Balfour Beatty Engineering v Shepherd Construction Limited [2009] EWHC 2218

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The case concerned a disputed enforcement of an adjudicator’s decision.  The defendant resisted enforcement on the grounds that in serial adjudications, the second adjudicator had decided something that had already been decided by the first.  The decision of the second adjudication was cast in colloquial and loose language and the defendant argued this made the decision unintelligible, therefore breaching the rules of natural justice.  The defendant also claimed that the adjudicator was biased against its delay analysis expert and failed to give sufficient reasons for his decision.  
Technology and Construction Court, Mr Justice Akenhead


Shepherd Construction Limited (“SCL”) was the main contractor on a project to build a healthcare facility.  SCL subcontracted certain works to Haden Young Limited (“HYL”).  The subcontract works were completed late and a dispute arose between the parties as to the extensions of time (“EOTs”) that were due to HYL.  HYL referred the matter to adjudication.  The notice of adjudication limited the dispute to a particular claim for an EOT, relating specifically to the issue of access to a certain part of the works.  The adjudicator in the first adjudication (“the First Adjudicator”) did not grant an EOT.  HYL subsequently produced a retrospective analysis of delays to the works (“the retrospective delay analysis”), and used this as the basis for a second adjudication.  A new adjudicator was appointed in this second adjudication (“the Second Adjudicator”).  In the second adjudication SCL relied upon the reports of an expert in defending HYL’s claims to EOTs.  As part of its reply to SCL’s defence, HYL attacked the independence of SCL’s expert, claiming that he was acting in an unprofessionally partisan manner.  In his decision, the Second Adjudicator rejected this claim.  The Second Adjudicator asked both parties to produce contemporaneous notes of any delays.  SCL said that it had no contemporaneous notes, and said this was because HYL had failed to give notice of contractually defined Delay Events.  The Second Adjudicator subsequently awarded HYL an extension of time up to the actual date of completion and repayment of £1.2m (ex VAT and interest) withheld by SCL by way of liquidated damages and prolongation costs.


SCL resisted enforcement on the grounds that the Second Adjudicator had:

  • acted outside of his jurisdiction in that:
    • he had not responded to the dispute referred to him;
    • he had materially decided something which had been addressed by the First Adjudicator.  SCL argued that because the Second Adjudicator did not expressly say that he had excluded from his findings the grounds for an EOT addressed by the First Adjudicator, then these grounds must have formed a significant part of his decision in the second adjudication; and
    • he had decided matters in his decision contrary to what had been decided by the First Adjudicator.
  • acted contrary to the rules of natural justice in making an adverse inference in relation to the non-production of contemporaneous notes by SCL;
  • acted in a biased way in relation to SCL’s delay analysis expert (SCL effectively alleged that the Second Adjudicator had “taken against” their delay analysis expert and that this displayed actual or ostensible bias); and
  • failed to give sufficient reasons for his advice (a reasoned decision was required by the dispute resolution procedures in the sub-contract).


The Court found as follows:

  • Jurisdictional challenges
    • On the facts, the Second Adjudicator had responded to the dispute referred to him and had not made his decision on the basis of matters which had been addressed by the First Adjudicator.
  • Natural Justice
    • The adjudicator had not acted contrary to the rules of natural justice in making an adverse inference in relation to the non-production of documents by SCL.
    • Adjudicators are not subject to the same rules of evidence which bind the courts.  An adjudicator is therefore free to draw such inferences as he wishes from the non-production of documents by one of the parties.
    • However, in many adjudications it will be appropriate for the adjudicator to give advance notice of drawing such an inference.  The Second Adjudicator gave such notice in this case, which was fair in the circumstances. 
    • In any event, the Second Adjudicator’s decision was not based on the drawing of any adverse inference.
  • Bias
    • The adjudicator had not shown either actual or ostensible bias.  A finding in an adjudicator's decision which is adverse and is even a criticism of one party's or one of its witness's behaviour does not give rise to a valid charge of bias of either sort.
  • Sufficient reasons
    • The failure to give reasons is not a breach of natural justice, but an unreasoned decision is not a valid decision for the purposes either of the Scheme for Construction Contracts or under a contract requiring a reasoned decision. 
    • The fact that the adjudicator does not deal with every single argument does not mean that a decision is unreasoned.  Adjudicators should not be judged by the standards of a judge or arbitrator in terms of reasoning. 
    • The fact that the reasoning in a decision is ambiguous does not mean that the decision is unreasoned. 
    • However, a decision needs to be intelligible so that the parties can know what the adjudicator has decided and why.
    • The adjudicator’s decision in this case was in places confusing and repetitive but capable of being understood.

Having found as set out above, the Court accordingly gave judgment in favour of HYL.

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