There would be very little point in submitting disputes to contract adjudicators if their decisions were not binding and treated as final. As a High Court ruling emphasised, however, their jurisdiction is not unlimited and, save where otherwise agreed, they only have the power to consider disputes arising under one contract at a time.
A construction company entered into a subcontract with a property company under which it performed renovation works on empty local authority-owned dwellings. Over a period of about a year after the contract was created, various negotiations took place which resulted in changes to the terms originally agreed.
After a dispute developed in respect of sums due under the subcontract, the matter was referred to an adjudicator who directed the property company to pay £307,357 to the construction company. The former challenged that outcome on the basis that the dispute concerned not just one, but at least four contracts and that the adjudicator thus lacked jurisdiction to consider the matter.
Ruling on the case, the Court noted that, although there can be an adjudication reference of multiple disputes under the same contract, an adjudicator does not, absent the agreement of all sides, have jurisdiction to determine disputes under multiple contracts. The matter thus hinged on whether there was one contact between the two companies, or several.
Email strings and other documents strongly indicated that there was a single contract and the Court found that the property company had no real prospect of successfully arguing otherwise. Exchanges and dealings that followed completion of the contract served to vary its terms rather than to create a series of free-standing contracts.
Observing that that conclusion made commercial common sense, the Court found that the adjudicator had jurisdiction to make the binding and unchallengeable decision he did. The construction company was awarded summary judgment in the full amount of the adjudicator's award.
For advice on any contractual matter, please contact Roy Colaba r.colaba@sydneymitchell.co.uk 0808 166 8827
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