Atkins Rail was a main contractor and subcontracted civil engineering works to Geoffrey Osborne to construct certain civil engineering works associated with the main contract.

The dispute surrounded sums owed to Geoffrey Osborne in respect of two items: ground investigations carried out by Geoffrey Osborne; and variations in connection with the construction of a signal control centre. The Adjudicator assessed the value of these items, but in doing so neglected to deduct the amounts already paid by Atkins Rail to Geoffrey Osborne in respect of those items. Atkins Rail invited the Adjudicator to correct his mistake under the slip rule which he declined to do. It was common ground that the Adjudicator had made a mistake.

Atkins Rail issued Part 8 proceedings to set aside the decision. Geoffrey Osborne applied to enforce the decision. Geoffrey Osborne submitted that Atkins Rail’s proceedings were inappropriate unless they were being used to determine the whole of a dispute, rather than part of one, as in this case. The judge stated that the Court could reach a final decision on a question decided by an Adjudicator, provided the court was not being asked to decide on a substantial dispute of fact. It was permissible for the court to sever part of an Adjudicator’s decision that was amenable to Part 8 proceedings and determine that issue:

“If there is part of an Adjudicator’s decision that can be isolated and determined by the court, then it seems, if the court considers it just and expedient for the court to do so, such a course would give effect to the overriding objective of the CPR.”

Turning to the application itself, the judge considered the terms of the sub-contract, the Notice of Adjudication and the Railtrack PLC Adjudication Rules (to which the adjudication was subjected). The judge stated:

1. That under its sub-contract Geoffrey Osborne was only entitled to payment of an amount stated in a payment certificate;
2. The Adjudication Rules provided that the Adjudicator is to reflect “the legal entitlement of the parties” and to decide that a party to the dispute is liable to make payment “under the contract”;
3. The Notice of Adjudication was written in terms that Geoffrey Osborne was not intending to ask the Adjudicator to order Atkins Rail to pay the total value of the ground investigations and the variations for the signal control centre, without deducting the amounts already included in Interim Certificate 35; and
4. That the Adjudicator had jurisdiction to make the decision, as the wording of the notice of adjudication and the referral notice, allowed the Adjudicator to award the amount requested by Geoffrey Osborne, or “such other sum as the Adjudicator thinks fit”. The fact that the Adjudicator was wrong did not mean that he lacked jurisdiction.

Therefore, in not taking into consideration the sums previously certified for these two items, the Adjudicator’s decision did not reflect the legal entitlement of the parties under the contract. The Adjudicator was therefore wrong in law to order Atkins Rail to make a payment without taking account of sums already paid for these items. As Atkins Rail had pleaded that the Adjudicator was wrong in law on this specific point, the judge decided it was entitled to a declaration to that effect.

The judge’s declaration in Atkins Rail’s favour, however, did not change the position on costs. The Adjudicator had the jurisdiction to make a costs order. Even though it may have been the case that, had the Adjudicator not concluded that such a large amount was owed to Geoffrey Osborne, there may have been a different costs order, this was not obvious that he would have done so.