Facts

In April 2011, Greencoat Construction Ltd (“Greencoat”) sub-contracted with Working Environments Ltd (“WE”) to carry out mechanical services installation for fit out works at an office building in Shaftesbury Avenue, London. The sub-contract incorporated the JCT SBCSub/A 2005 Standard Building Sub-Contract Agreement Revision 2 2009 (“the Contract”).

A dispute arose between the parties over Greencoat’s valuation of WE’s Interim Application No. 10, as issued to WE on 2 December 2011, as well as the value of the 9 items Greencoat sought to set off by way of a withholding notice. On 14 December 2011, WE referred the dispute to adjudication, requesting the adjudicator declare, among other things, the amount to be paid to WE when payment fell due on 14 January 2012.

Greencoat raised numerous jurisdictional challenges, including that no material dispute had crystallised as the date for payment had not yet accurred. Once the adjudication had commenced and prior to service of its response, Greecoat issued a second withholding notice including 12 items, two of which had not previously been mentioned. The adjudicator rejected Greencoat’s jurisdictional arguments and determined that Greencoat should pay WE £250,860 (as amended by way of the slip rule) when payment fell due, including the two further items in his determination.

WE issued proceedings claiming the sum of £250,860. Greencoat maintained its jurisdictional challenge and further argued that the adjudicator had no jurisdiction to deal with any of the 12 items within the second withholding notice, or at least no jurisdiction to deal with the last three items.

The court addressed the following issues:

• Had a dispute crystallised prior to the Notice of Adjudication being issued?
• Did the adjudicator have jurisdiction to deal with all the issues contained within his decision and , in particular, the 12 items within the withholding notice?
• If not, could parts of the adjudicator's decision be severed?

The Judge held that a dispute about an interim valuation, before the date of payment, was referable to adjudication. In respect of two of the 12 items in the decision, the Judge held that the adjudicator lacked jurisdiction, as they had not arisen until some 22 days into the adjudication process. The Judge also confirmed the dicta in Cantillon Ltd v Urvasco Ltd [2008] EWHC 282 that adjudication decisions were severable, enforcing the large bulk of the adjudicator’s decision.