HG Construction Ltd v Ashwell Homes (East Anglia) Ltd. [2007] EWHC 144 (TCC)

This summary was provided by CMS Cameron McKenna LLP.

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

This case reiterates the principle that an adjudicator’s decision may not be overruled by a subsequent adjudicator.  To the extent that an adjudicator purports to decide any dispute that has already been decided by an earlier adjudicator, the later adjudicator’s decision will not be binding.

Mr Justice Ramsey – Queen’s Bench Division, Technology and Construction Court

Ashwell was the employer and HG Construction the contractor under a JCT contract relating to a new housing development.  Various disputes arising between the parties were referred to adjudication.  In Adjudication No.1, the adjudicator decided that the liquidated and ascertained damages (“LADs”) provisions in the contract were valid and enforceable.  In Adjudication No.3, the adjudicator decided that the LADs were not enforceable and that Ashwell should refund LADs of £184,627 to HG. 

HG applied to the TCC for summary judgment enforcing the decision arising out of Adjudication No.3.  Ashwell opposed the enforcement of Adjudication No.3 on the basis that the adjudicator had decided substantially the same dispute as had already been decided by a different adjudicator, in Adjudication No.1. 

As a matter of contract, Mr Justice Ramsey found that the parties had accepted that they were bound by the decision of an adjudicator.  Therefore, to the extent that a subsequent adjudicator purported to decide any dispute that had already been decided by an earlier adjudicator, the later adjudicator’s decision would not be valid or enforceable.  As a matter of practice, an adjudicator should consider whether he is being asked to decide upon a matter on which there is already a binding decision by another adjudicator and, if so, he should decline to decide that matter/resign.

On the facts, the court found that the subject matter of Adjudication No.3 was substantially the same dispute as had been decided by the adjudicator in Adjudication No.1, therefore the decision reached by the adjudicator in Adjudication No.3 was not valid.  The application for summary judgment was dismissed.

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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