What is different about Shimizu, however, is that it teaches us that a party should keep its nerve if it wishes to contend that an adjudication decision is without jurisdiction. Once the party is tempted into a compromise, thereby acting in a manner consistent with the decision being valid, any jurisdictional challenge will be lost, no matter how meritorious.
Briefly, in Shimizu, the adjudicator's decision was challenged on the basis that he ordered payment in areas where he had no jurisdiction. The court disagreed. It made clear that it would not readily characterise the actual decision-making of the adjudicator as going to the adjudicator's jurisdiction.
To this extent the decision followed the reasoning of recent cases – the wrong answer to the right question is still enforceable. However, the decision is more interesting for a number of findings by Judge Seymour in relation to further arguments advanced by Shimizu, that even if the adjudicator had exceeded his jurisdiction, Automajor's challenge to his decision would still have failed.
I should say that these findings were not, technically, part of the court's decision, as the court agreed with Shimizu that the adjudicator had not exceeded his jurisdiction. This concept of part of a judgment going beyond the bounds of the first decisive argument is what is called "obiter", or outside the reason. Nevertheless, obiter findings are of useful guidance and some persuasive value both in future hearings and in terms of deciding what is the best conduct moving forwards.
The obiter findings revolved around two things Automajor did after the decision. First, Automajor wrote to the adjudicator asking him to amend his decision on the basis that he had awarded more money than he intended to. This was an application to amend the decision under the slip rule set out in the case of Bloor vs Bowmer and Kirkland. However, the adjudicator refused Automajor's request, making clear that he had awarded exactly what he had intended.
To be successful, a party wishing to make a jurisdictional challenge must maintain its position throughout
The second matter was that Automajor then made a part payment against the decision. Effectively, Automajor sought to cut out that part of the decision that they accepted, and to ignore the balance.
Shimizu contended that, by taking these courses of action, Automajor had defeated its challenge to the balance of the decision. They were, it was said, acts inconsistent with a challenge to the decision.
In relation to the first argument, the point was that by asking an adjudicator to amend the award sum under the slip rule, a party must have been accepting that the decision was valid. This the court accepted stating: "The invitation … to correct the award under the slip rule is only consistent with recognising it as valid."
Second, it was held that part payment was also inconsistent with a challenge as it indicated an acceptance of the validity of the decision. Automajor argued that part payment did not in this case indicate any such acceptance because Automajor was entitled to treat parts of the decision as with jurisdiction and parts as without it.
However, the court in Shimizu was equally unimpressed with that argument because the adjudicator's decision was for a single sum of money to be payable. In such circumstances, it was not open to a party or the court to undertake an involved exercise of unpicking and re-sewing the decision. In such circumstances, the decision is taken whole or left in its entirety, so "by paying part of the sum … Automajor elected to treat the award as valid".
James Bessey is a partner specialising in construction dispute resolution at Hammond Suddards Edge, Birmingham.