Adjudication: What if a party does not want to go ahead with the nominated adjudicator?

Citation: Lanes Group Plc v Galliford Try Infrastructure Ltd [2011] EWHC 1035 (TCC)

Keywords: Adjudication, Construction Contract HGCRA 1996, Repudiation

The Facts

GTI (D) was the main contractor engaged to carry out refurbishment works at a train maintenance depot.  GTI engaged LGP (C) as sub-contractor for certain roofing and glazing works.  Disputes arose between them and the relationship broke down in about April 2009 with each party blaming the other for the termination and repudiation of the Sub-Contract.  D employed others to complete the project in 2010; C pursued adjudication against D in December 2009. 

In November 2010 C issued proceedings against D claiming damages for wrongful termination.  Proceedings were stayed to arbitration by agreement.  In December 2010, D sent C a Notice of Adjudication seeking a declaration that it had lawfully determined C’s employment under the Sub-Contract or that C had repudiated the Sub-Contract. C protested that the adjudicator appointed by ICE would not have jurisdiction as he had adjudicated on a previous dispute between the parties and would be biased against C.  Another adjudicator was appointed by ICE and this time D opposed his appointment as he had misunderstood D’s submissions in a previous adjudication.  ICE would not appoint another adjudicator.  C then asserted that as D did not serve its statement of case under clause 4.1 of the ICE Adjudication procedure it was a repudiatory breach of the adjudication agreement. The adjudicator wrote to ICE and, following a new Notice of Adjudication by D, ICE appointed another adjudicator. Part 8 proceedings were issued by C seeking an injunction to restrain D from “continuing or making further applications to adjudicate a particular dispute.”  D argued that it had a statutory right to adjudication under s 108 (1) HGCRA which entitles a party “to refer a dispute arising under the contract for adjudication.”

Held (Akenhead J)

The reasoning behind s 108 (5) makes the concept of repudiation of an adjudication agreement within a construction contract difficult to comprehend because the statute provides each party to the contract an unqualified right to refer a dispute to adjudication at any time.  The party cannot lose its right to adjudicate by in some way repudiating the agreement and the concept of repudiation does not apply to statutory rights.  Repudiation of a contract applies to the contract as a whole and one cannot accept repudiation in a partial way.  

There was a breach of the agreement by D as the parties agreed by Clause 18B (1) that the adjudication was to be conducted under the ICE Adjudication Procedure.  This procedure required D to send to the adjudicator its referral documentation within 2 days of the adjudicator’s appointment.  There is a lacuna in the HGCRA that allows a referring party, time and again, if it did not like the adjudicator nominated, to withhold service of the referral documentation so that the adjudication lapses, thus enabling it to seek a nomination which it does like.