Amec Capital Projects Ltd v Whitefriars City Estates Ltd

The rule against apparent bias applies to construction adjudicators. The question is whether a fair-minded and informed observer, having considered all relevant circumstances, would conclude that there was a real possibility of bias.

An adjudicator’s earlier decision of the same issue, and a resulting inclination to reach the same conclusion where the material is unchanged, do not alone establish apparent bias. There must be something substantial indicating a closed mind. Procedural fairness requires an effective opportunity to make representations before a decision affecting rights. It does not govern an adjudicator’s non-binding view of his own jurisdiction.

AMEC sought to enforce an adjudicator’s second decision requiring Whitefriars to pay sums due under a construction contract. The first adjudication decision had been held void because the adjudicator had not been appointed under the contractual machinery.

After the named adjudicator had died before any appointment, the dispute was again referred to Mr Biscoe under the Scheme. The Technology and Construction Court held that he had jurisdiction, but dismissed AMEC’s enforcement claim because apparent bias and procedural unfairness invalidated the second decision.

AMEC appealed. Whitefriars, by respondent’s notice, contended that the Scheme appointment was invalid and that the adjudicator lacked jurisdiction.

1. Appeal allowed unanimously. Lord Justice Dyson, with whom Lord Justice Chadwick and Lord Justice Kennedy agreed, held that Mr Biscoe had jurisdiction and that his second decision was not affected by apparent bias or procedural unfairness.
2. Appointment. On the proper construction of the contract, the replacement machinery in clause 39A.3 applied only after an adjudicator had been appointed and then became unable to determine a dispute referred to him. Geoffrey Ashworth’s death before appointment therefore did not activate that machinery. As no adjudicator had been appointed under clause 39A.2, the default machinery of the Scheme applied.
3. Apparent bias. The applicable test was that in Porter v Magill [2001] UKHL 67. Reappointment to decide the same issue was insufficient by itself. An adjudicator may reasonably be inclined to reach the same conclusion where the evidence and arguments are unchanged; the vice is a closed mind. None of the asserted additional matters showed a real possibility of that state of mind.
4. The first decision’s lack of jurisdiction was irrelevant. Legal advice obtained in the first adjudication did not address Whitefriars’ new clause 27 argument and was irrelevant to the second adjudication. The administrative telephone call, although private communications with a tribunal should ordinarily be avoided, did not invite or create prejudgment. Nor did Whitefriars’ unsupported threat of a damages claim create apparent bias.
5. Procedural fairness. Whitefriars had made representations on jurisdiction before Mr Biscoe decided to proceed. It identified no further argument that disclosure of the advice would have enabled it to advance. More fundamentally, an adjudicator’s view of his own jurisdiction has no legal effect and does not affect the parties’ rights. The rules of natural justice did not require representations before such a view was formed, although adjudicators should invite them where time permits.
6. Whitefriars was ordered to pay the adjudicated sums, the adjudicator’s costs, and AMEC’s costs. A stay and permission to appeal to the House of Lords were refused.

1. Court of Appeal (Civil Division): allowed AMEC’s appeal and enforced the adjudicator’s second decision.
2. Technology and Construction Court: His Honour Judge Toulmin QC dismissed AMEC’s enforcement claim. He held that the adjudicator had jurisdiction, but that breaches of natural justice invalidated the decision.
3. Technology and Construction Court: His Honour Judge Humphrey Lloyd QC had earlier held that the first adjudication decision was void because the adjudicator had not been appointed under the contract.