Discain Project Services Ltd v Opecprime Developments Ltd No2 [2001] EWHC TCC 435

This summary was provided by CMS Cameron McKenna LLP.

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

HHJ Bowsher QC, Technology & Construction Court

Where there has been a substantial and relevant breach of the rules of natural justice, and where an objective bystander could conclude that the adjudicator was or may be biased, the Court would refuse to enforce his decision.

11 April 2001

This is the Court's judgment following a full trial of the dispute concerning the enforceability of the adjudicator's decision, after the Court refused summary judgment (see page 46 above). The Court invited the adjudicator to be joined to the action. The adjudicator did not so wish, but he was called by the Court as a witness so that he could be cross-examined by both parties, and he also filed written submissions.

The complaint about the adjudicator's conduct related to telephone conversations about matters of substance (rather than merely administrative matters) with D, the contents of which had not been promptly communicated to O. It was alleged by O that this breached paragraphs 12 and 17 of the Scheme, and was not in accordance with natural justice.

The Court said that there was no reason why an adjudicator should not have telephone conversations with the parties. However, acting inquisitorially did not mean acting unfairly: the adjudicator had to act in accordance with the Scheme and natural justice, and pass any information to the other party for comment. There would be room for disagreement and suspicion about what had been said. Adjudicators might be well advised to keep telephone conversations for administrative matters.

The Court accepted that the adjudicator was not actually biased, but said it must consider whether there was an appearance of bias, and if so, the result of that. The Court agreed that there were matters of importance that should have been reported by the adjudicator to O. The facts as found by the Court would lead a fair minded and informed observer to conclude that there was a real possibility or danger of bias of the adjudicator. The Court did not have to consider D's submission that this had no effect, as the point discussed by the adjudicator and D went to the root of the adjudication. The Court did not express a view about whether the adjudicator was right on that point, but decided what mattered was that the decision was arrived at in the wrong way.

The Court concluded that it was not right that a Court should enforce a decision reached after a substantial breach of the rules of natural justice. An unsuccessful party in a case of this sort would have to do more than merely assert a breach of the rules; any breach proved must be substantial and relevant. Further, there was a qualification to the rules, in that the adjudicator had to conduct the proceedings in accordance with natural justice, or as fairly as the limitations imposed by HGCRA permitted (Glencot v Ben Barrett).

The limitations imposed by HGCRA did not require the adjudicator to have the telephone conversations about which O complained. Therefore, the Court declined to enforce the adjudicator's decision. The Court stressed that there had been no examination of the merits of what lay behind the adjudicators decision, so D could bring the dispute before a Court or Arbitrator.

Where there has been a substantial and relevant breach of the rules of natural justice, and where an objective bystander could conclude that the adjudicator was or may be biased, the Court would refuse to enforce his 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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