Justin Mendelle, partner and head of construction, looks at how a recent case highlights the difficulties of overturning an adjudicator’s decision.

 

Background

Vital was the main contractor to Fife Council and it entered into a subcontract with Bouygues for a combined heat, power and community energy system.  Vital terminated the subcontract, citing poor workmanship and delays. The matter went to adjudication where it was determined that Vital had been entitled to terminate the contract.

At a second adjudication, Vital sought to recover monies representing the cost of completing the works under the contract. The second adjudicator ordered Bouygues to pay Vital just over £1.6 million for the costs of completing the subcontract. Bouygues did not pay and Vital began enforcement proceedings, where Bouygues challenged the adjudicator’s decision.

Case discussion

Bouygues challenged the decision on three broad grounds:

Fundamental error

Bouygues submitted that in interpreting the contract, the adjudicator committed a “fundamental error”, which prevented him from addressing whether or not Bouygues’ works were defective.

The judge concluded that this did not amount to a “fundamental error” and reminded the parties that it was not the job of the court to investigate the merits of the contract, as that would undermine the entire purpose of the adjudication regime.

Assessor’s advice

Bouygues argued that the decision was wrong because the adjudicator
accepted the advice of an independent assessor. The adjudicator gave the assessor 10 per cent of the invoices to assess on the basis that they related to works carried out for the completion or rectification of the subcontract works. This formed the basis of the award payment of around £1.6 million to Vital.

The judge confirmed that the adjudicator had been entitled to act in this way, as this was not a case of an unauthorised inspection and it was not unusual for courts to undertake sampling of this type.

Reliance upon adjudicator’s own experience

Bouygues submitted that they should have been given an opportunity to comment on the adjudicator’s intention to rely upon his own experience.

The judge dismissed this and stated that it was perfectly common for adjudicators to do so and that this was not a case of an adjudicator adding to the evidence.

Implications

This case once again highlights the difficulties of overturning an adjudicator’s decision, especially where the court is being asked to assess the merits of the adjudicator’s decision.

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published.