This adjudication ran into difficulty. No wonder, when the parties involved bombarded the adjudicator with too much information for the short amount of time he had
It is sin, a mortal sin, to be the adjudicator and do this. The mortality bit is that the whole adjudication is shot down dead - as John Cleese in Monty Python explained about the Norwegian Blue, “this ‘ere parrot, is dead, not restin’ my lad, he’s dead”. ABB vs Bam Nuttall are looking right now at a dead adjudication.
It’s a London Underground job. ABB is the main contractor. Bam Nuttall is its subcontractor to decommission and remove redundant cables then design new stuff.
NEC3 is the basic form of subcontract, twiddled with and - lo - here is another NEC dispute. Another iffy part of this contract was that there was a conceptual design statement (CDS). Bam was supposed to survey the underground network and ascertain whether this CDS was viable, then somehow the CDS became viable and that became the subcontract price. Bam then developed this immaculate conception into detailed design and submitted it to ABB and the chief angel for approval.
Bam piped up saying that the CDS was invalid. The £1.5m price (said to be agreed) was agreed as a figure, but not for all the works now needed, so could Bam have another million if you please? Bam said it had followed the rigmarole in the NEC contract for claiming compensation. ABB said it would look at it. Then, as usual, nothing much happened.
If you Do a NEC contract you must allocate a person to spend every day fathoming the rules. it’s pathetic, but you must do it and pretend this document will get you into construction heaven
Look, if you are doing a contract under NEC, you must allocate a person to spend every day, every hour, fathoming the NEC rules. Yes, I know that’s expensive, I know it’s pathetic but you must do it and keep pretending that this document will get you into construction heaven.
So, Bam reached the point where it called for an adjudicator. And it was nearly very fortunate. It got an adjudicator that was very experienced at doing adjudications, very experienced in this line of dispute and one of the few adjudicators who happily - as distinct from unhappily - takes on this difficult form of contract. And yet, and yet, despite all this, the adjudicator made a pig’s-ear of it.
The process itself was fine: the notice of adjudication was followed by the pukka appointment of the adjudicator. The referral was served, then the response, then a reply to response was served, then the rejoinder. Not to be outdone, Bam produced a surrejoinder. Then lo-and-behold ABB lobbed another rebutter … of 26-pages. At last, exactly seven days after the last shout of the parties, the adjudicator produced his decision. He awarded Bam every penny - a total of a smidgen over £1m. ABB wouldn’t pay.
They all came to the High Court. Was the adjudicator’s decision to be obeyed? No. The adjudicator decided a key issue in the adjudication, said the judge, “by reference to and in reliance upon a clause that neither party had referred to or relied upon”, and worse, “the adjudicator did not give the parties the opportunity to address him on (it)”.
That’s the sin, which is so wounding as to kill that adjudication stone dead. And that’s because we have all become convinced that something called natural justice applies to adjudication in the same way as litigation and arbitration. We believe that the type of behaviour of this adjudicator is so unfair
that it condemns the process.
Look, I know that Bam’s costs in the adjudication were £84,777.96. I don’t know ABB’s costs, but take it to be about the same. The adjudicator’s fee was £14,715. The parties spent a lot of money compiling and bombarding the adjudicator with stuff. When they were all done knocking the ball across the net, the adjudicator had a skinny seven days to absorb, analyse and decide.
I bet you that this experienced adjudicator didn’t have enough time, that he came at it in a rush, and they came with one hell of a lot of stuff, and he looked at the NEC rules for himself, and got on with it. I bet he “just decided” the case on what was in front of him, including the clauses in the contract.
The adjudicator made the mistake of not insisting on more time. No one can referee the match until the toing and froing stops. Come on, you adjudicators - if the parties insist on round upon round, refuse permission unless more time is given. ABB and Bam’s parrot is dead. Seven days was not enough.
Tony Bingham is a barrister and arbitrator at 3 Paper Buildings, Temple