Sudlows Ltd (the “Contractor”) brought a Part 7 claim against Global Switch (the “Employer”) to enforce an adjudication decision, requiring the Employer to pay the Contractor a total of £996,898.24 (exc VAT) (“Adjudication No.6”). The Employer also brought Part 8 proceedings against the Contractor requesting a declaration be made that the adjudicator in Adjudication No.6 acted in breach of natural justice and that the alternative findings found by him were to be applied if he the court found his decision to be wrong in Adjudication No.6.

The Contractor and the Employer entered into a  JCT Design and Build 2011 dated 22 December 2017 (the “Contract”). The Contractor’s work involved getting high-voltage cables to the Site from another part of the Employer’s premises through ductwork under the main road and into the Site. On 21 June 2019, the Contractor damaged a cable when pulling the cables through the ductwork. In the summer of 2020, a new contractor provided new sets of cables and pulled them through the ductwork. The Contractor refused to terminate and energise the cables, and it was this refusal that caused delay to completion. 

Adjudication No.5 

On 18 January 2021, the Contractor applied for a decision in respect of whether it was entitled to an EOT from 29 May 2020 to 18 January 2021. In doing so, the Contractor relied on the Relevant Events at Clauses 2.26.1 and 2.26.6 of the Contract (the “Relevant Events”). 

The Contractor argued that the primary cause of delay was the defective ductwork which the Employer was responsible for. The Adjudicator accepted the Contractor’s arguments and found that the Completion Date was 8 December 2020 and granted an EOT from 29 May 2020 to 18 January 2021. The Employer was not entitled to liquidated damages. 

Adjudication No.6 

Following Adjudication No.5, the Employer omitted energisation from the Contractor’s scope of work and certified practical completion as being 7 June 2021. The Contractor as a result sought a further EOT from 19 January 2021 to 7 June 2021, relying on the Relevant Events utilised in Adjudication No.5. The Contractor argued that a ‘natural consequence’ of Adjudication No.5 would mean the 133 days being sought would be granted, on the basis that the adjudicator would be bound by the prior decision. 

The Employer did not challenge Adjudication No.5 on the basis that there were different causes of delay post 18 January 2021. However, it did submit new evidence and argued that the facts giving rise to the Relevant Events formed part of the adjudicator’s reasoning in Adjudication No.5 not the decision. 

The adjudicator asked the parties as to whether he should consider alternative positions in connection with the extent to which they were bound by Adjudication No.5.The Employer did not confirm but the Contractor responded by saying that he should not consider the alternative position 

Concluding that ‘the parties are bound by Mr Curtis’s finding and reasons in this respect’, the adjudicator found that the Contractor was entitled to refuse to connect and energise the cables and the Contractor was entitled to an EOT for the delays he found to be the responsibility of the Employer. In his alternative findings i.e. if he was not bound, then the Contractor would not be entitled to an EOT and the completion date would be 8 December 2020.

The Decision 

The main issue for the Judge was whether the adjudicator was bound by the decision in Adjudication No.5. In analysing this, Mr Justice Waksman made reference to the material relating to the relevant part of the dispute, in particular the materials reviewed in Adjudication No.6, being two RINA reports and successful testing of the new cables in existing ductwork provided by the Employer, had a dramatic effect on the decision in Adjudication No.6. 

The Judge  went on to say that the mere existence of the same relevant events is insufficient evidence that the dispute was substantially or the same. This was because: 

1. the EOT related to two different periods of time;
2. the dispute in relation to the second EOT claimed involved new materials which were not part of Adjudication No.6; and 
3. Adjudication No.6 issues formed part of the wider dispute of the parties, as to the true value of the works. 

Sudlows argued that to hold the disputes as not the same would have disruptive consequences for the adjudications. Relying on Carillion1they argued that the additional evidence did not alter what the essential dispute is or has been. Waksman J acknowledged this but emphasised that the disputes concerned different periods of time, with new materials emanating from the second period of time, something which the adjudicator failed to provide weight to in Adjudication No.6. 

On that basis, Waksman J found that the adjudicator on Adjudication No.6 focused on the decision of Adjudication No.5 ’in something of a vacuum, as it were’ and held that Adjudication No.6 was unenforceable with the alternative findings found in that adjudication enforceable, thus sums were payable to the Employer by the Contractor. 

Practical Implications

This case is a useful reminder that an adjudicator who fails to consider relevant aspects may be in material breach of the rules of natural justice and, as such, the court may be prepared to enforce an ‘alternative’ decision provided by an adjudicator if it is found their primary decision was unenforceable. 

• 1. Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWCA Civ 1358