Multiple disputes in adjudication

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Multiple disputes in adjudication

June, 2013
Adam Temple

It has generally been accepted that only one dispute can be referred to adjudication. Although the court has generally been amenable to finding that multiple disputes have not been referred, there have been cases where a challenge on this basis has succeeded.

The extent to which that approach is correct has been opened up by the recent decision of Mr Justice Ramsey in Willmott Dixon v Newlon [2013] EWHC 798 (TCC). However, less than a month later, Mr Justice Akenhead put forward a contrary view in TSG v South Anglia [2013] EWHC 1151 (TCC).

The Willmott Dixon case also raised interesting points as to whether a failure to serve a full Referral within 7 days will deprive the adjudicator of jurisdiction.

Two disputes: two adjudications
Willmot Dixon was a contractor employed by Newlon pursuant to the ACA Standard Form of Contract for Project Partnering. On 9 October 2012, Willmot Dixon served two notices of intention to refer issues to adjudication (one relating to sums due for basement works, and another in relation to a claim for LADs). At the same time, Willmot Dixon applied to the CIC for the appointment of adjudicators. The CIC appointed the same adjudicator in respect of both adjudications, and from that point onwards the two adjudications proceeded in parallel.

Failure to refer?
On 11 October 2012, Willmot Dixon sent its documentation to the adjudicator and to Newlon. There was a question as to whether the bundle supplied included Willmot Dixon’s Referrals. The adjudicator initially suggested he had not received such documents, but later said that he had found them (they had become unattached from the file). In any event, Newlon provided a Response to the documentation received, suggesting that there had been no valid Referral. Willmot Dixon provided a copy of the Referrals with its Replies, and Newlon was given the opportunity to serve Rejoinders. In those Rejoinders, Newlon addressed the contents of the Referral.

Enforcement proceedings
The adjudicator found in Willmot Dixon’s favour on both adjudications, and Newlon sought to enforce the decisions.

Newlon’s first argument in resisting enforcement was that there had been no valid Referral within 7 days, and that the adjudicator therefore did not have jurisdiction. Ramsey J dismissed this on a number of grounds. Firstly, there was no real doubt that the adjudicator had received the Referral. Accordingly, he had jurisdiction. Any failure to serve the same documents on Newlon would not have removed that jurisdiction. This kind of issue might give rise to natural justice questions, but not where Newlon had later received, and had an opportunity to respond to, the Referrals.

Secondly, Ramsey J concluded that the bundles of documentation and covering letters would have sufficed as a Referral in any event.

Thirdly, he commented that Newlon should have contacted Willmot Dixon regarding the absent Referral and it could not rely on its failure to do so in resisting enforcement.

Newlon also argued that Willmot Dixon had referred multiple disputes, contrary to section 108 of the Construction Act.

Perhaps unsurprisingly, this argument did not find favour with the judge, where two separate adjudications had taken place, albeit with the same adjudicator and the same timetables. He described Newlon’s submissions as ‘argued with commendable ingenuity’, but quickly dismissed them. Of greater interest were Ramsey J’s comments on section 108 of the Construction Act. He opined (obiter):

“an argument based on the reference in s.108(1) to ‘a dispute’ being ‘one dispute’ may not be correct and that the reference to ‘a dispute’ is more likely to be a generic reference to ‘a dispute’, without seeking to limit it to a singular dispute.”

He concluded that those cases that did suggest that only one dispute could be referred were conducted under the Scheme for Construction Contracts (which has provisions allowing multiple disputes only if the parties consent to the same).

If Ramsey J’s judgment opened the door on referring multiple disputes, Akenhead J did his best to close that door less than a month later. In the case of TSG v South Anglia [2013] EWHC 1151 (TCC) he said:

“I do not intend to add, obiter, to a debate on this topic which was only addressed by Mr Justice Ramsey himself on an obiter basis. I would say only that, absent specific agreement either in the original contract or on an ad hoc basis, authorities are sufficiently well established now to suggest that only one dispute can be referred to adjudication, albeit that the courts adopt a sensible and commercial approach in determining the relative width of any given dispute.”

However, as with earlier cases, Akenhead J in TSG v South Anglia was willing to find that a single dispute existed notwithstanding the presence of three discrete sub-issues.

It is not entirely clear what the logic behind prohibiting multiple disputes might be: very large disputes can be, and often are, referred to adjudication. They may involve any number of issues, which the parties and the adjudicator have to do their best to grapple with. Equally, as in Wilmott Dixon, multiple separate disputes may be referred on the same day and be determined by the same adjudicator. Furthermore, disputes must derive from a single contract (as section 108 refers to ‘the contract’) and given that it is necessary to show that disputes have crystallised, the logic behind the prohibition should not be said to derive from the need to avoid ambush.

In the writer’s view, the removal of a general prohibition on referring multiple disputes would remove the need to distinguish between multiple claims within a single dispute, and multiple disputes. The borderline between these two analyses can be unclear. In truth, however, the courts already seem to have found a way to reach the same end; by adopting a flexible and non-literal approach a dispute with sub-issues will rarely be defined as multiple disputes as made clear by Mr Justice Akenhead in Witney Town Council v Beam Construction (Cheltenham) Limited [2011] EWHC 2332 (TCC).

The obiter comments made in these two most recent cases appear to be something of a red herring – and arguing that multiple disputes have been referred to an adjudicator, save in a very clear case, often remains futile.

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