Karl Construction Ltd v Sweeney Civil Eng. Ltd [2002] SLT 312P/872/00

This summary was provided by CMS Cameron McKenna LLP.

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

The adjudicator is not fettered, when applying the relevant law, by the parties' representations: it is open to the adjudicator to reach a conclusion different from that agreed by the parties. A failure by the adjudicator to seek further representations from the parties before reaching a conclusion different from their agreed position is not necessarily a breach of the rules of natural justice.

Extra Division, Inner House, Court of Session

Lord Marnoch, Lord Dawson, Lord Clarke

22 January 2002

The petitioners (K) brought a reclaiming motion against the dismissal by the Lord Ordinary of a petition for judicial review of an adjudicator's decision under the HGCR Act 1996. The facts of the case and decision by the Lord Ordinary are set out on page 51. After that decision had been given, the respondents (S) had gone into liquidation and did not appear at the appeal hearing.

K made a similar argument to that raised by it before the Lord Ordinary – that is, that both parties accepted there was no incompatibility of the contract provisions with the requirements of section 110 of the Act and it was therefore not open to the adjudicator to reach a different conclusion.

The Court disagreed. It was clear from the referral documents that the dispute referred included issues of the compatibility of the contract documents with the Act and this was sufficient; the fact that the parties may subsequently have accepted there was no incompatibility was irrelevant. The Court also held that the adjudicator's understanding and application of the relevant law could not be circumscribed by the agreement of the parties as this would effectively enable parties to contract out of the mandatory provisions of the Act.

K also submitted that, as a matter of natural justice, the adjudicator should at least have invited submissions from the parties before departing from their agreed position. This was rejected by the Court as it was clear that adjudication as envisaged by the 1996 Act was a process far removed from the traditional adversarial format adopted in the Courts. Additionally, the parties had no good reason to think that the adjudicator would be circumscribed by the terms of any written representations made to her especially considering that the adjudicator had the option of taking her own legal advice. It was also noted that the adjudicator had to issue her decision within a very short timescale. The Court was satisfied that the Lord Ordinary had reached the correct decision in dismissing the petition and the reclaiming motion was therefore refused.

The adjudicator is not fettered, when applying the relevant law, by the parties' representations: it is open to the adjudicator to reach a conclusion different from that agreed by the parties. A failure by the adjudicator to seek further representations from the parties before reaching a conclusion different from their agreed position is not necessarily a breach of the rules of natural justice.

This summary was provided by CMS Cameron McKenna LLP.

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

Click here to read full-screen | Click here to print the case