Carillion and SP Power entered into a framework agreement for Carillion to carry out excavation, backfilling and reinstatement works relating to electricity cables. A dispute arose which Carillion successfully referred to adjudication.

At enforcement, SP Power argued:

1. The Adjudicator had breached the rules of natural justice in the method he adopted to quantify Carillion’s claim: the Adjudicator had not adopted the method of quantification that Carillion had put forward but used his own experience of what would constitute reasonable commercial rates and made an assumption regarding additional equipment. The Adjudicator had not given the parties an opportunity to consider and comment on his proposed methodology and the material on which it was based;
2. If the Court agreed the Adjudicator had breached the rules of natural justice, the Court should sever the offending part of the decision which related to the uplift of the rates.

The Judge found that the Adjudicator did not breach of the rules of natural justice when he formed a view regarding the amount of equipment required. The Adjudicator had considered material provided by Carillion and applied his own knowledge and experience to assess Carillion’s claim. However, the Adjudicator did breach the rules of natural justice when applying the commercial rates which, on the basis of his experience, he considered reasonable, but about which there did not appear to have been any evidence. This calculation was a material, and not peripheral or insignificant, part of his decision. By failing to give the parties notice of his proposed commercial rate and the way in which he proposed to apply it in reaching his conclusion, the Adjudicator breached the rules of natural justice.

The decision was not severable. The Judge did not consider it was necessary to decide on the competency of the severance of a part of a single dispute as he formed the view that a partial enforcement of the Adjudicator’s decision “would be likely to create complexities which are better avoided.”