RWE engaged Alstom to repair and maintain boilers at its power station. The boiler contract was one of three contracts concluded between the parties at about the same time. The boiler contract was for an initial 12 month period in 2007 with RWE having the option to extend it for two further 12 month periods in 2008 and 2009. The contract was extended for one further 12 month period only. The boiler repair works overrun and the parties agreed an amending Deed that settled a number of financial and procedural matters regarding the works being undertaken in 2008. The Deed also included a provision that the parties could refer disputes to adjudication in accordance with the Scheme.

Disputes arose which Alstom referred to adjudication. The third adjudication involved matters that were part of a claim for a extension of time and extra costs. RWE disputed the Adjudicator’s jurisdiction. The Adjudicator decided in Alstom’s favour.

At enforcement RWE argued that the decision was not enforceable due to the Adjudicator lacking jurisdiction and, on the assumption that the Act did not apply to the boiler contract, it was entitled to set off against the Adjudicator’s decision. The Judge held that, on a proper construction of the notice, the claim was made under the boiler contract only and there was a single dispute only i.e. what extra costs were Alstom entitled to be paid for the boiler overhaul in relation to the specified claims.

RWE also argued that some of the exchanges between the parties on a without prejudice basis prior to the adjudication could not evidence the dispute referred to adjudication. After reviewing the correspondence, the Judge held that the correct interpretation of it was that there was nothing privileged about it before the claims were served. Further there was nothing confidential about the expressions on both sides of a willingness to compromise. Adopting a wide definition of dispute, a dispute had crystallised by the time the notice of adjudication was served. Further there was no breach of natural justice as there was not a real danger that the adjudication was unfair because the Adjudicator saw the claims.

The Judge did not allow RWE to set-off against the Adjudicator’s decision. RWE’s claim for liquidated damages did not logically follow from, and had no connection with, any of the matters decided by the Adjudicator. Therefore a right of set-off could only be derived from the terms of the contract. However, the boiler contract precluded a set-off from being raised as the effect of one of the clauses in the Deed was to incorporate the provisions of the Scheme. As such, the parties intended, as a matter of construction, to import into the contract the parliamentary intention underlying the Scheme.