AWG Construction Services Ltd v Rockingham Motor Speedway Ltd

An adjudicator’s jurisdiction depends on the dispute which the parties agreed to refer and the basis on which it was referred. The process is not confined rigidly to every fact and argument in the notice, but a wholly different case may constitute a different dispute. Procedural fairness can protect a party where the case develops, but substantial late changes must be met with a proper opportunity to respond. An adjudicator’s decision on a discrete claim may be enforced separately from an unenforceable decision on another discrete claim. A stay of enforcement requires the justice of the case, consistently with the overriding objective, to demand it, balancing prompt enforcement, prejudice to the successful party and the risk of non-recovery.

AWG sought to set aside or resist enforcement of an adjudicator’s decision concerning defects in a motor-racing track, a grandstand and tunnels. It alleged that the adjudicator had decided a matter outside the dispute referred and had acted unfairly by relying on a substantially altered case introduced shortly before the decision.

The adjudicator rejected the original case that changing the track sub-base caused the drainage problem, but found AWG liable on a wider case concerning failure to consider water movement and additional drainage. The court had to determine jurisdiction, natural justice, severability and enforcement of the uncontested parts of the decision.

1. Jurisdiction. The adjudication concerned whether the Oval was unfit for high-speed racing and whether AWG was negligent in its design on the grounds set out in the referral notice and the expert evidence. The adjudicator rejected those cases as originally advanced, but decided liability on a substantially different case concerning the absence of drainage and the consequences of water movement. That was in essence a different adjudication. The Oval decision was therefore outside the referred dispute and unenforceable.
2. The word “dispute” should receive a broad, practical interpretation. The court must ask what dispute the parties agreed to refer and on what basis. An adjudicator is not rigidly confined to the original package of facts and arguments. However, where the basis argued is wholly different from that which the responding party had an opportunity to address, the decision may be non-responsive and outside jurisdiction. The parties may agree during the adjudication that a new basis can be considered.
3. Natural justice. The late material introduced a radically new case: that the defect resulted from absent drainage rather than the selected sub-base, that AWG had to take special steps to meet the specified purpose, and that the flaw should have been obvious. AWG had only a few days to respond. It was materially prejudiced and lacked a proper opportunity to answer the case. The Oval decision was independently unenforceable for breach of fairness and natural justice.
4. Severance. The parties had agreed that three discrete claims could be heard together. The absence of a valid decision on the Oval did not prevent immediate enforcement of the uncontested decisions concerning the building and tunnels. Rockingham was entitled to summary judgment for £54,328.73.
5. Stay. A stay should be granted only where, consistently with the overriding objective, the justice of the case demands it. Relevant considerations include the statutory policy of summary enforcement, prejudice to the successful party, any serious risk of non-recovery, and the diligence with which the substantive remedy is pursued. No wider stay ruling was required.