Maymac Environmental Services v Faraday [2001] 75 Con LRHT 00/222

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Any points to be made about whether the adjudicator has jurisdiction to act should be made during the adjudication itself, otherwise the parties are likely to be found to have consented to the adjudication process and will be estopped from arguing the adjudicator had no jurisdiction in any enforcement proceedings.

HHJ Toulmin QC, Technology and Construction Court

16 October 2000

M was a mechanical and electrical sub-contractor to F and applied for payment for works done. M only received part of the payment and so referred the payment dispute to adjudication under HGCRA 1996 and the Scheme. The adjudicator awarded the sum claimed by M plus interest. F refused to pay. M applied for summary judgement to enforce the adjudicator's decision in its favour.

F claimed that the adjudicator had no jurisdiction to make the award as no construction contract had ever come into existence. F submitted that, although there was a purchase order that may have appeared to show a concluded contract, a letter which was not put before the adjudicator showed there was no concluded contract between the parties. F claimed that the parties proceeded on the basis of a shared mistake, that is, they thought they had a contract when in fact they did not. F also claimed that the adjudication ought to be set aside if the terms of the contract turned out to be different from the contract put before the adjudicator.

M argued that there was a construction contract and, further, that F agreed to take part in the adjudication and was therefore bound by it.

On the evidence before him, the judge found that the letter that F relied on as showing there was no construction contract did not in fact show that there was no concluded contract or that it was different from the one on which the adjudicator based his decision. There was overwhelming evidence that the parties had reached agreement on the terms by which they agreed to be bound and so there was a concluded contract. In addition, F had consented to the adjudication and, during it, had admitted that a contract existed to which the Act and the Scheme applied. F could not resile from that. F was estopped by representation and convention from arguing that the Act and the Scheme did not apply. Even if no contract existed and the referral was not under the Act, the adjudication took place by agreement between the parties on the same terms as the Act and the Scheme. M's application for summary judgment was therefore granted.

Any points to be made about whether the adjudicator has jurisdiction to act should be made during the adjudication itself, otherwise the parties are likely to be found to have consented to the adjudication process and will be estopped from arguing the adjudicator had no jurisdiction in any enforcement proceedings.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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