John Mowlem & Co Plc v Hydra-Tight Ltd [2000] HT 184

This summary was provided by CMS Cameron McKenna LLP.

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

A contract can allow for the adjudicator to be selected by one of the parties. A clause requiring a notice of dissatisfaction to be served prior to adjudication may be unlawful. It is permissible for the adjudicator to be appointed to be appointed by one party from a list drawn up when the dispute arises.

HHJ Toulmin CMG QC, Technology & Construction Court

16 June 2000

In this case, the parties entered into a sub-contract which incorporated the core clauses and Option A clauses of the NEC Engineering and Construction Sub-Contract, plus the addendum "Y(UK)2" published in April 1998, together with some Additional Conditions of Contract, set out as Clause Z. These additional clauses provided that J had to appoint the adjudicator, from a list of adjudicators considered suitable at the date of Notification of Dispute. This was found by the Court, on the evidence, to be members of Atkin Chambers. H ignored this provision and asked the RICS to appoint an adjudicator. The adjudicator appointed by the RICS declined jurisdiction, and stated that the appointing body under the sub-contract was the ICE. H applied to the ICE, and a second adjudicator was appointed, who found that he did have jurisdiction.

J then applied for a declaration that the adjudicator had no jurisdiction, because he had not been nominated or appointed in accordance with the contractual provisions. The application was heard shortly before the end of the 28 days in which the adjudicator had to reach his decision.

The contract also required a party to serve a notice of dissatisfaction and enter into negotiations for a 4 week period before an issue became a dispute or difference referable to adjudication. Both parties agreed that these provisions did not comply with the Act, since this contradicted the statutory requirement that adjudication can be commenced at any time. The Court also agreed that a party had to be given an immediate right to refer a dispute at any time. The Court also noted that Clause Z did not set a timetable for securing the appointment of the adjudicator.

However, J maintained that the provisions regarding the appointment of the adjudicator should stand. The Court found that since the contract did not comply with Section 108, the Scheme applied. Parts of the sub-contract that did comply with the Act could not be retained and used in substitution or to fill in parts of the sub-contract. However, paragraph 2.1 of the Scheme allowed the parties to provide for the appointment of the adjudicator in the contract. The list of members of Atkin Chambers was a sufficient identification of the adjudicator - the Scheme did not require an individual to be identified in advance. Therefore, an adjudicator appointed by the ICE lacked jurisdiction.

The Court gave the declaration sought, and granted an injunction to stop H from taking any substantive step in the adjudication. The Court could not stop the adjudicator making his decision, since he was not a party to the proceedings. It is not clear upon what basis the injunction was granted, bearing in mind the Court's decision in Workplace Technologies plc. J's application to recover the costs it had incurred in defending the adjudication (in which it had participated under protest) was adjourned.

A contract can allow for the adjudicator to be selected by one of the parties. A clause requiring a notice of dissatisfaction to be served prior to adjudication may be unlawful. It is permissible for the adjudicator to be appointed by one party from a list drawn up when the dispute arises.

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