The Claimant, Essential Living (Greenwich) Limited, was in dispute with the Defendant, Conneely Facades Limited, regarding a defective brick slip cladding system which the Defendant had designed and installed. The Claimant referred the dispute to adjudication, seeking recovery of circa £1 million.
In the preliminary stages of the adjudication, the Defendant sought disclosure of a previous adjudication decision involving the Claimant. The Defendant asserted that this decision would demonstrate that the façade defects in dispute were attributable to breaches of contract by other parties and therefore that the Claimant was seeking a double recovery of costs. The adjudicator rejected the application, dismissing the suggestion of double recovery as “fanciful”.
The adjudicator granted a further disclosure request by the Defendant on much narrower terms but ultimately found in favour of the Claimant. The Defendant refused to comply with this decision, stating that the adjudicator’s rejection of its initial disclosure request was a premature determination of the strength of its case, constituting predetermination and thus, bias.
Enforcement proceedings were brought before the TCC, requiring Judge Adrian Williamson KC to consider whether the alleged pre-determination bias was a material breach of the rules of natural justice.
Where an adjudicator is found to have materially breached the rules of natural justice, for example by pre-determining the critical issues in dispute or being biased towards one party, the TCC will not enforce their decision.
To determine whether the adjudicator had been biased, the TCC applied the legal test established in Helow v Secretary of State, asking whether the “fair minded and informed observer” having considered the facts at hand “would conclude that there was a real possibility” of bias.
Applying the test in the context of “rough and temporary justice,” the TCC found the adjudicator’s disposal of the disclosure application to be “perfectly appropriate.” Not only had the adjudicator provided the Defendant with clear reasons for the rejection he also later acceded in part to its requests, giving it “every opportunity” to proceed with its case. The adjudicator had not predetermined any substantive or procedural points.
As the adjudicator had left the door “fully ajar” for the Defendant’s submissions, their subsequent attack on his decision was deemed by the Court to be both “unmeritorious” and “wholly inappropriate”.
Further, the TCC agreed with the Claimant that the Defendant had waived their natural justice objection when they had paid the adjudicator’s fees without reservation. The TCC observed that the Defendant had previously called upon the Adjudicator to resign and, if they intend to insist upon this, should have maintained that objection when making payment of the fee.
This case highlights the TCC’s lack of appetite for unjustified challenges to adjudication enforcement proceedings. The TCC judgment echoes Lord Sandison’s recent decision in ATG Services (Scotland) Ltd v Ogilvie Construction Ltd [2024] CSOH 94, as discussed in our recent blog post (Court warns against “frivolous” challenges to adjudication decisions), demonstrating a united perspective across the UK Courts. It also underlines the importance of parties maintaining and repeating their reservations in respect of the process and/or the adjudicator at every stage, including when making payment.
From more information, please contact Kate Ross, Solicitor: kro@bto.co.uk / 0141 221 8012 or Rachel Gold: rgo@bto.co.uk / 0141 221 8012.
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