Nordot Eng. Services Ltd v Siemens plc [2000] TCC SF 00901 TCC 16/00

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Parties can agree to abide by the decision of an adjudicator even if it is uncertain whether the contract in question is governed by HGCRA 1996 and the court will give effect to such an agreement.

HHJ Gilliland QC, Technology and Construction Court

14 April 2000

N carried out works for S involving the provision of a gas turbine generating plant with exhaust gases used to provide steam generation in addition. The dispute between the parties was whether N was entitled to payment for various items of plant and equipment which it supplied and particularly whether there had been an agreement as to a particular set of rates or not. N referred the dispute to adjudication; S objected, contending the contract was not a "construction contract" within the meaning of the HGCRA 1996. S made their contention known to the adjudicator but also agreed to "abide by your decision in this matter and will comply with whatever decision you deem appropriate". The adjudicator agreed to act and made an award that S should pay N in excess of £100,000 plus VAT. N applied for summary judgment to enforce the adjudicator's award.

The court addressed the question of whether the parties could enter into, and if they could whether they had entered into an agreement to bind themselves to accept the decision of the adjudicator where the Act does not give the adjudicator power to decide the matter. The judge saw no reason why parties could not agree to abide by the decision of a third party if they so wished and the court should give effect to this agreement.

The judge thought it sensible that an adjudication should proceed and if a party objected to the jurisdiction of the adjudicator, he should make that clear, preserving his rights, and argue the question of jurisdiction before the adjudicator, making clear that he does not accept the decision if it is against him. The adjudicator would then be able to make a clear decision which, if necessary, would be able to be enforced by the courts by way of summary judgment.

The judge found, from the clear and unequivocal statement made by S, and from the fact that S did not seek to prevent the adjudication from going ahead, that S agreed to be bound by and abide by the decision of the adjudicator. The adjudicator's award was therefore enforced.

The Court did not find it necessary to decide whether or the contract was a "construction contract" within the meaning of the Act; the adjudicator had already decided that it was. The judge preferred to leave what may well be an important point of principle for decision in a case where it was necessary for the Court to decide the issue.

Parties can agree to abide by the decision of an adjudicator even if it is uncertain whether the contract in question is governed by HGCRA 1996 and the court will give effect to such an agreement.

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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