Lafarge (Aggregates) Ltd. v London Borough of Newham

A contractual time limit for commencing arbitration runs from the date on which an adjudicator gives the decision, where the decision has been effectively communicated electronically and no agreed procedure requires postal or signed delivery. An obvious erroneous cross-reference may be corrected by construction where the commercial meaning is clear and only one contractual provision can sensibly have been intended. A contractual deeming provision for service may operate as a complete code. Where so construed, service occurs at the specified deemed time, regardless of earlier, later or absent actual receipt. “Working day” ordinarily means an ordinary office working day, not a day on which site work may occur.

Lafarge applied under section 67(1)(a) of the Arbitration Act 1996 to challenge an arbitrator’s preliminary ruling that he had jurisdiction. The dispute arose under a construction contract containing adjudication and arbitration provisions. The adjudicator sent his decision by email on 13 August 2004 and later sent a signed hard copy. Newham served its Notice to Refer by recorded delivery on 11 November 2004.

The arbitrator held that the decision was given on 13 August, that a mistaken reference to sub-clause (6) meant sub-clause (7), and that contractual service was deemed two working days after posting. He concluded that Saturday was a working day and that the notice was timely. The central issues were the date of the adjudicator’s decision, the proper construction of the cross-reference, the effect of the deeming provision, and the meaning of “working day”.

1. The application succeeded. The arbitrator had no jurisdiction because the Notice to Refer was not served within the contractual three-month period.
2. The adjudicator gave his decision on 13 August 2004 when he sent it by email and it was received. The parties had used electronic communications without objection, and the adjudicator’s earlier indication of his usual practice did not create a binding requirement for postal delivery or a signed decision. The later hard copy merely reproduced a decision already given.
3. The reference in clause G43(10)(b) to a decision under sub-clause (6) was an obvious drafting mistake. As a matter of sensible commercial construction it referred to the adjudication procedure in sub-clause (7), particularly since that was the only contractual adjudication procedure. Correction by construction did not amount to rewriting or require rectification.
4. Clause G44(3) formed part of a complete code for contractual notices. “Deemed to be served two working days following service” fixed the time of service. It was not merely a rebuttable presumption operating only where actual receipt could not be proved. Earlier receipt, delayed receipt, or non-receipt did not alter the deemed date.
5. “Working day” had its ordinary meaning in this contract: an ordinary office working day. It did not include Saturday merely because some site work could be performed then, or because particular work attracted permitted hours or premium rates. Saturday 13 November 2004 was therefore not a working day.
6. The two working days following posting on Thursday 11 November could not expire until Monday 15 November. The notice was consequently out of time, and the arbitrator’s jurisdictional ruling was set aside to that extent.