Amec Capital Projects Ltd v Whitefriars City Estates Ltd

An adjudication award will not be enforced where the circumstances establish a real possibility of adjudicator bias or a breach of natural justice. Reappointment of the same adjudicator is not automatically disqualifying, but the court must assess all relevant circumstances together. An adjudicator who obtains outside legal advice must disclose the question asked, the substance of the advice and allow the parties to comment before deciding. The adjudicator must also determine the dispute actually referred; an erroneous answer to the correct question remains binding, but answering a different question is a nullity.

Amec sought enforcement under Part 8 of the CPR of a second adjudication award requiring Whitefriars to pay £508,401.52 plus VAT. A first award concerning substantially the same claim had not been enforced because the adjudicator was held to lack jurisdiction. Following the death of the person named in the contract, the RIBA reappointed the same adjudicator.

Whitefriars challenged the second award on jurisdictional, natural justice and bias grounds, and contended that the adjudicator had determined a different dispute. The central issues were whether the contractual appointment machinery had failed, whether the adjudicator’s conduct created a real possibility of bias or procedural unfairness, and whether he had answered the question referred.

1. The award was not enforced. The adjudicator’s decision was invalid because the circumstances, considered cumulatively, gave rise to a real possibility of bias and involved breaches of natural justice. Whitefriars was awarded the costs of the application.

2. The contractual reference to “George Ashworth” was a misnomer for Geoffrey Ashworth. However, Geoffrey Ashworth had died before the second dispute was referred. Clauses 39A.2 and 39A.3 therefore supplied no effective appointment machinery. Clause 39A.3 applied where an adjudicator who had received a referral became unable to complete it; it did not apply where the named adjudicator died before referral. The Scheme consequently applied, and Amec was entitled to seek nomination by the RIBA.

3. Reappointment alone did not inevitably establish bias. The assessment required the Porter v Magill test: whether, at the time of the decision, a fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias. Relevant circumstances included the similarity of the two adjudications, the earlier award having been a nullity, the threat of claims against the adjudicator, and the solicitor’s discussion with him about returning the same dispute because of his familiarity with it.

4. The adjudicator had carried forward undisclosed legal advice on the withholding-notice issue from the first adjudication. That independently amounted to a breach of natural justice. In the second adjudication he also decided the jurisdiction issue before disclosing the advice obtained from Clyde & Co. and before giving Whitefriars an opportunity to comment. An adjudicator seeking outside advice must disclose the question asked, the substance of the advice and allow meaningful comment before reaching the decision.

5. The challenge that the wrong dispute had been decided failed. Applying Bouygues v Dahl-Jensen and Nikko Hotels (UK) Ltd v MEPC Plc, the adjudicator had answered the question referred, namely whether sums on the invoices had been wrongfully withheld. Whether he had answered it correctly was immaterial to enforcement.