Serving the adjudicator's decision within time limits and whether the decision is in breach of natural justice

Posted by Richard Wade on
(KNN Colburn LLP v GD City Holdings Ltd [2013] EWHC 2879(TCC))

A recent decision in the Technology and Construction Court considered the appropriate time limits for serving an adjudicator's decision and the circumstances under which a breach of the rules of natural justice would occur.

The material facts of the adjudication can be summarised as follows:

  • on 31 January 2013, the employer emailed a copy of the referral notice to the adjudicator, who acknowledged receipt and indicated that instructions will follow upon receipt of the supporting documents. The supporting documents were received in hard copy on 1 February 2013.
  • on 1 February 2013, the adjudicator issued his directions, indicating that his decision will be issued in 28 days, on 1 March 2013.
  • during the adjudication process, the contractor challenged the adjudicator's jurisdiction arguing that the dispute had been dealt with by a previous adjudicator, and raised allegations of bias and breach of natural justice, arguing that the adjudicator failed to consider a material line of defence and his decision would be unenforceable.
  • both parties complied with the adjudicator's timetable and decision was issued on 1 March 2013. The contractor challenged the decision alleging that it should have been issued on 28 February (28 days following receipt of the referral notice via email), rather than on 1 March (28 days following receipt of the supporting documents).

Sitting in the Technology and Construction Court, Mr Justice Stuart-Smith rejected the challenge and made the following observations:

  • the document received by the adjudicator on 31 January via email was in a form appropriate for a referral notice as defined in para 7(1) of the Scheme for Construction Contracts (England and Wales) Regulations 1998, and allowed for the nature of the dispute to be identified without reference to the supporting documents. However, the contractor had acquiesced in the adjudicator's timetable, which indicated that his decision would be issued on 1 March, by participating fully in the process. The decision was therefore not issued too late.
  • an inadvertent failure to consider one of a number of issues will not usually render an adjudicator's decision unenforceable, unless it is so material that it would have a significant effect on the overall result. This was not the case based on the facts and the decision was therefore enforceable.

This case emphasises the importance of ensuring that adjudication timetables are strictly adhered to. However, as noted by the court, it is not open to the parties to "attempt to spring a procedural trap without any prior warning" (para 32) and raising an argument once the decision has been issued may be too late. The case also reinforces the principles of natural justice in the context of adjudication, namely that any breach of natural justice must be material to render a decision unenforceable. 

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Richard heads Blake Morgan's Construction group. Specialising in construction law, Richard’s practice combines both non-contentious work and dispute resolution.

Richard Wade
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