There are several grounds on which companies commonly challenge the jurisdiction of an adjudicator. A recent case between Willmott Dixon Housing and Newlon Housing Trust highlights the problems over jurisdiction when there is more than one dispute.
- Common jurisdictional objections
- When there is more than one dispute
- Two disputes, two decisions, one adjudicator
- Section 108 or the Scheme for Construction Contracts?
In construction disputes, the jurisdiction of the adjudicator is often challenged.
Jurisdiction is of vital importance to the parties of an adjudication: if the adjudicator has no jurisdiction to determine the dispute, their decision will be invalid and unenforceable.
Responding parties should raise jurisdictional issues at the earliest opportunity, otherwise the right to raise jurisdictional challenges during any enforcement proceedings may be lost.
Common jurisdictional objections
Common jurisdictional objections that arise in practice include “the dispute has not crystallised”, “there is no contract”, “the contract is not a ‘construction’ contract”, or “there is more than one dispute”.
However, responding parties should think carefully before raising unmerited jurisdictional challenges, as they are unlikely to win favour with the adjudicator and unnecessary costs may be incurred where the parties prepare submissions on the issue of jurisdiction.
When there is more than one dispute
In the recent Willmott Dixon Housing v Newlon Housing Trust case, a jurisdictional challenge was raised in relation to the fourth objection set out above.
Willmott Dixon Housing was the claimant, Newlon Housing Trust the defendant. Willmott Dixon was employed by Newlon for part of a development known as Hale Village in Tottenham Hale, London.
“Responding parties should think carefully before raising unmerited jurisdictional challenges”
Willmott Dixon initially instigated adjudication proceedings regarding a dispute that had arisen as to the sums it was entitled to be paid for basement works.
On the same day, Willmott Dixon began further adjudication proceedings as to its entitlement to sums in respect of liquidated damages, which were being withheld by Newlon.
Willmott Dixon made separate applications to the CIC (the adjudicating body) and paid separate fees in relation to the appointment of an adjudicator for each dispute. The CIC appointed the same adjudicator.
Two disputes, two decisions, one adjudicator
The adjudicator made a decision in each of the two disputes referred and held that Newlon should pay the sum of £115,697.42 in one dispute and £130,019.69 in the other.
These sums were not paid by Newlon and Willmott Dixon issued a claim in the Technology and Construction Court, applying for enforcement of adjudication decisions.
However, Newlon argued that the adjudicator did not have jurisdiction because the two disputes had been referred to adjudication and were to be adjudicated by the same adjudicator.
Mr Justice Ramsey considered whether there was an underlying policy that could prevent an adjudicator from having jurisdiction because of multiple adjudications being referred to the same adjudicator by the same parties under the same contract.
Newlon’s argument centred around the wording in section 108 of the Housing Grants, Construction and Regeneration Act 1996 and the CIC Rules, which refers to “dispute” in the singular and not “disputes” in the plural.
Section 108 or the Scheme for Construction Contracts?
Ramsey acknowledged that, in practice, parties may be overburdened by multiple adjudications for the same contract as section108 provides for adjudication “at any time”.
“Willmott Dixon successfully argued that there is nothing in the CIC Rules or section 108 to prevent a party giving more than one notice of adjudication”
Willmott Dixon successfully argued that there is nothing in the CIC Rules or section 108 to prevent a party from giving more than one notice of adjudication, each relating to one dispute and for each of those adjudications to then be referred to the same adjudicator.
Justice Ramsey was keen to draw a distinction between section 108 and the Scheme for Construction Contracts.
The scheme sets out the adjudication procedure in detail and only applies if the parties have not set out a proper adjudication procedure in their contract.
However, unlike section 108, the scheme requires consent for a party to refer more than one dispute in a single adjudication to the same adjudicator.
This case should remind parties of the key points to keep in mind when faced with an adjudication:
- Always consider whether the adjudicator has jurisdiction;
- Check whether section108 or the scheme applies;
- Challenge jurisdiction early on in the process or risk losing the right to object on the grounds of jurisdiction;
- But be wary of unmerited jurisdictional challenges.
Colleen Galbraith is an associate in the construction team at international law firm Taylor Wessing