| Date | 14 January 2004 |
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| Judgment | London and Amsterdam Properties Ltd v Waterman Partnership Ltd, TCC 18 December 2003 |
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| The Issue | The meaning of dispute in adjudication and the concept of 'evidential ambush'. |
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| Implication |
Whilst an adjudicator may have jurisdiction to deal with a dispute which has not been properly documented between the parties prior to the adjudication, it will be a breach of natural justice for the adjudicator to take into account fresh documentation which the responding party cannot be given appropriate time to deal with. |
printIn late 1998 London and Amsterdam Properties commenced a construction project to develop Midsummer Place Shopping Centre in Milton Keynes. It entered into a professional appointment with Waterman Partnership who agreed to act as structural and civil engineers in relation to the project. The works did not run smoothly and claims for additional costs were made by certain package contractors. London and Amsterdam contended that certain parts of those costs were incurred as a consequence of Waterman's failure to perform its contractual obligations. In particular it claimed that Waterman had failed to release substantial elements of steelwork design information by set dates which had caused critical delays to the steelwork package contractor. As a result, London and Amsterdam maintained that it had to pay the steelwork contractor an additional £1.3 million and claimed those monies from Waterman. Waterman denied liability and confirmed that it had given a firm commitment to meet the programme only on the condition that the design by others would be frozen and provided to them in advance of the agreed dates. This condition had not been met and that was the sole reason why its design information had been provided late. Letters were exchanged between the parties and throughout Waterman complained that it did not have sufficient particulars to deal with the claim being made against it. Waterman asked London and Amsterdam to identify what elements of design information were allegedly issued late and how that alleged lateness had affected the agreed timetable and the slippage upon the construction programme. Waterman also requested detailed information concerning the quantum of the claim. London and Amsterdam refused to provide that information relying upon the broad assertion that it had settled with the steelwork contractor its claims for additional costs and that those costs in their entirety fell to the account of Waterman. This impasse continued until February 2003 at which point London and Amsterdam commenced adjudication proceedings. Despite Waterman's complaints to the adjudicator concerning his lack of jurisdiction and procedural unfairness in dealing with the material put forward by London and Amsterdam, the adjudicator nevertheless proceeded to make his decision ordering that Waterman should pay some £700,000 to London and Amsterdam. The matter then progressed to an enforcement application to the court where it was heard by His Honour Judge David Wilcox. Judge Wilcox agreed that it was surprising that London and Amsterdam had failed to provide this information. However, Judge Wilcox considered that in deciding whether a dispute existed for the purpose of adjudication he was bound by the case of Halki Shipping Corporation v Sopex Oils Ltd in which it was stated that the word 'dispute' was to be given its ordinary meaning and that it "included any claim which the other party refused to admit or did not pay, whether or not there was an answer to the claim in fact or in law". London and Amsterdam had claimed a sum of money from Waterman and although no proper particulars of that claim had been given prior to commencement of the adjudication, for the purposes of the adjudication a dispute existed. Judge Wilcox recognised that there was a risk in this approach that a party to an adjudication might be 'ambushed' by new arguments and assessments which had not featured in the dispute up to that point but which might have persuaded the party facing them to seek to obtain a settlement. He was satisfied however that the position of a respondent in such an adjudication, which may well be procedurally unfair, would be safeguarded because the court would be slow to dilute the requirements of natural justice when the referring party sought to enforce the award. He commented that a referring party who is permitted to ambush a respondent by deploying fresh arguments and using documentation held onto until the eve of the reference may have an expensive and hollow victory in the end. Whilst therefore there was a dispute embracing both the liability and quantum aspects of this large and complex claim, it was clear to Judge Wilcox that there had been what he termed an "evidential ambush". The decision to withhold the quantum evidence requested prior to the adjudication was clearly deliberate, So too was the decision to serve the considerable body of detailed new evidence at the time of the referral. According to Judge Wilcox, the adjudicator did not appear to appreciate that in accordance with the rules of natural justice he should either have excluded elements of the evidence provided for the first time in the adjudication or should have given Waterman a reasonable opportunity to deal with it. Under the applicable adjudication rules the adjudicator was unable to give Waterman additional time where London and Amsterdam refused to agree. The adjudicator should therefore have excluded that evidence. Instead he had avoided the decision as to whether or not the evidence should be admitted and had based his decision upon that evidence without giving Waterman a proper opportunity to deal with it. In Judge Wilcox's opinion that was a substantial and relevant breach of natural justice. For the purposes of part 24 of the Civil Procedure Rules, Waterman had demonstrated a substantial live and triable issue as to the adjudicator's jurisdiction based upon the adjudicator's failure to act impartially. Accordingly enforcement of the adjudicator's decision was refused.
CJ-0402
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