Lanes Group v Galliford Try [2011] EWHC 1035 (TCC)

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(1) Where a contract is terminated or brought to an end by the acceptance of a repudiatory breach, an adjudication clause in the contract will survive. (2) Where a contract is a “construction contract” within the meaning of the Housing Grants, Construction and Regeneration Act 1996 (“the HGCRA”), the adjudication agreement in the contract cannot be repudiated as such. (3) Where, therefore, a party who had commenced an adjudication considered that the adjudicator appointed by the appointing body suffered from apparent bias, the Court would not, on the basis of arguments as to repudiation of the adjudication agreement, restrain that party from deciding not to serve the referral documentation in that adjudication and commencing a new adjudication of the same dispute with a different person appointed as adjudicator.     

Technology and Construction Court, Akenhead J


The claimant sub-contractor (“Lanes”) was employed by the defendant main contractor (“GTI”) to carry out certain roofing and glazing works relating to the refurbishment of a train maintenance depot.  The Sub-Contract between the parties incorporated the CECA Form of Sub-Contract (July 1998, February 2008 amendment) which provided for adjudication under the ICE Adjudication Procedure 1997.  This Procedure required the referring party to serve a full statement of his case within two days of the appointment of the adjudicator. 

The parties fell out and the Sub-Contract was terminated with each party blaming the other.  Subsequently, GTI served a Notice of Adjudication on Lanes seeking a declaration that it had lawfully determined Lanes’ employment, or alternatively that Lanes had repudiated the Sub-Contract, and claiming over £2.7 million.  GTI applied to the ICE, who appointed an adjudicator.  However, GTI objected to the ICE’s appointee, on the basis that GTI’s solicitor had conducted a series of acrimonious adjudications involving other parties fourteen months previously in which the adjudicator now appointed by the ICE had acted for the other side.  GTI contended that this history made it difficult for the ICE’s appointed adjudicator to be seen to be impartial and accordingly informed the ICE that GTI would not be proceeding with the adjudication notice in respect of which the ICE had made its appointment.  Lanes’ response was that GTI’s decision not to proceed was a repudiatory breach of the adjudication agreement in the Sub-Contract, which Lanes accepted, and that Lanes would therefore resist “any application by GTI to serve fresh adjudication proceedings on the claims which are the subject of the current Notice of Adjudication”.  GTI nonetheless served a fresh Notice of Adjudication and asked the ICE to nominate a fresh adjudicator, which the ICE did.  Lanes then issued proceedings seeking an injunction from the court preventing GTI from continuing or making further applications to adjudicate the same dispute. 

It was common ground between the parties that the service of the full statement of case within the period required by the ICE Adjudication Procedure was mandatory, from which it would follow that a materially late service of the statement of case would mean that the adjudicator had no jurisdiction to proceed.


The Court was asked to address the following issues:

  • Whether an adjudication clause survives termination of the contract.
  • Whether an adjudication agreement can be repudiated either in whole or in relation to a particular dispute.
  • If so, whether GTI had committed a repudiatory breach of the adjudication agreement in this case.
  • Whether there was apparent bias on the part of the adjudicator originally appointed by the ICE.


The Court held:

  • An adjudication clause, like an arbitration clause, survives termination of a contract or an accepted repudiatory breach of contract.  This approach applied even more emphatically to adjudication, as the HGCRA entitles a party to refer a dispute arising under the contract to adjudication at any time.
  • An arbitration agreement can be repudiated by one party evincing an intention no longer to be bound by the arbitration agreement.  There is no reason in principle why a solely contractual adjudication clause in a contract between the parties should not be subject to the same approach as in arbitration. 
  • However, where the contract concerned is a “construction contract” within the meaning of the HGCRA, the adjudication agreement in the contract cannot be repudiated as such because the HGCRA requires in an unqualified way that a party to such contract “has the right” to refer a dispute to adjudication “at any time”.
  • There was no legal basis for arguing in this case that the adjudication agreement could be repudiated only in relation to the particular dispute concerned.  Where the parties agree on an ad hoc basis to refer a particular dispute to adjudication, such an agreement may be capable of being repudiated.  There was as such no ad hoc agreement in this case and, in the absence of clear wording in the Sub-Contract adjudication clause, there was no room to construe an overall adjudication agreement as if it comprised separate agreements for each and every dispute which is referred to adjudication.
  • In the light of the above findings, it was not necessary for the Court to decide whether there was repudiatory conduct on the part of GTI in deciding not to proceed with the first adjudication notice.  However, the Court doubted whether there was apparent bias on the part of the first adjudicator appointed by the ICE.  In particular, the Court did not see that a heated “spat” between parties' representatives fourteen months earlier would or would necessarily give rise to apparent bias.  However, it was clear that GTI’s solicitor had an honest, although mistaken, belief that there might be apparent bias and it would therefore be difficult in those circumstances to find that the breach of contract on the part of GTI in not serving its statement of case within time was such as to be repudiatory.
  • There is at the very least a lacuna in the HGCRA and in many standard form adjudication agreements which would allow a referring party, time and again, if it did not "like" the adjudicator nominated, to withhold service of the referral documentation so that the adjudication lapses, thus enabling it to seek a nomination which it does "like".  There is a respectable argument, albeit not deployed in this case, that one can only refer a given dispute once to adjudication, provided that there is no valid ground for challenging either the adjudicator's impartiality or jurisdiction or that, on some valid ground or another, the decision produced by the adjudicator on the dispute is not enforceable.  The Court did not express any concluded view on this because it had not heard detailed argument on it.  However, the Court indicated that it did not rule out the possibility that that argument could be deployed to the effect that the Court could by injunction restrain a party, albeit with appropriate safeguards, from pursuing the same relief for the same dispute, time and again, in adjudication.
  • Accordingly, Lanes’ case failed, and GTI would not be restrained from proceeding with its second reference to adjudication.

This summary was provided by CMS Cameron McKenna LLP.

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