Balfour was employed as an M&E subcontractor by Shepherd at a hospital. The site was split into seven zones, each containing multiple blocks. The completion date for the works provided in the subcontract was 18 February 2008. The subcontract works were completed by Balfour on 10 June 2008, following which Shepherd deducted LADs and prolongation costs from Balfour.

In September 2008, Balfour launched the first adjudication seeking an extension of time (“EOT”) for delayed access to Block Z. The first adjudicator rejected Balfour’s claim largely because it was put forward on a prospective basis, looking forward from the date when the delayed access became known, rather than a retrospective basis, looking at how events had actually unfolded.

Following this decision, in December 2008, Balfour issued to Shepherd a retrospective analysis based on a wider range of delays to the contract works (the “December Submission”). The December submission sought to argue that Balfour was entitled to an EOT of 16 weeks and 2 days.

In April 2009, Balfour commenced the second adjudication seeking an EOT of 16 weeks and 2 days. The substantiation for this was based largely on the December submission. Shepherd’s response included an expert report.

During the second adjudication there was an issue over the production of documents. The solicitors for Balfour wrote requesting, what the Judge described as a “wish list” of documents. Shepherd refused to disclose the documents, and in correspondence the adjudicator indicated this could be seen in a negative manner.

On 2 July 2009, the adjudicator issued his decision, awarding Balfour a 16 week and 2 day EOT and £1,158,645.34 excluding VAT plus interest of £61,254.94 for the wrongfully deducted LADs and prolongation costs. The adjudicator made particular mention of Shepherd’s Expert’s report, stating that although the author was held in high regard, he did not have sufficient instructions upon which to act and accordingly the report suffered from a lack of credibility.

Shepherd didn’t pay the awarded sum and resisted enforcement on the following six grounds:

1. Was the adjudicator's decision responsive to the dispute referred to him?
   The adjudicator had answered the dispute referred to him. Shepherd’s argument had been that Balfour had referred the dispute on the basis of an extension of time on a block by block basis, but that the second adjudicator had awarded the EOT of a site wide basis. The Judge decided that due to the way the arguments had evolved throughout the response and the reply, the adjudicator was entitled to decide as he did.
   Shepherd had a secondary argument within this point, that the decision was based on a prospective analysis, but the Judge disagreed stating that the second adjudicator made the decision on retrospective terms, but made non-binding comments on a prospective basis.
2. Did the adjudicator materially decide something which had effectively been addressed and resolved by the first adjudicator, namely the Block Z access delay?
   The Judge dismissed this argument on the basis that, regardless of whether the adjudicator said expressly that he excluded the Block Z issue, he was entitled to make a decision on Block Z, and all the other causes of delay, on a retrospective basis. This differed from the claim in the first adjudication which was on a prospective basis.
3. Did the adjudicator materially decide other matters in his decision contrary to what had been decided in the first adjudication?
   Shepherd argued that Balfour should not have been permitted to enforce the adjudicator’s decision because it had been procured by its breach of contract in failing to acknowledge that the first adjudication decision was binding and to give effect it. Whilst there were three specific factual queries that were dismissed, the Judge concluded that:
   “I do not consider that it is a breach of contract simply to argue in a later adjudication something which is inconsistent with a decision from an earlier adjudication; even if there is a breach of contract, it is immaterial and non-causative of anything if the later adjudicator does not as such decide the later adjudication in a way which is inconsistent with the earlier decision”
4. Did the second adjudicator act contrary to the rules of natural justice in making an adverse inference in relation to the non-production of documents by Shepherd? There was a sub-issue as to whether he did make such an inference.
   The Judge decided that the Adjudicator had not acted against the rules of natural justice in making an adverse inference against Shepherd for non-production of documents, for three reasons:
   (i) Adjudicators are not bound by the rules of evidence applicable in courts in this country and as such an adjudicator could draw such an inference and not then be subject to criticism for doing so;
   (ii) In many adjudications an adjudicator might feel it necessary to give advance notice of the possibility of drawing such an adverse inference. That is what the adjudicator did in this case and the court thought he could not therefore be subject to criticism if he then did draw such an inference; and
   (iii) On the facts, the decision was not affected by an adverse inference being drawn.
   The Judge also found that in this case he didn’t believe an adverse inference had actually been drawn by the adjudicator.
5. In relation to his findings about Shepherd’s expert, did the Adjudicator act in a biased way?
   The Judge found that the adjudicator did not act in a bias manner towards Shepherd’s expert. He had considered on what basis Shepherd had instructed the expert and then went on to comment on the credibility of the report in light of those instructions.
6. Given that this was to be a reasoned decision, due to the idiosyncratic style, was it a, or a sufficiently, reasoned decision?
   Whilst the judge criticised the style and grammar of the adjudicator’s decision he considered it sufficiently well reasoned for the parties to understand. The Judge also criticised Shepherd for bringing this particular challenge, and commented that:
   “I remain unconvinced in terms of the policy of the HGCRA that challenges on this type of basis are appropriate. Whilst it is always legitimate to challenge an adjudicator's decision on the grounds of the absence of reasoning, I am sure that the legislators would not have had in mind a challenge on the basis that some arguably logical link in the chain of reasoning was missing from the decision. Provided that the broad thrust of the reasoning is provided, the Court should enforce.”

Accordingly, the decision was enforced.