Ballast Plc v Burrell Ltd [2002] : P336/01

This summary was provided by CMS Cameron McKenna LLP.

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

An adjudicator should consider the claims put forward in the notice of referral and decide whether they are validly asserted under the contract. If he declines to address this, he will not exercise his jurisdiction to determine the dispute.

Lord President, Lord Johnston, Lord Weir, Extra Division, Inner House, Court of Session (Scotland)

17 December 2002

This was an appeal from the first instance decision reported at page 72 of Adjudication Watch. At first instance, the Court had decided that the adjudicator's decision, under the Scottish Scheme for Construction Contracts, was a nullity since the adjudicator had not addressed the question put to him. The adjudicator had considered that he could only consider the terms of the contract entered into by the parties and thus failed to have regard to what in reality had happened.

BC argued that the adjudicator had determined the dispute. He had found that the dispute went far beyond the notice to refer the dispute to adjudication which only referred to specific contractual terms.

B argued that the notice of adjudication and the referral notice both referred to a claim for valuation of the works performed within the terms of the contract. The meaning of Section 107 of the Act did not mean that the adjudicator could only consider terms of the contract that were in writing. If there were other terms of the contract, or parts of the original contract that had been varied, that was for the adjudicator to determine. The adjudicator here had declined to consider the matter.

The Court decided that the first instance Court was correct. The adjudicator's jurisdiction is restricted to issues focussed in the dispute, but he has the power and the duty to determine whether or not a claim is validly asserted under the contract. He can answer in the positive or negative, but he cannot decline to address it, as the adjudicator here had effectively done. The adjudicator's failure to consider the issue was an error of law and he failed to exercise his jurisdiction. The adjudicator's decision was therefore a nullity.

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