RBG was engaged by SGL to carry out works at SGL’s premises. The contract was an amended NEC 3 Engineering and Construction Contract June 2005 Option C. RBG referred a dispute to adjudication relating to its entitlement to a change to the Completion Date and to be paid the sums identified in five invoices. The Adjudicator decided in favour of RBG, but SGL declined to pay the amount awarded.

SGL contended that the Adjudicator’s decision should be set aside as he had failed to exhaust his jurisdiction or because he had acted in breach of natural justice as he had failed to hear both parties. SGL stated that the Adjudicator had failed to consider all the evidence and had misconstrued the extent of the dispute between the parties, thereby unjustifiably restricting the material he considered. The Adjudicator could not determine the extent of his own jurisdiction and unless he decided all issues referred to him, he failed to exhaust his reference and his decision should be void as if he had exceeded his jurisdiction.

SGL stated that the Adjudicator’s jurisdiction was to determine what sum RBG was entitled to be paid under the contract; i.e. he was obliged to consider any overpayments that had previously been paid to RBG to determine what was properly due. The Adjudicator did not consider the issue of overpayments as he considered it outside his jurisdiction.

RBG’s case was that the Adjudicator was being asked to look at the five invoices in question and not any overpayments. He had had regard to the previous overpayments, but considered that evidence irrelevant. If this were an error, then the Court could not correct his decision as he had merely answered the right question incorrectly.

The judge refused to enforce the Adjudicator’s decision. The Adjudicator himself had rejected RBG’s submission that once agreed, the price for work done to date was fixed and could not be revisited; but as a result of this conclusion, in order properly to answer the dispute referred to him he was required to revisit the PWDD and consider any overpayments.

The judge stated:

“The Adjudicator had power to, and was bound to, consider the evidence and submissions of the defender relating to alleged earlier overpayment. He could not properly answer the question put to him regarding the pursuer’s entitlement to be paid in terms of these invoices unless he did so.”

The Adjudicator had, in fact, considered overpayments in some respects (i.e. sums due for site labour and welding equipment) and so he understood that his jurisdiction empowered him to consider overpayments. Having not done so in regard to other overpayments meant that the Adjudicator had failed to exhaust his jurisdiction as a result of his misconstruction of his remit, rather than a breach of natural justice.