| Date | 5 April 2000 |
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| Judgment | Atlas Ceiling & Partition Company Limited -v- Crowngate Estates (Cheltenham) Limited. |
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| The Issue | Enforcement of adjudicator's decisions. |
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| Implication |
Consideration of the options available to deal with the contested jurisdiction of an adjudicator. |
printAt present the reported cases concerning the enforcement of the decisions of adjudicators point to one conclusion. Enforcement will be given unless it can be shown by the opposing party that the adjudicator lacked the necessary jurisdiction to make his decision. The approach normally taken by adjudicators when there is a challenge to their jurisdiction will be to investigate the contentions being made and if in their view the challenge is unjustified, they will proceed with the adjudication. This is not to say, however, that the adjudicator is empowered to decide the matter of his jurisdiction. He may proceed according to his own findings but it leaves the parties free to continue their challenge to the jurisdiction if they so wish. A party opposing jurisdiction has a number of options it might take. First and foremost, if the adjudicator elects to proceed with the adjudication, the opposing party must continue to declare its opposition to the jurisdiction as it will not wish its participation in the adjudication process, by for example submitting a case in defence to the adjudicator, to be seen as an acceptance of the jurisdiction point. That party may choose to wait until the adjudicator's decision is made, refuse to comply with the decision, and then oppose any enforcement proceedings on the basis that the adjudicator lacked jurisdiction. Alternatively it is possible for either party to obtain a binding ruling upon the question of jurisdiction concurrently with the adjudicator dealing with the substantive issues. In Palmers Limited -v- ABB Power Construction Limited a declaration on the matter of whether the adjudicator had the necessary jurisdiction was obtained from the Technology and Construction Court in a few days and whilst the adjudication was proceeding. Another alternative, if the construction contract contains an arbitration clause, is for the parties to seek a decision upon the adjudicator's jurisdiction by reference to an arbitrator. Parties who immediately think that this would result in a 12-18 month delay to the process, based upon their hard bitten past experience of arbitration need not worry. The Dispute Resolution Service of the Royal Institution of Chartered Surveyors is offering an arbitral appointment procedure to deal with such matters with a promise that an award upon the matter of jurisdiction of an adjudicator can be made within 48 hours of the appointment of the arbitrator under its scheme. This may be regarded as an extremely cost effective approach to take. The primary area of challenge to jurisdiction will concern the existence of the underlying contract or the date by which that contract may be said to have come into force. In the construction industry we tend to allow the most appalling uncertainty and confusion to surround the procurement process and disputes over the existence of a contract are commonplace. Since the Act can only apply to written contracts made after the 1st May 1998 it is no surprise that this remains a fertile area for dispute. It is common practice for works to commence on the basis of a loose agreement embodied within a letter of intent, where formal contract documentation is concluded at a later date. Where the commencement date preceeds 1st May 1998 and the formal contract is put in place after that date, doubts can arise. In the 1963 case of Trollope & Colls -v- Atomic Power Constructions Limited it was held that the contract, once made, would have retrospective effect to govern the relationships of the parties prior to that date. In such a case however, the contract would nevertheless be made after the 1st May 1998 and its retrospective effect would not alter its status in respect of the Construction Act. Even where it could be said that the earlier letter of intent was itself a contract having a full and binding effect between the parties, the later contract may be regarded as superseding that earlier arrangement and thus the Construction Act would still bite in respect of any disputes then arising. Some of these matters were recently examined in the case between Atlas Ceiling & Partition Company Limited -v- Crowngate Estates (Cheltenham) Limited where an adjudicator's decision was resisted upon enforcement on the basis that the contract predated the 1st May 1998. Atlas brought evidence to show that despite having agreed articles of agreement relative to a DOM/2 sub-contract in April 1998, there was evidence to show that the parties had not intended to enter into legal relations until agreement on further points had been made. Judge Thornton agreed with this contention, held that the adjudicator had the necessary jurisdiction, and ordered that judgment be given for the sum found by the adjudicator to be due. The approach of Judge Thornton was however remarkable. He ordered that the summary judgment application be transformed into a trial of the issue of the adjudicator's jurisdiction in open court, including the cross-examination of the parties' witnesses. The speed in which this was able to happen was also remarkable. The parties had their answer within 18 days of the commencement of the proceedings. Two years ago this would have been thought of as justice at the speed of light.
CJ-0013
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