Britcon (Scunthorpe) v Lincolnfields [2001] HT 01/259

This summary was provided by CMS Cameron McKenna LLP.

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It was not for the Judge to decide whether the adjudicator was right as a matter of law or in evaluating the evidence submitted.

His Honour Judge Thornton QC, Technology and Construction Court

29 August 2001

L engaged B to carry out infrastructure works. L failed to make the final payment and B issued notice of adjudication, seeking a decision as to whether payment should be made based on an interim valuation certificate. L argued that, pursuant to an oral collateral agreement made by the parties' representatives prior to the principal contract being made, the money was held in an Escrow Account and could not be released until certain works were substantially complete, and in any case, it had incurred direct losses which it was seeking to recover from B.

The adjudicator, Mr Michael E. Morris, decided on a sum to be paid to B. No collateral contract existed; since the principal contract had been finalised at a later date any such terms would have been included in it if they existed. The alleged contract was oral and related to financial matters, so the HGCRA and the Scheme for Construction Contracts did not apply and he therefore had no jurisdiction to deal with the oral contract. His jurisdiction was also limited by Section 108(1) of the HGRCA to matters arising under construction contracts, not to matters connected to it.

B applied for summary judgment to enforce the decision. The question arose as to whether the decision was vitiated or unenforceable on the basis that the adjudicator had exceeded his jurisdiction or failed to consider and give effect to material submitted by L regarding the alleged collateral agreement.

The Judge held that the court was acting "with the benefit of hindsight, in circumstances in which the court can and must take into account that an adjudicator's decision is one that is published under circumstances of considerable pressure both of time and often discipline". Arguably, the adjudicator had erred in deciding that the contract in question was oral and fell outside the HGCRA, however this was not discussed further. The adjudicator had reached three clear decisions: firstly, he had no jurisdiction to deal with the issue raised by L; secondly, there was, in any event, no such agreement; and finally, even if there was, and he had jurisdiction to deal with it, it had been superseded by the later principal agreement. It was not for the Judge to decide whether the adjudicator was right as a matter of law or in evaluating the evidence submitted. The adjudicator had dealt with the issue referred to him by L. The adjudicator had dealt with tissue referred to him by L. The Judge rejected L's contention that the decision lacked jurisdiction in that it was vitiated by the adjudicator's declining to deal with an essential issue referred to him, or that it should not be enforced because it failed to comply with the provisions of Rule 17 of the Scheme for Construction Contracts.

It was not for the Judge to decide whether the adjudicator was right as a matter of law or in evaluating the evidence submitted.

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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