Dalkia Energy and Technical Services v Bell Group UK Ltd [2009] EWHC 73

This summary was provided by CMS Cameron McKenna LLP.

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


Although declaratory relief will “rarely” be granted during an ongoing adjudication, there are situations where it will be appropriate, such as the determination of which contract conditions apply.

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


Dalkia subcontracted works to Bell.  Bell referred a dispute over payment to adjudication and an adjudicator was appointed using the procedure set out in Bell’s standard terms and conditions.  Dalkia argued that the standard terms and conditions were not incorporated into the contract and that in any event they did not comply with s108 of the Housing Grants, Construction and Regeneration Act 1996 (“the 1996 Act”).  As a result Dalkia contended that the Scheme for Construction Contracts applied instead and that as such the Adjudicator appointed under Bell’s standard terms and conditions had no jurisdiction to determine the dispute.  Dalkia sought a variety of declarations to this effect using the CPR Part 8 procedure.  The primary use of Part 8 is where there is unlikely to be a substantial dispute as to fact.  Part 8 is therefore only appropriate in certain circumstances.  Where appropriate it provides a speedier procedure than the more common form of litigation, as there is no need for disclosure, witnesses and so on.


Bell argued that the claim was unsuitable for Part 8 and/or amounted to an abuse of process, and that the Court had no jurisdiction to make the declarations because the parties had given the Adjudicator the authority to reach a binding decision on his own jurisdiction, or failing that, the question whether the Bell conditions formed part of the contract between the parties was part of the dispute referred to the Adjudicator and as such the Court ought not to interfere with the Adjudicator’s conclusion.


Rejecting Bell’s arguments, the Court held:

  • Although Dalkia had delayed in initiating court proceedings and repeatedly taken a number of wrong points before the Adjudicator, this was insufficient reason to dismiss the Part 8 application.  It made sense to deal with the jurisdiction issue at the earliest opportunity rather than waiting until enforcement.
  • Unequivocal acceptance was required to establish that a party had agreed to abide by an adjudicator’s decision on jurisdiction.  There had been no unequivocal acceptance by Dalkia, on the contrary it had consistently reserved its position on jurisdiction.
  • Where (as here) it was agreed that there was a written construction contract of some kind between the parties (and therefore that disputes under the contract would have been referable to adjudication in some manner), the Adjudicator’s decision as to whether certain terms had been incorporated was properly part of the dispute referred to him and the courts would not normally interfere with his conclusions on enforcement.  Here however, the Court was being asked not to enforce an adjudicator’s decision but to give a full and final determination of the issue.  The Court therefore did have jurisdiction to decide the issue.
  • The pre-emptive use of the CPR Part 8 procedure in an ongoing adjudication is generally inappropriate.  However, the issue of which contract conditions applied was appropriate for Part 8.

Nonetheless, the Court refused to make the declarations sought by Dalkia, as it found on the facts that Bell’s standard terms and conditions were incorporated into the contract and did comply with the HGCRA (including the term upholding the validity of an adjudicator’s decision if “issued” after expiry of the statutory time limit, which accorded with case law allowing adjudicators a short additional period to issue the decision provided it is reached within time).

The Court also found that Bell’s service of the relevant documents had complied with the Bell conditions and dismissed Dalkia’s suggestion that Bell had impermissibly referred more than one dispute for determination (the Court noted the broad definition of dispute employed by the courts and found here that the dispute concerned sums due to Bell under the contract, which necessarily included both claims and variations).

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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