Bouygues UK Ltd v Dahl-Jensen UK Ltd [1999] HT99000/99

This summary was provided by CMS Cameron McKenna LLP.

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The court will look at the subject of the reference to see whether the adjudicator has exceeded the terms of the reference but will give a fair, natural and sensible interpretation to his decision in the light of disputes that are the subject of the reference. The court should guard against characterising a mistaken answer to an issue that lies in the scope of the reference as an excess of jurisdiction.

Dyson J, Technology & Construction Court

17 November 1999

D was the mechanical sub-contractor to B. The contract incorporated the CIC Model Adjudication Procedure (2nd edition). D began work on 15 April 1998, and B purported to determine the sub-contract on 8 July 1999. D issued its notice to adjudicate in August 1999 claiming sums for additional works and costs for delay and disruption in the sum of £5,225,000. B then issued a notice to adjudicate on 9 September, and claimed £5,730,000 for overpayments, liquidated damages and breaches of contract.

The adjudicator made a mistake when calculating sums due, and took into account retention on one side but not the other. The result was that B were ordered to pay monies to D, when in fact, had the calculation been correct, D would have paid B.

B's solicitors wrote to the adjudicator and asked him to correct his error as it was a "slip." The adjudicator refused, saying that the calculations correctly reflected his intention, and as he was now functus officio he would not give further reasons or deal with further submissions unless the parties agreed.

B issued proceedings, seeking a declaration that the award was void and should be set aside, that money was due from D to B. D applied for summary judgment of the sum awarded to it, and sought to stay B's claim for a declaration to arbitration.

The court agreed that the adjudicator had clearly made a mistake. However, this did not mean that he had exceeded his jurisdiction: rather that he gave the wrong answer but to the right question. The court would therefore enforce his decision.

"The purpose of the scheme is to provide a speedy mechanism for settling disputes in construction contracts on a provisional interim basis, and requiring the decisions of adjudicators to be enforced pending final determination of disputes by arbitration, litigation or agreement, whether those decisions are wrong in point of law or fact. It is inherent in the scheme that injustices will occur, because from time to time, adjudicators will make mistakes. Sometimes those mistakes will be glaringly obvious and disastrous in their consequences for the losing party....Where the adjudicator has gone outside the terms of his reference, the court will not enforce his purported decision. This is not because it is unjust to enforce such a decision. It is because such a decision is of no effect in law."

The court will look at the subject of the reference to see whether the adjudicator has exceeded the terms of the reference but will give a fair, natural and sensible interpretation to his decision in the light of disputes that are the subject of the reference. The court should guard against characterising a mistaken answer to an issue that lies in the scope of the reference as an excess of jurisdiction.

This decision was upheld by the Court of Appeal on 31 July 2000 (see page 43).

The court will enforce a decision that is wrong (even if plainly wrong) provided it is within the scope of the adjudicator's jurisdiction.

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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