IDE Contracting Ltd. v RG Carter Cambridge Ltd

The appointment procedure in the Scheme for Construction Contracts must be followed. After notice of adjudication, the named adjudicator must first be requested to act unless he has already indicated to all parties that he is unwilling or unable to do so. A referring party cannot bypass that procedure by privately ascertaining the named adjudicator’s availability. Non-compliance deprives the nominated adjudicator of jurisdiction unless the responding party has submitted to that jurisdiction in the full sense, including agreeing to be bound by the adjudicator’s ruling on jurisdiction. Actual prejudice need not be established.

The claimant sought summary enforcement of an adjudicator’s award for payment under a construction contract. The defendant had reserved its jurisdictional objections during the adjudication and withdrew before the award was made.

The contract named Mr Stephen Pratt as adjudicator, with nomination by the Chartered Institute of Arbitrators if he was unable or unwilling to act. The claimant contacted him before serving the notice of adjudication and then obtained the nomination of Mr John Smalley without making the request required by the Scheme after the notice was served. The issues were whether Mr Smalley had been validly appointed, whether the defendant had submitted to his jurisdiction, and whether the defendant had suffered prejudice.

1. Appointment procedure. The relevant provisions of the Scheme for Construction Contracts (England and Wales) Regulations 1998 required the notice of adjudication to come first. The referring party then had to request the named adjudicator to act, unless he had already indicated to all parties that he was unwilling or unable to do so. The request had to be accompanied by the notice. The claimant had made no request under paragraph 2(1)(a), and the procedure had therefore been bypassed.
2. The requirement that the named adjudicator’s unwillingness or inability be indicated to all parties was implicit in paragraph 2(1)(b), as it was express in paragraph 6. A contrary construction would allow a claimant to ascertain privately when the named adjudicator was unavailable and deprive the other party of its contractual first choice.
3. Jurisdiction and submission. Non-compliance with the appointment provisions deprived Mr Smalley of jurisdiction unless the defendant had submitted in the full sense identified by Simon Brown LJ in Thomas-Fredric (Construction) Limited v Keith Wilson [2003] EWCA Civ 1494: that is, agreeing both that the adjudicator should rule on jurisdiction and that the defendant would be bound by that ruling.
4. The defendant had consistently reserved its position, had not agreed to be bound by Mr Smalley’s jurisdictional ruling, and had withdrawn from the adjudication. It had therefore not submitted to his jurisdiction. Actual prejudice was unnecessary. Although it was unlikely that Mr Pratt would ultimately have acted, the confusion caused by the claimant’s failure to follow the procedure demonstrated its importance. The defendant’s belief that Mr Pratt had not been approached had contributed to its withdrawal.
5. The court did not decide the separate argument that two disputes had been referred contrary to paragraph 8(1) of the Scheme, because the first jurisdictional ground was sufficient.
6. The adjudicator’s award could not stand. The claim for summary enforcement was dismissed.

not stated in the judgment.