ABB engaged Bam under a subcontract to carry out electrical works on a major power upgrade to part of the London Underground network. The subcontract required Bam to carry out certain survey and design works. Clause 11.1A of the subcontract provided that there was to be no alterations or amendments to the subcontract unless expressly recorded in writing by a document expressed to be supplemental to the subcontract and signed by the parties.

Bam submitted its first quotation for its survey and design work in October 2010 and the parties met in December 2010 and reached a verbal agreement on it. However, the parties subsequently disagreed over the scope of the agreement.

Bam referred the dispute over unpaid design fees to adjudication. Part of the relief claimed by Bam was a declaration as to the scope of the parties’ agreement in December 2010 or, alternatively, that the parties had not reached a binding agreement on the scope. The parties exchanged numerous submissions and the adjudicator decided the amount due to Bam as £973,432 plus interest and VAT. The adjudicator also decided that no binding agreement had been reached on the scope - his reasoning was based on clause 11.1A which neither party argued or mentioned to him and which he did not refer to the parties before issuing his decision.

ABB commenced Part 8 proceedings seeking a declaration that the adjudicator had breached the rules of natural justice by relying upon clause 11.1A and so his decision was invalid. Bam commenced its own enforcement proceedings.

The judge held that the adjudicator’s decision should not be enforced on the basis that there had been a material breach of the rules of natural justice. The judge noted that if a point or argument occurs to a judge, arbitrator or adjudicator that has not been mentioned by the parties, the appropriate course of action is for the tribunal to raise it with the parties and invite comment, argument and/or evidence. A failure to do this constituted a failure in the process. From his decision it was clear that the adjudicator attached importance to the impact of clause 11.1A – this meant that by relying on clause 11.1A the adjudicator had committed a material breach of the rules of natural justice.