Adjudicator did not breach natural justice

Posted: 23rd September 2013

In the context of an acrimonious building dispute, the High Court has emphasised that adjudicators faced by complex legal arguments should not have their decisions subjected to minute examination by judges and that challenges to their decisions on fairness grounds should be treated with ‘healthy scepticism’.

Building siteThe main contractor on a project to refurbish a large block of flats had engaged a sub-contractor to carry out internal works on kitchens and bathrooms. The parties’ relationship was, however, marked by disputes over money which culminated in the sub-contractor ceasing work prior to completion.

The sub-contractor argued that there had been a mutually agreed termination of the contract, that it was under no obligation to complete the works and that it was entitled to be paid appropriately for the work that it had performed. However, the main contractor insisted that it had accepted the sub-contractor’s effective repudiation of the contract.

The main contractor argued that it had overpaid the sub-contractor by £184,000. However, the dispute was referred to an adjudicator who upheld the sub-contractor’s arguments and ruled that it was entitled to be paid a further £187,720 for the work it had carried out on the project.

In challenging that decision, the main contractor argued that the adjudicator had breached the rules of natural justice in purporting to resolve the dispute on the basis of arguments that had not been placed before him and to which it had been given no opportunity to respond.

Directing enforcement of the adjudicator’s decision, however, the Court noted arguments that the contractor had, in fact, ‘pointed the adjudicator in the direction down which he actually went’. The rules of natural justice had to be seen in the context of the often complex issues of law tackled by adjudicators and it was inappropriate to subject the relevant decision to minute analysis.

The burden of establishing that the adjudicator had exceeded his jurisdiction or acted unfairly lay upon the contractor and it was right that the Court should maintain a healthy scepticism in respect of challenges brought on natural justice grounds.