The claimant, ISG Construction Limited (ISG) entered into a sub-contract with English Architectural Glazing Limited (EAG) whereby the defendant would design, supply and install cladding on a project in London. The start date under the subcontract was 20 March 2017, and the contractual completion date was to be 11 September 2017. 

It is undisputed that the claimant did not permit the defendant to start on site until 11 September 2017 and as a result the claimant awarded the defendant a 25 week EOT, but a dispute arose as to whether this was adequate given that EAG would now be working in the winter as opposed to the summer. The parties exchanged correspondence regarding the delay and by December 2018, the claimant had deducted £3.2m from interim valuation 35, which ISG claimed was its bona fide estimate of damage pursuant to Clause 9(8). These exchanges culminated in the defendant’s submission of a notice of adjudication on 09 January 2019.

The notice of adjudication stated that the dispute related to three issues: (i) ISG’s claim that the defendant was responsible for causing 20 weeks delay to the main contract and subsequently was liable for the sum of £3,183,000; (ii) the claimant’s failure to grant the defendant a sufficient EOT or to accept that the defendant was entitled to a reasonable time for completion; and (iii) the claimant’s failure to support its claim by detailed particulars or substantive evidence.

Due to a lack of “useful programming analysis”, the adjudicator Mr Collie had to form “an impressionistic view” of the delays, and ultimately found that EAG had excuses for their non-performance up until 22 October 2018.

The adjudicator then considered the position regarding the claimant’s bona fide estimate of loss. ISG argued that the adjudicator had no jurisdiction to review or revise the claimant’s bona fide estimate because of Clause 9(8) which should be “binding and conclusive” pending final determination. The adjudicator found he did have jurisdiction, in the same way the court does, to review the estimate. The adjudicator found that ISG failed to establish the causal link between EAG failing to give notice and the delay to the main contract works. ISG also failed to establish a link between the delay to the subcontract and the 20 week delay to the main contract. This meant without a bona fide estimate of loss, the claimant was required to repay the amount deducted.

In response to the adjudicator’s decisions in favour of EAG, the claimant sought various declarations in the TCC. The first issue, according to the claimant, was that the defendant failed to give the required notifications of any delay as required by clauses 9(4) and/or 9(5) and therefore they lose any entitlement to an EOT. Secondly, the claimant asserted that in those circumstances there is “no possible basis for not according its bona vide estimate the binding and conclusive effect for which clause 9(8) provides”.

In response to the EOT issue, the Judge found these were issues mixed with fact and law and therefore “inherently unsuitable for determination in isolation under Part 8”. The Judge subsequently declined the grant declaratory relief. Declarations (4) and (5) related to the bona fide estimate issue. The Judge here also concluded that the claimant was not entitled to these declarations, noting “they are premised on the basis of an all or nothing position” and that the adjudicator had been “plainly entitled” to determine whether the estimate was bona fide”.

Ultimately none of the declarations were considered appropriate. The Judge warned that engaging in a “diet of serial adjudications”, supplemented by a series of Part 8 applications to the TCC is not always in the parties’ best interests. 

Comment

This case, particularly the concluding judgment, demonstrates the potential for wasted costs that can arise with a challenge to an adjudicator’s decision and the careful consideration that must be taken by parties in respect of this.