Revisiting the scope of the dispute
Back in the day, when adjudication enforcement cases were first coming before the courts, and practitioners and Judges were regularly grappling with issues which were new, in the legal sense of being without precedent or guidance, one of the major areas of contention, was what actually constituted the dispute in question. Mr Justice Jackson memorably referred to there being a “rapidly growing jungle of decisions on this subject”.
Indeed, the issue became such a standard feature of adjudication, that Mr Justice Coulson commented in the 2015 case of St Austell Printing Company Ltd v Dawnus Construction Holdings Ltd that the defence raised in enforcement proceedings that the dispute in question had not crystallised was a ‘‘well-worn suggestion.” In other words, the Judge was sounding a warning that a party wanting to raise this issue must have a sound basis for so doing. Of course, in addition to that, the party raising that suggestion must still make an adequate reservation of their position on jurisdiction. In, AMD Environmental Ltd v Cumberland Construction Company Ltd, the adjudicator had ruled that there was a crystallised dispute, but Cumberland subsequently engaged in correspondence without reserving their right to make a challenge on enforcement. In other words they gave the impression that they had accepted the ruling of the adjudicator.
At least initially, there had been a line of cases which at one level appeared to circumvent the statutory entitlement to refer disputes to adjudication “at any time” by holding that there is no dispute until after some time has passed, or for as long as the ball is in the air. One reason for this may have been an understandable desire to restrict the perceived risk of ambush. In Fastrack v MorrisonJudge Thornton said:
“A ‘dispute’ can only arise once the subject-matter of the claim, issue or other matter has been brought to the attention of the opposing party and that party has had an opportunity of considering and admitting, modifying or rejecting the claim or assertion.”
Of course, the courts ultimately rejected this approach and with theCourt of Appeal in Collins v Baltic Quayaccepting as “broadly correct” the now well-known seven propositions of Mr Justice Jackson in Amec v Secretary of State for Transportat first instance.
In short the courts said that the term “dispute” should be given its normal every-day meaning. This is also the approach of FIDIC. The 2017 Second Edition of the Rainbow Suite was at pains to distinguish between the making of a claim, i.e. putting forward a request for an entitlement or relief in accordance with the contract, and the concept of dispute. According to FIDIC a dispute arises when a Party rejects the claim which is straightforward. However, in addition, and in line with the approach of the courts in the UK, the failure to oppose or respond to a claim, may in itself constitute a rejection of the claim.
The courts adopted the same approach to the meaning of dispute, as can be found in arbitration. Mr Justice Akenhead confirmed that:
“there is no good reason in principle to differentiate in law or in fact as to a dispute or difference in adjudication as opposed to in arbitration. Both involve dispute resolution processes which are triggered by the existence of a dispute (and sometimes a difference) which is referable to that process”.
So it was interesting to see the legal world come full circle with the decision in the case of Bond v Mackay & Orswith an adjudication enforcement case, being used in a decision about the terms of the dispute that had actually been referred to arbitration. More interesting was that one of the cases used was the decision of HHJ Seymour QC in Edmund Nuttall v RG Carter, where the Judge had said that:
“for there to be a ’dispute’ there must have been an opportunity for the protagonists each to consider the position adopted by the other and to formulate arguments of a reasoned kind”.
In other words this was just the type of comment that had been over-ruled by the decision in the Collins and Ameccases.
Here, Bond had brought an application under section 67 of the 1996 Arbitration Act for a decision that an order by an arbitrator be varied so that the scope of the arbitration included whether or not the Third Defendant was in breach of a deed pursuant to clause 2(i). The issue essentially turned on the nature of the dispute between the parties. There was no specific reference to the clause in question in the arbitration referral, but that did not matter according to Bond because the dispute was about an entitlement to compensation and that included rights under clause 2(i).
Mr Jonathan Acton Davis QC and counsel for both parties specifically referred to the Nuttall case where HHJ Seymour QC had said:
“what constitutes a dispute between the parties is not only a claim which has been rejected, if that is what the dispute is about, but the whole package of arguments advanced and facts relied upon by each side.”
The Third Defendant argued that given there was no reference to a dispute under clause 2 of the Deed in any of the correspondence; it must therefore follow that any dispute under clause 2(i) could not have been referred to arbitration. Further, no reference had been made in the Statement of Case to clause 2(i). Therefore, there could not have been any dispute under clause 2(i) when matters had been referred to arbitration. Bond said the court must look at the “big picture”. The dispute concerned the liability to pay compensation: that is a claim for compensation under all the relevant clauses of the contract, including clause 2(i).
The Judge agreed; taking a broad view of the factual matrix, the dispute under clause 2(i) did fall within the substantive jurisdiction of the Arbitrator. In the circumstances of this case, the Court was required to:
“take a broad view of the factual matrix as shown...in the correspondence leading up to the appointment of the Arbitrator and his acceptance of the appointment. This is not a case where there were Terms of Reference as required in a number of the Rules which govern international arbitrations.”
Whilst the Statement of Case only specifically referred to two other clauses, it was plain from the document that this must include a claim for compensation:
“If the claim is part of the matrix, as it was, the scope of the Reference to Arbitration cannot be reduced by the pleadings.”
So maybe nothing new here: but a helpful reminder of the approach the courts will take, in both arbitration and adjudication, to the meaning of dispute. They will look at the “bigger picture” and not adopt a narrow, technical, or even worse legalistic, meaning.
Amec v Secretary of State for Transport  EWHC 2339
 EWHC 96 (TCC)
 EWHC 285 (TCC).
 B.L.R. 168. See also, by way of example, Sindall v Solland (2001) 80 Con. L.R. 152.
 EWCA Civ 1757
 EWHC 2339 (TCC)
Ringway Infrastructure Services Ltd v Vauxhall Motors Ltd  EWHC 2421 (TCC)
 EWHC 2475 (TCC)
 B.L.R. 312