Can one adjudicator read 52 lever-arch files and nine boxes of documentation in 100 days and still reach a fair decision? Here’s what Judge Toulmin said

If ever a case was a natural candidate for an argument about the appropriateness of the adjudication process, the dispute between CIB Properties and Birse Construction was surely it.

Back in 2000, CIB engaged Birse to build the Riverdale Data Centre in east London. In late 2001, CIB terminated Birse’s contract. Birse asked an adjudicator to decide whether its contract had been wrongfully terminated. The adjudicator found against Birse on that point.

The sums involved in the ensuing dispute were substantial. CIB claimed from Birse losses in the region of £12m. Over a period of about 15 months, numerous meetings took place at which the parties explored the possibility of a settlement. There was also an unsuccessful mediation.

In November 2003, CIB launched adjudication proceedings, and an eminent adjudicator was appointed. CIB’s referral ran to some 52 files of documentation. Birse responded with nine boxes of documents. Extensions of time were sought and agreed, taking the process beyond the 42 days envisaged by the Construction Act.

By early February 2004, about two-and-a-half months after the adjudication had commenced, with numerous submissions having been exchanged and many meetings held (including no fewer than six experts’ meetings), the adjudicator convened a “sweep up” hearing in an attempt to bring matters to a conclusion. Further directions were given and towards the end of February 2004 the adjudicator delivered his 139-page decision.

In his decision, the adjudicator made a number of observations regarding the predictable jurisdictional challenges that Birse’s solicitors had flagged up at the outset. These involved most of the old chestnuts: no dispute had arisen, Birse had been ambushed, the complexity of the matter made it inappropriate for adjudication and the timeframe made the process inherently unfair.

In considering these objections, the adjudicator explained that he had applied a two-stage test. First, he asked himself whether he had understood the issues before reaching his decision on them. Then he had gone on to ask himself whether he was satisfied that in the circumstances he had been able to do broad justice between the parties.

CIB’s referral ran to some 52 files of documentation. Birse responded with nine boxes of documents

It will surely come as no surprise that this matter ended up in contested enforcement proceedings. Birse argued that the numerous “piecemeal” extensions to the statutory timetable agreed by the parties could not cure the inherent unfairness of the process. Conversely, Birse also argued that, had a 100-day timetable been set at the beginning, that might have been a different matter. The firm also placed particular emphasis on the large amounts at stake and the fact that the dispute involved about 150 lever-arch files of documentation.

The judge, His Honour Judge Toulmin, in addressing the principles that he should apply in considering the case, suggested that the relevant test was not, as previous decisions had suggested, whether the dispute was too complicated to refer to adjudication. Instead, it was whether the adjudicator was able to reach a fair decision within the time allowed by the parties. This suggests that the willingness of a claimant to agree to extensions of time will be highly significant when this issue arises in the future.

The judge also considered that the proper reading of section 108 was that an adjudicator’s duty to reach a decision within the statutory timeframe was subject to the proviso that he be able to reach that decision impartially and fairly within those time limits. If he were not able to do so, the judge suggested, he should resign. Furthermore, the defendant is under no obligation to agree to extending the time for his decision beyond the statutory time limit.

In the circumstances, the judge was satisfied that the adjudicator had been able to reach a fair and impartial decision. He also commented that the two-stage test that the adjudicator had himself applied was impeccable.

Dominic Helps is a partner in solicitor Shadbolt & Co,