CIB Properties Ltd. v Birse Construction

A dispute is suitable for adjudication by reference to whether the adjudicator can reach a fair and impartial decision within the statutory or agreed timetable, not by reference to the dispute’s apparent complexity alone. A dispute crystallises on the facts as a matter of common sense. Further discussions do not prevent crystallisation unless the parties have agreed to defer adjudication. The adjudicator controls the procedure and may limit disclosure, provided each party has a proper and equal opportunity to present its case. The court will not review the merits of an interim adjudication decision merely because an alleged error may have affected the result. A slip may be corrected only where the adjudicator acknowledges a genuine accidental error and the correction is timely and causes no unfair prejudice.

CIB sought enforcement of an adjudicator’s decision requiring Birse to pay £2,164,892 following disputes arising from the termination of a construction contract. Birse contended that no dispute had crystallised when the adjudication was commenced, that CIB’s pre-adjudication conduct had caused incurable prejudice, that the dispute was too complex for fair adjudication within the statutory timetable, and that the adjudicator had made a material slip in calculating the sum awarded.

The parties had engaged in extensive correspondence, mediation and meetings. They discussed a further meeting but did not agree that CIB would defer adjudication until it occurred. The adjudicator extended the timetable with the parties’ agreement and conducted an extensive procedure involving written submissions, expert meetings, hearings and limited disclosure.

1. Crystallisation. The claim notified on 28 July 2003 was disputed and had crystallised by the referral on 14 November 2003. The correct test is whether, taking a common-sense approach, the dispute has crystallised. Continuing genuine discussions may be relevant to that factual inquiry, but parties may continue discussions after crystallisation. The parties’ tentative willingness to meet again did not amount to an agreement to defer adjudication.
2. Fairness and complexity. The statutory scheme gives a general right to refer a construction dispute to adjudication. There is no separate exception for complex disputes. The relevant question is whether the adjudicator could reach a fair and impartial decision within the time allowed by Housing Grants, Construction and Regeneration Act 1996, section 108(2)(c) and (d). A defendant is not required to agree further extensions merely because refusal may make the adjudicator’s task difficult. The adjudicator retains control of procedure and disclosure, subject to the duty to give each party a proper and equal opportunity to present its case.
3. The adjudicator acted fairly. Birse had substantial time before the referral and was given a proper opportunity during the extended adjudication to investigate the claim, present expert evidence, make submissions and respond to the issues. The complexity of the dispute did not itself invalidate the process.
4. Alleged slip. The court adhered to the narrow principle that an adjudicator may correct a genuine accidental error or omission. Two questions arise: whether the adjudicator is prepared to acknowledge and correct the mistake, and whether it is a genuine slip giving effect to first thoughts rather than a change of mind. The adjudicator’s letter did not invite the court to review the award. In any event, the court should not review an interim decision where the adjudicator answered the right question, even if he may have answered it incorrectly. The court inclined to the view that the calculation reflected the adjudicator’s own assessment rather than a slip.
5. The adjudicator’s decision was enforced. Birse was ordered to pay CIB £2,164,892.