CIB and Birse entered into a contract on 8 August 2000 for the construction of a data centre in Molesworth Street, London E13. CIB terminated the contract on 21 December 2001. Birse brought claims based upon the final account, and the cost of completing the works on the basis that CIB had wrongfully terminated the contract. CIB claimed the additional cost of completing the works after Birse had left the site.
An adjudicator’s decision was given on 28 August 2002. The parties continued after that date to deal with outstanding issues by way of correspondence, negotiation and a mediation. A second adjudication, which was the subject of this enforcement, was commenced late in 2003. Some three months later the decision was given on 24 February 2004, by which Birse was ordered to pay CIB £2,161,892. Birse refused to pay and CIB sought to enforce the decision.
Birse argued that: (1) there was no dispute because it had not crystallised as the parties were continuing ongoing discussions in order to try to resolve the matter, (2) the adjudication was not conducted fairly and impartially because of the tight timescale, the considerable documentation and an error in the adjudicator’s award, (3) the size and complexity of the dispute meant that it could not be resolved fairly by adjudication, and (4) the adjudicator decided that there was no liability for defects, but then went ahead and awarded a sum of money in any event, despite the fact that he had said that Birse was not liable for defects.
Reference
HHJ Toulmin CMG QC considered that both parties had been jockeying for a tactical advantage for some time. A dispute had clearly crystallised by the time that the adjudication notice was issued. The fact that there were ongoing discussions did not stop CIB from making a reference to adjudication. The timetable was tight, but the adjudicator was not unfair in imposing it. The giving of extensions of time on a piecemeal basis during the adjudication such that the adjudication became almost three months was not unfair in itself. The refusal of the adjudicator to order “old fashion styled discovery” was reasonable. The allegation of a misapplication of the law to the facts cannot be an accidental slip or omission, but in any event the adjudicator answered the right question and so the decision was enforceable (Bouygues v Dahl – Jensen). The decision was therefore enforced.
*Full case details
19 October 2004, TCC, HHJ Toulmin, CMG QC, [2004] EWHC 2365 (TCC)
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Postscript
Another favourite challenge to the enforcement of an adjudicator’s decision is the argument that a dispute has not crystallised. If a dispute has not crystallised before the issue of the notice of adjudication then there will be no dispute to refer to adjudication and any decision of an adjudicator will be void.
Here, the judge held that ongoing negotiation did not mean that a dispute had not formed, and so the decision should be enforced.
