Edmund Nuttall Ltd v R G Carter Ltd [2002] EWHC 400 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

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

Whilst a dispute can be about a "claim", there is more to a dispute than simply a claim which has not been accepted. For there to be a dispute, there must have been an opportunity for the protagonists to consider the whole package of arguments advanced and the facts relied on by each side and to formulate reasoned arguments. Whilst a refinement of the arguments may not alter fundamentally the "dispute", a party cannot abandon wholesale facts or arguments and contend that because the "claim" remained the same the "dispute" remains the same. If the dispute does not remain the same an adjudicator appointed in relation to the reformulated dispute acts without jurisdiction

R Seymour QC, Technology and Construction Court

21 March 2002

C engaged N under a sub-contract on DOM/1 standard terms to carry out certain works. The contract contained provisions for referral of a "dispute" to adjudication (clause 38A). N claimed for recovery of costs as a result of prolongation (the "May Claim"). C resisted the claim. The parties corresponded without agreement. By a letter dated 14 December 2001, N gave notice of its intention to refer the matter to adjudication under clause 38A of DOM/1. The letter stated that a dispute had arisen between the parties as a result of C's failure to grant N a proper extension of time and ascertain the time related prolongation costs to which N was entitled. N subsequently served a referral notice, with a report prepared on their behalf, that had not previously been seen by C. The referral sought to rely on the report, which although made a claim for the same extension of time, justified that extension on quite different bases to that put forward in the May Claim. The report abandoned most of the matters relied on in the May Claim and also relied on a number of matters which had not featured in the May Claim.

C submitted to the adjudicator that the report was a new claim that C had not seen before. The adjudicator rejected that submission and found in favour of N on the basis of the report. C failed to pay within the specified time and N brought proceedings to enforce the adjudicator's award.

The issue that arose was what constitutes a "dispute" for the purposes of clause 38A of DOM/1 and s.108 of the Housing Grants, Construction and Regeneration Act 1996, and whether in the light of the notice of 14 December, the adjudicator had acted without jurisdiction in determining the "dispute" on the basis of the report.

The Court ruled for the purposes of adjudication under the 1996 Act, or equivalent contractual provision, it is possible for a party to refine its arguments and abandon points not thought to be meritorious, without altering fundamentally the nature of the "dispute". However, a party cannot abandon wholesale facts previously relied upon or arguments previously advanced and contend that because the "claim" remains the same as that made previously, the "dispute" is the same. The point of adjudication is that the parties should first have had a chance to resolve their differences before submitting to an independent adjudicator for a decision on facts and arguments that have previously been rehearsed among themselves. It was therefore found that the new "claim" based on the report did not amount to a "dispute", as the report did not form part of the "dispute" that existed at the time of the referral concerning the May Claim. As such, the adjudicator had acted without jurisdiction and his decision was therefore unenforceable.

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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