of the adjudicator.
The adjudicator found in favour of PPS.
Judgment
The courts have sought to discourage losing parties in adjudications from “scrabbling around to find some argument, however tenuous”.
When the jurisdiction of a person appointed to make a decision under a contract, such as an adjudicator, was called into question, it was always necessary to ascertain with precision what the decision maker was authorised to do.
A vital and necessary question, when a jurisdictional challenge was mounted, was to ask what had actually been referred. That required a careful characterisation of the dispute. To determine the scope and ambit of any given dispute, the court needed to analyse the relevant exchanges between the parties. It was open to a party which wished to proceed to adjudication to refer only part of the crystallised dispute.
Primarily, one had to construe the notice of adjudication to determine the extent to which all or part of the crystallised dispute was being referred to adjudication. It was open to the defending party to adjudication to run any factual or legal defence to the disputed claim.
However, none of the post-notice of adjudication documentation generated in an adjudication would alter the scope or ambit of the dispute referred, save by agreement or by operation of waiver or estoppel.
Decisions of adjudicators were binding and were to be complied with until the dispute was finally resolved.
MDA Law
