Amec Capital Projects Ltd v Whitefriars City Estate Ltd

On an application to stay proceedings under Arbitration Act 1996, the court may determine contractual terms, the existence and scope of an arbitration agreement, and jurisdictional issues where necessary to dispose of the application. The fact that the underlying dispute is contractual does not prevent the court from deciding it.

An arbitration clause which excludes disputes concerning enforcement of an adjudicator’s decision covers disputes about whether the decision was authorised and enforceable, including challenges based on appointment, jurisdiction or natural justice. Such matters are for the court rather than the arbitrator.

The claimant sought to enforce an adjudicator’s decision arising from construction work performed under a letter of intent. The defendant applied under section 9 of the Arbitration Act 1996 for a stay, arguing that the dispute concerned the proper appointment of the adjudicator and fell within an arbitration agreement.

The court had to determine the contractual terms incorporated by the letter of intent and whether the dispute fell within the exception in Article 6A of the JCT conditions for matters connected with enforcement of an adjudicator’s decision.

1. The application for a stay was dismissed. The dispute fell within Article 6A and was therefore excluded from the arbitration agreement.

2. The court was entitled, and required, to determine the relevant contractual issues at the stay stage. This included construing the letter of intent and deciding matters going to the existence, scope or jurisdiction of an arbitration agreement. The court’s power under Part I of the Arbitration Act 1996 was not displaced merely because an arbitrator could also determine jurisdictional questions.

3. The letter of intent constituted a conditional contract. Pending execution of the formal contract, the work was to proceed on the terms originally proposed by the defendant, including the relevant JCT amendments. Silence during negotiations did not establish acceptance of proposed amendments, and contractual certainty required the applicable terms to be identifiable.

4. Article 6A excluded disputes connected with enforcement of an adjudicator’s decision. That included a challenge asserting that the decision was unauthorised because the wrong adjudicator had been appointed. The same reasoning applied to challenges based on excess of jurisdiction or failure to comply with natural justice.

5. The approach in Macob v Morrison [1999] BLR 93 supported treating a decision as a decision for enforcement purposes unless the adjudicator had purported to decide a dispute outside the authority conferred. Here, the appointment challenge was precisely a dispute about whether the adjudicator was authorised to make an enforceable decision.

The substantive dispute was accordingly not to be referred to arbitration at this stage.