Whessoe-Volker, as a joint venture, engaged Cleveland Bridge to carry out works at a Liquefied Natural Gas terminal at Milford Haven. There was a dispute over the final account owing to Cleveland Bridge, which had been agreed, but £317,500 plus VAT of which was outstanding. However, Whessoe-Volker had entered into a settlement agreement whereby it argued that it did not, nor did either joint venture partner, owe the outstanding sum to Cleveland Bridge. Cleveland Bridge referred the dispute to adjudication and was awarded the full amount.

At enforcement, the judge had to determine (i) whether the work carried out, consisted of construction operations under s105(1) of the Act, and whether any of the work was excluded under s105(2); and (ii) if the works did consist of construction operations and excluded operations, was the Adjudicator’s decision severable and/or enforceable?

The judge decided that the work carried out consisted of both construction operations and excluded operations. Whilst it was agreed that the work was carried out at a site where the primary activity was the production, transmission, processing or bulk storage of gas, the works involved erecting steelwork which was to form an integral part of the plant. Whessoe-Volker had argued that the erection of the steelwork must also include the manufacture and supply of that steelwork, whereas Cleveland Bridge had argued that it was only the act of erecting the steelwork which was excluded under s105(2)(c).

The judge carefully considered the meaning of the word ‘erection’ in s105(2)(c). He decided that he should give it a narrow interpretation, in favour of Cleveland Bridge, so that the meaning of erection could not include the manufacture and supply of the steelwork; it was only the act of erecting the steelwork which fell within the exclusion.

On the second issue, the Adjudicator’s decision was not enforceable. The judge held that where only one dispute was referred to an Adjudicator, which included both construction operations and excluded operations, and the Adjudicator decided the whole of the dispute, then the decision would not be valid. The judge said, at paragraph 110:

“If the Adjudicator had made a decision on the whole dispute but had also made a decision which dealt only with the part of the dispute which was within her jurisdiction then, in my judgment, the decision on the whole dispute would not be enforceable or valid but there would be a valid decision on the part of the dispute which was within her jurisdiction.”

Accordingly the decision was not enforced.

The judge also considered that, as the decision related to the whole sum of £317,500, the court could not or should not intervene and say what the Adjudicator may have found to be the value of the work relating to the element of the subcontract within his jurisdiction. Therefore, the decision was not severable.