Can an adjudicator deal with more than one dispute at the same time?

Deluxe Art & Theme Limited v Beck Interiors Limited [2016] EWHC 238 (TCC)

Beck Interiors Limited (Beck) engaged Deluxe Art & Theme Limited (Deluxe) as its subcontractor. There were three adjudications between the parties, all started by Deluxe against Beck.

In adjudication 1 the adjudicator awarded sums to Deluxe for variations and acceleration costs. The amount awarded was paid by Beck.

In adjudication 2 the same adjudicator awarded Deluxe monies for loss and expense due to prolongation and an extension of time.

Whilst adjudication 2 was still ongoing, and before the Adjudicator issued his decision, Deluxe started adjudication 3 which related to retention.

Beck objected to the Adjudicator dealing with adjudication 2 and adjudication 3 at the same time.

The Adjudicator did not accept Beck’s objection, and issued his decision in adjudication 3 ordering that Beck pay monies to Deluxe.

Beck refused to pay the monies ordered in adjudication 2 and adjudication 3. Beck’s position was that the Adjudicator did not have jurisdiction to decide adjudications 2 and 3 at the same time and as such (so Beck argued) the Adjudicator’s decisions in both of these adjudications were invalid.

Deluxe commenced enforcement proceedings in the Technology and Construction Court (TCC).
Paragraph 8 of the Scheme

The general rule is that an adjudicator only has jurisdiction to deal with a single dispute at any one time. However the Scheme for Construction Contracts 1998 (the Scheme) provides at paragraph 8 of Part 1 that an Adjudicator may, with the consent of all the parties to those disputes, adjudicate at the same time on more than one dispute under the same contract.

The TCC held that the Adjudicator did not have jurisdiction to decide two adjudications at the same time here because Beck had not given their consent.

However the Adjudicator had jurisdiction to decide adjudication 2 because at the time that he was appointed in respect of adjudication 2 no other adjudication was ongoing between the parties (because adjudication 1 had finished and adjudication 3 had not yet been commenced). This meant that the Adjudicator’s decision in adjudication 2 was valid and enforceable.

Conversely, at the time of the Adjudicator’s appointment in adjudication 3, adjudication 2 was already ongoing, and as such the Adjudicator did not have jurisdiction to determine the dispute referred in adjudication 3.

The TCC therefore declined to enforce the Adjudicator’s decision in respect of adjudication 3.

Beck was only required to pay to Deluxe the sum awarded to Deluxe in adjudication 2.
Comment

Where the Scheme applies, it is important to obtain the consent of all of the parties before seeking to commence two adjudications at the same time or a single adjudication covering two separate disputes. If not, the adjudicator’s decisions could be unenforceable.

This article was written and published on the internet by Walker Morris in April 2016.

This article is intended to provide general information about legal topics. Nothing in this article or in the documents available through it, is intended to provide legal advice. You should not rely on any information contained in this article, or in the documents available through it, as if it were legal advice.

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