Ravestein BV (“Ravestein”) and Trant Engineering Ltd (“Trant”) entered into an  NEC3 Engineering and Construction Subcontract June 2005 (Amended June 2006) Option A, with Dispute Resolution Option W2, dated 14 September 2010. (“the Contract”). Clauses W2.3(11) and W2.4(2) provided that an adjudicator’s decision would be final and binding unless a Notice of Dissatisfaction was provided by one of the parties within 4 weeks of the decision. 

During 2021, Trant commenced an adjudication claiming damages for Ravenstein’s defective works. On 11 April 2021, Ravestein was ordered to pay Trant, the sum of £454,083.09 plus VAT and costs in adjudication proceedings. On 12 April 2021, Ravestein issued two emails addressed to the adjudicator (with Trant in copy) - the first stated that they did not accept the adjudicator’s jurisdiction nor recognise the ruling whilst the second asserted that the adjudicator was not entitled to make any rulings.

Ravestein then served a notice of its intention to refer the dispute concerning its liability for defects to arbitration on 27 October 2021, relying on its email in April 2021 as their notice of dissatisfaction. The parties agreed that the arbitrator should first determine whether Ravestein had served a valid Notice of Dissatisfaction to prevent the adjudicator’s decision from becoming binding and granting the arbitrator jurisdiction to decide the dispute. On 22 March 2022 the arbitrator decided that Ravestein had not served a valid Notice of Dissatisfaction, and he did not have jurisdiction.

Ravestein subsequently sought leave from the Court to appeal the arbitrator’s award and this was the main issue before the Court.

In support of its position that the arbitrator had reached an incorrect decision, Ravestein relied on the following points:

• the Notice of Dissatisfaction was valid under the Claimant’s interpretation of Transport for Greater Manchester v Keir Construction Ltd [2021] EWHC 804 (TCC), which it argued set out that a specific form of words or level of detail is not required to constitute a valid notice; and
• the arbitrator had incorrectly interpreted the dicta of Lloyd LJ in The Pera [1985] 2 Lloyd’s Rep. 103, as any doubt over the validity of a notice should be resolved in favour of allowing a claim to continue.

In opposition, Trant argued that:

• the arbitrator had correctly interpreted Transport for Greater Manchester in determining that the Notice of Dissatisfaction given by the Claimant was not a valid notice in respect of the adjudicator’s decision, but only a notice disputing the adjudicator’s jurisdiction;
• the arbitrator had correctly interpreted The Pera, and this could be distinguished from the present case as it concerned the correct interpretation of clauses rather than notices;
• while the interpretation of notice provisions was capable of being a matter of public importance, interpretation, this wasn’t the case in this specific issue; and
• it was not proper to determine this question as it goes against the “pay now, argue later” objective of the Housing Grants, Construction and Regeneration Act 1996 (the “Construction Act”).

While the Judge accepted that the determination of the validity of the Notice of Dissatisfaction would substantially affect the parties’ rights, the judge refused leave to appeal. In her judgment, she agreed with the Defendant’s interpretation of Transport for Greater Manchester, highlighting the need for a notice to be “clear and unambiguous”. The judge also agreed with the distinction made by the Defendant that The Pera applied to the interpretation of contractual clauses, and not that of notices. Finally, the judge agreed with the Defendant that the issue in the Claimant’s application did not pose a question of public importance and it was not just and proper in all circumstances to determine this question.

Practical Implications

This judgment highlights two important issues for a party to keep in mind when dealing with an adjudicator’s decision under an NEC contract. Firstly, the discussion of the validity of a notice in the context of Transport for Greater Manchester highlights the critical importance of ensuring that a purported Notice of Dissatisfaction is clear and unambiguous, as the consequence of this not being the case is that the adjudicator’s decision will become final and binding. This judgment is also the latest in a line of reminders that the Courts will look to protect the “pay now, argue later” ethos of the Construction Act and are unlikely to re-open adjudicators’ decisions, particularly where a party is in default of its payment obligation.