This case is an appeal of the first instance judgment of Waksman J at [2022] EWHC 3319 (TCC), itself arising out of a series of adjudications between the parties. At first instance, the Judge concluded that the later adjudicator (i.e. the adjudicator in Adjudication No. 6) had been wrong to find that he was bound by the result in the earlier adjudication and gave judgment in favour of Global. Sudlows Limited (“Sudlows”) appealed. 

By way of background, Sudlows is a provider of data centre infrastructure. Global Switch Estates 1 Limited (“Global”), the Respondent and the Claimant in the first instance proceedings is an operator of data centres. 

Global engaged Sudlows to carry out fit-out works on their data hall in East India Dock in 2017 (the “Project”) under a JCT Design & Build 2011 Contract (the “Contract”) including the installation of cabling through sections of ductwork. Following delays to the installation of the ductwork (Global’s contractual responsibility) Sudlows installed said cabling in 2019, but this was found to have sustained damage. A third party then installed the cabling in 2020, but Sudlows refused to energise and connect the cabling. 

Adjudication 5

Alleging that the damage to the cabling was the result of faulty ductwork, Sudlows brought the fifth adjudication (“Adjudication 5”), seeking an extension of time. There were no other competing Relevant Events. The adjudicator agreed with Sudlows and determined that Sudlows’ installation methodology for the cabling was adequate and that the ductwork was defective and not fit for purpose. The adjudicator accordingly awarded an EOT of 482 days to Sudlows. 

Adjudication 6

Sudlows continued to refuse testing and energisation of the cabling, and Global omitted this final part of Sudlows’ scope, allowing Practical Completion to be certified and the testing and energisation to be carried out by third parties. Sudlows then brought the sixth adjudication (“Adjudication 6”) for an extension of time to Practical Completion and a loss and expense claim, relying on the same Relevant Event and the decision in Adjudication 5. 

In its response, Global introduced new evidence from its certifiers claiming that there had been no fault with the ductwork. The adjudicator in this adjudication considered himself bound by the findings of the adjudicator in Adjudication 5 and awarded Sudlows an extension of time of 133 days and loss and expense worth £996,898.24. The adjudicator also stated in the alternative that should he not have been bound by the finding in the fifth adjudication, the more likely cause of the failure of the cabling would be cable selection or installation, and he would instead have allowed Global’s claims for liquidated damages of £209,053.01.

The TCC Proceedings

Sudlows sought to enforce the principal decision in the Adjudication 6 before the TCC. Global resisted this claim and sought a declaration that the adjudicator’s narrow view of his jurisdiction breached natural justice and enforcement of the adjudicator’s alternative findings entitling Global to liquidated damages. The judge found in favour of Global. In his reasoning, he explained that considered that Global had not simply repeated its argument from the Adjudication 5, and that the disputes were not the same or substantially the same. Pursuant to this reasoning, the judge found that the principal decision of the sixth adjudication could not be enforced, and Global were instead entitled to the enforcement of the adjudicator’s alternative finding. 

The Appeal

In their appeal, Sudlows argued that the judge had erred in his findings, and that the period of delay to the Project caused by the issues with the cabling and ductwork remained Global’s responsibility. Global advanced the argument in response that Adjudication 6 concerned a new claim for extension of time and an entirely new loss and expense claim, and accordingly the adjudicator was entitled to come to his own conclusions on these claims.

Coulson LJ first dealt with the issue of jurisdiction. Agreeing with Sudlows, he found that the adjudicator had been correct to conclude that he was bound by the Adjudication 5. The core issue referred to the adjudicator was Global’s responsibility for the cabling and ductwork issues, which was the same as in Adjudication 5. That Adjudication 5 and Adjudication 6 concerned different time periods was of little weight. Summarily, the adjudicator would not have been free to depart from the findings of Adjudication 5.

Coulson LJ then considered the substantive conclusions in the adjudicator’s alternative findings. He considered that Global’s argument in Adjudication 6 was in fact a root-and-branch challenge to the findings of Adjudication 5. These issues had not been open to re-adjudication, but would need to be challenged in arbitration or before the court in line with the underlying principle of “pay now, argue later”. Although the period of extension of time considered in Adjudication 6 differed from that in Adjudication 5, nothing had changed factually; no further Relevant Events and no competing causes of delay had been identified, and no further work had been undertaken by Sudlows. The new evidence introduced by Global also primarily served to challenge the findings in Adjudication 5, and were therefore also inadmissible. On the basis of the above, Coulson LJ reinstated the original decision in the sixth adjudication and required £996,898.24 to be paid to Sudlows. 

Conclusions

The core point to take away from this judgment is one concerning serial adjudications and their compatibility with the “Pay now, argue later” principle. An adjudicator will be bound by the findings in previous adjudications, and as further disputes are determined by subsequent adjudications, fewer disputes of narrower scope will remain have not yet been determined. It is important for both parties to ensure that their submissions concerning a dispute at issue late in a series of adjudications do not run the risk of overlapping with previous determinations, as this judgment will further encourage adjudicators to find that they do not have jurisdiction if the underlying issue referred appears to be substantially the same. In any event, attempting to re-adjudicate a settled dispute is unlikely to succeed; the proper avenue to challenging an adjudicator’s findings will be in arbitration or before the court