Adjudicator ‘no jurisdiction’ in £1.6M dispute

Posted: 2nd December 2014

Underground2Many find adjudication a swift and cost-effective means of settling contract disputes. However, in one striking case, an adjudicator’s decision in a dispute relating to the installation of communications equipment on the London tube merely served to fire the starting gun on lengthy and expensive litigation.

Company A had sub-contracted company B to carry out installation work. Relations between the parties were troubled by claims of delay and disruption and company A ultimately sought to dispense with company B’s services. The latter submitted the dispute to an adjudicator, who awarded it more than £1.6 million.

Company B asked the High Court to grant summary judgment, enforcing the award. However, in rejecting that application, the Court found that company A had ‘real prospects’ of establishing that the adjudicator – who was appointed by the Royal Institution of Chartered Surveyors – had lacked jurisdiction to resolve the dispute.

Company A had put forward ‘a sufficiently strong case’ that the adjudicator was not properly appointed due to a fraudulent misrepresentation by those acting on behalf of company B. Company A also had a strong argument that the adjudicator had trespassed into areas of dispute – particularly in relation to the value of the claim – which had already been ruled upon following an earlier adjudication.