Cowlin Construction Ltd v CFW Architects [2003] EWHC 60

This summary was provided by CMS Cameron McKenna LLP.

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

A party who accepts that an adjudicator has jurisdiction in relation to a dispute cannot go back on that in a subsequent adjudication. Challenges to jurisdiction should be made at the earliest opportunity. There was a contract evidenced in writing even though not all terms had been agreed and recorded in writing.

HHJ Kirkham, Technology and Construction Court, Birmingham

15 November 2002

Cowlin were employed as a design and build contractor and CFW acted as its architect for a project to rebuild servicemen's housing for the MoD. CFW ceased work in August 2001 and wrote to Cowlin claiming payment of outstanding invoices for which no Withholding Notice had been served. In a pre-emptive strike, Cowlin submitted a Notice of Adjudication seeking a declaration as to the form of contract, that CFW wrongfully repudiated the contract, and seeking costs. CFW issued a counter-notice which largely mirrored the Notice of Adjudication, however seeking the declaration in CFW's favour on the points raised in the Notice of Adjudication. Two weeks after serving their Counter Notice, CFW wrote to Cowlin and questioned the validity of the Adjudicator's appointment. In their response to Cowlin's Referral Notice, CFW contended that no contract had been concluded and that therefore the Adjudicator did not have jurisdiction to decide which form of contract applied.

This was an application for summary judgment for the enforcement of a subsequent Adjudicator's Award in favour of Cowlin for the sum of £323,373.52 (including VAT). CFW defended the application arguing that the Adjudicator did not have jurisdiction to determine the dispute as there was no construction contract between the parties; and there was no dispute capable of being referred to adjudication.

Cowlin contended that it had been decided in the previous adjudication that there was a construction contract. CFW argued that they had not agreed that the Adjudicator had jurisdiction to determine that issue. As the Adjudicator in the second adjudication took the decision of the first Adjudicator as the basis for her award, this compromised the second Adjudicator's jurisdiction.

The Court held that, by submitting the counter-notice in the first adjudication, CFW had accepted that the Adjudicator had jurisdiction to determine the form of the contract. They had expressly accepted that the Adjudicator had jurisdiction to decide the issues set out in the Counter-Notice. CFW were therefore bound by that election and had waived their right to object to the Adjudicator's decision. The first things that come to a responding party's mind (and in particular one which is legally represented) when a Notice of Adjudication is served are jurisdiction and whether there is a construction contract, so CFW had sufficient knowledge to accept the Adjudicator's jurisdiction at that time. Any challenge to jurisdiction should be made at the earliest opportunity.

The Court then turned to the question of whether there was a construction contract. The issue was whether the contract was in writing. The Court held that, as the essential terms of the contract had been agreed and set out in a schedule containing payment dates and amounts and that the parties had proceeded in accordance with that document, the contract had been concluded and evidenced in writing.

As to whether there was a dispute, the Court noted that, as CFW had been in possession of Cowlin's claim for 8 weeks and detailed particulars for 6 weeks by the time the Notice to Adjudicate was issued. CFW had been given sufficient opportunity to consider Cowlin's claim and, as they had neither admitted nor rejected the claim in that period, the dispute had clearly crystallised.

A party who accepts that an adjudicator has jurisdiction in relation to a dispute cannot go back on that in a subsequent adjudication. Challenges to jurisdiction should be made at the earliest opportunity. There was a contract evidenced in writing even though not all terms had been agreed and recorded in writing.

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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