Wales and West (‘WW’) engaged PPS to supply and construct a new gas pipeline in Wales. The majority of the works involved excavating and laying the pipeline in trenches but part of the excavations involved cutting through rock. To protect the pipeline against the rock it was wrapped in a product called Rockguard. A dispute arose over the amount of rock that PPS encountered and the pipe protection.

In February 2013, WW commenced adjudication (“Second Adjudication”) seeking declarations on PPS’ entitlement regarding the additional rock encountered. PPS sought declarations regarding the amount of additional Rockguard it had installed. WW said that the dispute referred to adjudication was limited to the amount of rock encountered and so the adjudicator did not have jurisdiction to deal with Rockgaurd. PSS argued that WW’s Notice of Adjudication was drafted wide enough to encompass its Rockguard claim. The adjudicator agreed with PPS and decided that it was entitled to an appropriate project manager’s instruction (‘PMI’) for the amount of Rockguard installed.

WW did not commence proceedings challenging the award nor did it issue a PMI in accordance with it. Therefore, in October 2013 PPS commenced a third adjudication (“Third Adjudication”) regarding its financial entitlement for the amount of Rockguard installed. PPS referred to the award in the Second Adjudication. The same adjudicator was appointed. WW maintained that the adjudicator had exceeded his jurisdiction in the Second Adjudication by dealing with Rockguard and so did not have jurisdiction in the Third Adjudication. However, despite that reservation WW participated in the Third Adjudication and argued on the merits. The adjudicator again decided that he had jurisdiction and awarded PPS some £480,000.

WW paid the award soon after and commenced arbitration proceedings essentially on whether PPS had any entitlement regarding Rockguard. WW did both without reservation. WW also commenced Part 8 proceedings seeking declarations that the adjudicator had exceeded his jurisdiction in the Second Adjudication which was therefore unenforceable and, consequently, the decision in the Third Adjudication was also unenforceable.

PPS argued that the dispute referred in the Second Adjudication was wide enough to encompass PPS’ Rockguard claim so the decision in the Second Adjudication was enforceable and therefore the decision in the Third Adjudication also was enforceable. Alternatively, even if the adjudicator in the Second Adjudication did not have jurisdiction, he still had jurisdiction in the Third Adjudication. Alternatively, WW had elected to accept the validity of the Third Adjudication by paying the sums awarded and by commencing arbitration proceedings without reservation.

The Judge decided that:

(i) The dispute referred in the Second Adjudication was wide enough encompass Rockguard and so the adjudicator had jurisdiction. Accordingly, there could be no challenge to the decision in the Third Adjudication.
(ii) Even if that was incorrect and the adjudicator did not have jurisdiction in the Second Adjudication, he had jurisdiction in the Third Adjudication and so the decision in the Third Adjudication was enforceable.
(iii) Even if both these findings were incorrect, by paying the sums awarded without reservation WW had elected to accept the decision in the Third Adjudication as valid and enforceable. However, obiter, WW’s commencement of arbitration proceedings did not amount to an election.