Liverpool City Council (“LCC”) entered into a framework agreement with Vital Infrastructure Asset Management (Viam) Ltd (“Vital”) in relation to highways planned work projects. The framework agreement provided that each work project was subject to an individual call-off contract. 

Vital commenced an adjudication against LCC in which the adjudicator decided that LCC should pay Vital £128,500 for Vital’s maintenance of temporary highways fencing. LCC brought Part 8 proceedings for declarations that the adjudicator had no jurisdiction, which arose under two contracts (“the two contracts issue”) and even if the adjudicator did have jurisdiction, (i) Vital failed to serve LCC in accordance with the contract (“the service issue”) and/or (ii) the adjudicator decided a question which had not been referred to him (“the nullity issue”). HHJ Davies suggested the nullity issue might be more appropriate as a breach of natural justice argument and permitted LCC to advance the natural justice issue since it was closely connected. 

In respect of the two contracts issue, a dispute that arises under more than one contract cannot generally be the subject of one adjudication reference. HHJ Davies disapplied this principle. The contract expressly contemplated that a dispute might arise under both the framework agreement and call-off contract, and in such circumstances, it could be referred to adjudication. Secondly, where there is a clear link between two or more arguably separate claims there may well point to being one dispute.1

HHJ Davies also found in Vital’s favour on the service issue. The call-off contract required the Notice to be sent to LCC at Cunard Building. This is what was done, the fact that it was also addressed to the Head of Procurement at the Commercial Procurement Unit of that address was an immaterial mistake.

On the nullity issue, LCC argued that the adjudicator failed to engage with the declarations sought in the Notice as regards the framework agreement terms and instead assessed the value of the fencing maintenance by reference to the call-off contract bill of quantities (“the BoQ”), therefore determining a dispute which was not referred to him. HHJ Davies found that the essential dispute referred was LCC’s failure to pay for fencing maintenance and the specific legal and factual grounds were not separate disputes to be separately decided. Secondly, the basis on which the adjudicator reached his conclusion was clearly set out. The adjudicator’s decision stated that there was a “typographical error in the Framework Agreement Schedule of Rates whereby the unit measurement should have been stated as Metres per Day”. HHJ Davies held that it is not for the court to decide whether the adjudicator’s decision was right or wrong, only whether the decision is unenforceable due to a lack of jurisdiction or procedural fairness. 

The final issue for HHJ Davies’ consideration was whether the adjudicator breached natural justice by finding that LCC had agreed that there was an error which should be amended where, on LCC’s case, this was untrue and the adjudicator had never identified it as an issue for determination. Vital had not advanced its case in the Notice or Referral based on a conflict between the Schedule of Rates (“SoR”) and BoQ. The adjudicator drew this to the parties’ attention in an email on 20 May 2021, in which he identified three ways forward. Vital rejected the adjudicator’s analysis and insisted he proceed in accordance with the case advanced in the Notice. 

The adjudicator sought to overcome the issue by determining the dispute on the basis that LCC had implicitly or expressly conceded in the compensation event notice that the SoR contained an error. The adjudicator did not give notice to LCC that he was considering this or allow LCC an opportunity to make submissions on this. Furthermore, the adjudicator failed to engage with the fundamental points made by LCC in its Response. 

HHJ Davies found that these were fundamental departures from the obligation to follow a fair procedure and the adjudicator was unable to convincingly explain how he reached his decision without allowing LCC the opportunity to address him on the point. LCC was entitled to a declaration that the decision was unenforceable as having been reached in a procedurally unjust manner and accordingly, no sum was due from LCC on the basis of the decision.

This is an interesting case highlighting the boundaries of the court’s intervention in adjudicators' decisions. HHJ Davies stated, “the decision of an adjudicator is not to be treated like an answer to an exam paper…it is enough that they decide the dispute referred to them and do not fail to deal with the key points”. Not every point raised requires an answer, however ultimately adjudicators must engage with the fundamental points and ensure they are deciding on the case being advanced in front of them.

• 1. Akenhead J in Witney Town Council v Beam Construction (Cheltenham) Ltd [2011]