Shimuzi Europe Ltd v Automajor Ltd [2002] BLR 113HT 01/427

This summary was provided by CMS Cameron McKenna LLP.

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An adjudicator has jurisdiction to make a mistake provided he asks himself the questions that have been referred to him. If a party invites the adjudicator to correct mistakes in his decision under the slip rule and makes payment of part of the amount awarded by the adjudicator it will be found to have elected to forego any opportunity it might otherwise have had to object to the decision

Judge Seymour QC, Technology and Construction Court

17 January 2002

Under the JCT Form of Contract With Contractor's Design (1998 ed) as amended, S, as contractor agreed to undertake for A, the employer, the design and construction of business work space in London. The agreement incorporated the TeCSA Rules.

S issued an Adjudication Notice for various matters of alleged dispute with A under the contract. One of the elements was a claim by S for £161,996.89 for alleged variations to smoke ventilation works under the contract. A did not accept that there had been any variation in respect of the smoke ventilation. Prior to the Adjudication Notice, A had made a £50,000 payment on a without prejudice basis towards the alleged value of the alleged variations regarding the smoke ventilation works.

In the adjudication, A sought to raise a counterclaim for the £50,000 already paid to S. The adjudicator ruled he had no jurisdiction to entertain any counterclaim. He also ruled that the alleged variations were not variations. However, the adjudicator awarded S £321,300.99 and part of this calculation included a sum for the alleged variations to the smoke ventilation works. A asked the adjudicator to amend his decision as he had included a payment for the alleged variations when he had ruled that they did not constitute variations. The adjudicator refused claiming he was aware of the basis of the calculations, having heard evidence from both the parties. A disputed what had been said at the hearing.

S issued a Part 8 claim form seeking enforcement of the adjudicator's award. A submitted that it was inappropriate to proceed under CPR part 8 where it appeared that there was, or might be, a dispute of fact as to what had been said to the adjudicator. It was held that the procedure adopted could not be faulted and the procedural objection taken on behalf of A failed.

Following Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd, the judge thought it necessary to identify which question(s) were referred to the adjudicator for decision. The Notice included the dispute of "sums due under the contract". The judge held that it was obvious that the adjudicator had jurisdiction, given the terms of the Notice, to decide both that some sum was payable by A to S and what that sum was. The judge confirmed that an adjudicator had jurisdiction to make a mistake provided he asked himself the questions that had been referred to him for decision. It was held that even if the adjudicator had misunderstood what had been said to him at the hearing, the proper mechanism for correcting an error was in the course of a final account negotiation or in arbitration proceedings.

The judge then addressed the alternative issue as to whether, even if the adjudicator had exceeded his jurisdiction in making the award, A waived any objection to the adjudicator's jurisdiction by inviting the adjudicator to correct his decision under the slip rule and by making part payment of the award. It was held that by inviting the adjudicator to correct his decision under the slip rule and by paying part of the sum, A elected to forego any opportunity it might otherwise have had to object to the award.

An adjudicator has jurisdiction to make a mistake provided he asks himself the questions that have been referred to him. If a party invites the adjudicator to correct mistakes in his decision under the slip rule and makes payment of part of the amount awarded by the adjudicator it will be found to have elected to forego any opportunity it might otherwise have had to object to the decision.

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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