Simons Construction Ltd v Aardvark Developments Ltd [2003] EWHC 2474 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

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

Where an adjudicator fails to issue his decision within the appropriate time then this will not of itself mean that the decision is not binding upon the parties.  Time may be of the essence for issuing his decision, but the parties have the ability to terminate the adjudicator's appointment if the time for issue of the decision expires without it being given and, if they do not, then they are likely to be bound by the adjudicator's late decision.  

TCC, Judge Richard Seymour QC
29 October 2003

The parties were involved in a redevelopment project in Ely under a JCT Standard Form of Building Contract, with Contractor's Design 1981 Edition (incorporating the JCT adjudication amendments).  A dispute arose between the parties and was referred to adjudication.  The parties and the Adjudicator entered into a JCT Adjudication Agreement.  The adjudicator issued his decision to the parties in draft for comment and a few days later issued his final decision, unchanged as to the substantive comments.  The adjudicator had largely found against Simons and directed that Simons pay his costs.

Simons brought proceedings for a declaration that the adjudicator's draft decision was not a decision but only an invitation to debate the conclusions therein, and that his final decision was not binding as it had been issued after the date set out in the Adjudication Agreement, as extended by agreement.

The judge considered the circumstances in which the first and the final decisions were issued and found on the facts that the first decision was not a decision.  Therefore, the adjudicator only made his decision when the final decision was published.  The question was, therefore, whether the late delivery of the decision meant that it was not binding upon the parties.  The judge considered the terms of the adjudication agreement, and particularly clauses 5.1 and 5.2 that reflect paragraph 19 of the Scheme.  Clauses 5.1 and 5.2 provide that the parties may jointly terminate the adjudication agreement at any time on written notice and, if the termination is due to the adjudicator's failure to give his decision within the relevant period, then the adjudicator is not entitled to his fees and expenses. 

The Court held that the Adjudicator's final decision was binding for the following reasons:

  • The Adjudication Agreement contained the contractual terms on which the Adjudicator had agreed to issue his decision.  The Adjudication Agreement contained provisions for the termination of the Adjudicator's appointment, by joint action by the parties, and the subsequent referral to an alternative adjudicator in the event that the Adjudicator failed to publish his decision within the relevant time scale. 
  • The Judge stated that those provisions were not exhaustive and that he thought that time was of the essence under the Adjudication Agreement. This meant that if the Adjudicator failed to issue his decision in time then it was open for the parties to treat his failure to do so as a repudiatory breach of the Agreement and to terminate the Agreement by accepting the breach. 

As the parties had taken no such steps (under either course of action) before the decision was published, the decision was binding.

Summary:  Where an adjudicator fails to issue his decision within the appropriate time then this will not of itself mean that the decision is not binding upon the parties.  Time may be of the essence for issuing his decision, but the parties have the ability to terminate the adjudicator's appointment if the time for issue of the decision expires without it being given and, if they do not, then they are likely to be bound by the adjudicator's late decision.

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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