Christiani & Nielsen Ltd v Lowry Centre Dev Co Ltd [2000] HT 001/59 TCC

This summary was provided by CMS Cameron McKenna LLP.

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The parties could not contract out of the HGCRA by stating that a Deed executed after 1 May 1998 takes effect from an earlier date. A party may waive the right to rely upon jurisdictional arguments in court if it does not raise them before the adjudicator. An adjudicator should investigate any jurisdictional challenge and give a non-binding decision

HHJ Thornton QC, Technology & Construction Court

29 June 2000

The dispute arose when L deducted liquidated damages from sums otherwise due to C under a contract made by deed in December 1998, incorporating the ICE conditions, 5th edition. Work had commenced earlier, under a letter of intent dated 11 August 1997. The Deed stated that notwithstanding the date of its execution, it would take effect from 11 August 1997. Therefore, L argued that there was no right to adjudicate because the contract pre-dated the HGCRA.

The adjudicator held that he did have jurisdiction, and the Court agreed. The letter of intent was clearly intended to have a ltd life. The aim of the Deed was to ensure that it covered work carried out before it was executed. Parties could not contract out of the terms of HGCRA by such provisions. L also tried to argue that C was estopped from relying upon HGCRA, on the grounds that C had been aware of L's understanding of the Deed. This argument had not been advanced in front of the adjudicator. The Court held that it would be unfair to allow L to rely upon a ground not previously advanced, and that by failing to raise it, L had waived the right to argue it now. In any event, an estoppal was not made out, because such a clause would be invalid as it would deprive C of its statutory right to adjudicate.

L argued that the decision was not enforceable because it decided a question that the adjudicator had no power to decide. L had argued that the Deed contained a mistake by stating the contract period to be 81 weeks. L stated that this should be 57 weeks. L had deducted liquidated damages based upon the 57 week contract period. L could only have succeeded in its argument if it was entitled to have the Deed rectified, and to deduct liquidated damages in advance of the rectification. The adjudicator decided that as this point was fundamental to L's right to deduct liquidated damages, it was necessarily connected with the dispute. The adjudicator found no evidence that C was aware of any mistake in the Deed. Therefore, rectification would not be available. The Court agreed, and found that the decision was within the adjudicator's jurisdiction.

The Court left open the question of whether an adjudicator could decide an issue of rectification in any event. A dispute "under a contract" has been held to exclude issues of misrepresentation and rectification. Rectification may well be an issue "connected with" a contract. The Court also approved the course of action adopted by the adjudicator when dealing with a challenge to jurisdiction. The adjudicator should investigate any challenge and give a non-binding decision. If he does not do so, he may not be acting impartially.

The parties could not contract out of the HGCRA by stating that a Deed executed after 1 May 1998 takes effect from an earlier date. A party may waive the right to rely upon jurisdictional arguments in court if it does not raise them before the adjudicator. An adjudicator should investigate any jurisdictional challenge and give a non-binding 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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