Dalkia Energy v Bell

PROPERTY AND CONSTRUCTION GROUP

Dalkia Energy & Technical Services Ltd v Bell Group UK Ltd
[2009] EWHC 73 (TCC)

The Housing Grants, Construction and Regeneration Act 1996 – Adjudicator’s Jurisdiction – CPR Part 8 Procedure

In a judgment delivered on 21st January 2009 on a CPR Part 8 application during an ongoing adjudication challenging the jurisdiction of the adjudicator, Coulson J gave guidance on three important issues affecting an adjudicator’s jurisdiction: (1) the circumstances in which the court will intervene to decide whether an adjudicator has jurisdiction under terms and conditions that the adjudicator has already held to be applicable to the contract between the parties; (2) whether a provision in terms and conditions that permits an adjudicator to issue his decision after the time allowed for the decision to be reached complies with the Housing Grants, Construction and Regeneration Act 1996; and (3) the effect on an adjudicator’s jurisdiction of an erroneous decision on his part as to the applicable terms and conditions.

He held that the adjudicator’s decision as to whether or not a particular set of contract conditions were incorporated was part of the dispute properly referred to him would not ordinarily be a matter with which the court could interfere on enforcement. However, where the point arises in Part 8 proceedings, where the court is being asked to give a final and binding determination on the issue, there can be no question of a want of jurisdiction on the part of the court in those circumstances and the court should not duck that issue.

Coulson J did sound a warning note: not every issue in an ongoing adjudication will be suitable to Part 8 procedure: far from it, the use of Part 8 will rarely be appropriate in an ongoing adjudication, but there may be times when an issue as to, for example, which contract conditions apply, may be suitable for decision before or at the time of the ongoing adjudication.

Coulson J also addressed the meaning of words often found in contractual adjudication provisions: “The adjudicator’s decision shall nevertheless be valid if issued after the time allowed.” He declined to follow His Honour Judge Havery QC in Aveat Heating Ltd v Jerram Falkus Construction Ltd [2007] EWHC 131 (TCC) where he held that nearly identical words in clause 38A5 of the JCT Conditions did not comply with the 1996 Act and the Scheme for Construction Contracts therefore applied. Coulson J accepted Bell’s submissions that: (1) the clause in Aveat was dealing solely with when the decision was issued – not when it was reached; (2) the difference between when a decision was reached and when it was issued to the parties was a matter that had been considered in a number of authorities; (3) the clause in Aveat and the clause in the present case merely reflected the decisions in those cases, to the effect that an adjudicator had a certain (small) amount of leeway in the issuing of his decision; and (4) Judge Harvey was wrong to say what he said in Aveat, albeit that in any event it did not affect his conclusion.

Finally, Coulson J held that even if both the adjudicator and he were wrong, and the Bell conditions were not incorporated into the contract, and he were wrong in holding that the Bell conditions complied with the 1996 Act, it would make no difference to the adjudicator’s jurisdiction. In circumstances where the parties accept that there is a written construction contract, the only issue is whether an express or implied set of adjudication provisions (i.e. the Scheme) were incorporated into the contract. Such a dispute is one which the adjudicator has the jurisdiction to determine.

Michael Black QC represented Bell Group UK Limited on the instructions of Nabarro LLP and Currie & Brown, Dubai.