UK: Adjudicator has jurisdiction despite concurrent referrals and late service of referral notice

The UK High Court has ruled that an adjudicator had jurisdiction to make two decisions despite the fact that the responding party (Newlon) did not receive the referrals when they were served on the adjudicator. The court also rejected Newlon's argument that the adjudicator could not be referred two disputes concurrently pursuant to section 108(1) of the Construction Act 1996: Wilmott Dixon v Newlon [2013] EWHC 798 TCC 9 April 2013

 Background

The case concerned a PPC2000 contract and the CIC adjudication procedure, which is rare.

Having served two notices of intention to refer to adjudication on 9 October 2012, Wilmott sent two letters addressing the two issues to the adjudicator enclosing the referral notice with a bundle of copy documents (October Referral Notice).  These were said to be sent to Newlon's solicitors at the same time.  The adjudicator confirmed receipt of the referral three days later.  Newlon submitted a response referring to a referral notice in a previous (July 2012) adjudication but not those material to the present adjudication.  Wilmott queried this and served a reply enclosing a further copy of the referral in the October adjudication to which Newlon served a rejoinder raising no new substantial points.  The adjudicator originally said that he had not received the October Referral Notice but subsequently confirmed in writing and in his decision that he had received it but had not noticed these at the time as they had become unattached from the main file.  Subsequently he made two decisions in Wilmott's favour which Wilmott sought to enforce.

 Enforcement proceedings

Newlon submitted that the adjudicator had no jurisdiction to reach his decision as the referral notice had not been served within seven days of the giving of the notice of intention to refer.  This was a breach of the requirements of Section 108(2)(3) of the Construction Act and Rule 14 of the applicable CIC Rules.  Both require the dispute to be referred to the adjudicator within seven days of the notice of intention to refer. 

The court rejected this argument.  The reality of the situation was that the adjudicator did receive the October Referral Notice at the correct time, as he made plain in his later letter.  This point was incorporated within his decision and this was a finding or statement of fact within his jurisdiction which was not open to challenge on the application for enforcement.  Even if he had not received the referral documents at the required time, the covering letter and the enclosed bundle sufficiently set out a statement of Wilmott's case in relation to each adjudication, to which Newlon responded in detail. In the court's view, Newlon should have raised the issue at the time of its response and by not doing so, was in breach of contract itself.   

Ramsey J went on to observe that even if it were correct that Newlon had not received the referral notice at the proper time, this was not sufficient to displace the adjudicator's jurisdiction.  At most, this might go to the question of whether or not the procedure complied with natural justice.  In doing so, the court adopted a wide meaning for "statement of case" (the CIC adjudication procedure did not prescribe the form this should take). In construing this, the court included the points raised in Wilmott's detailed cover letter.

The court also refused the defendant's submission that two adjudications could not be referred to one adjudicator.  The authorities on this point, particularly the case of Witney v Beam Construction [2011] made it clear that two disputes cannot be referred in one adjudication but there is nothing wrong with two disputes being referred to the same adjudicator in two adjudications.

The award was therefore ordered to be enforced. 

Comment

Although the combination of the contract and rules applicable in this case is unusual, it does indicate, as in many previous cases, that technical arguments on enforcement are unlikely to be given much credence.  The judgment suggests a certain degree of latitude in the service requirements. It is unclear why Newlon did not raise the issue on receipt, and instead chose to refer to an earlier referral notice yet respond to the substantive claims raised in Wilmott's cover letter. This seemed to influence Ramsey J's findings. Ramsey J found that this was out with the spirit of the CIC adjudication procedure, which required the parties to work together to solve problems and resolve disputes. The decision may appear surprising but it is against this backdrop, and the fact that technical breaches should not be taken to avoid adjudicators' decisions, that it must be interpreted.