VGC Construction Ltd v Jackson Civil Engineering Ltd

An adjudicator’s decision should generally be enforced unless it is plain that the question decided was not referred or the adjudicator acted in an obviously unfair manner. A dispute may arise from a claim stated only briefly if, viewed in its commercial context, the respondent can sensibly understand and reject it. A claim does not cease to be a dispute merely because it is held in abeyance. Withdrawal or abandonment requires a clear agreement or expression. A party that invites the adjudicator to value a claim at nil ordinarily affirms the adjudicator’s jurisdiction over that claim.

VGC sought summary enforcement of an adjudicator’s decision awarding it a net sum following a final-account dispute under a construction sub-contract. Jackson challenged enforcement on jurisdictional grounds. It argued that VGC’s £300,000 delay and disruption claim had been withdrawn, was too nebulous to generate a dispute, and had become substantially new during the adjudication. It also argued that its submissions reserved a jurisdictional objection.

The central issues were whether a crystallised dispute existed, whether the claim had been withdrawn, whether the adjudicator had jurisdiction over the claim as presented, and whether Jackson had effectively reserved its jurisdictional objections.

1. Enforcement. The application for summary judgment was allowed. The adjudicator’s decision was enforceable, with judgment for VGC in the sums claimed.
2. Existence of a dispute. Applications 13 and 14, read in context, gave rise to a dispute. Although the £300,000 claim was expressed in one line, it formed part of a substantial account containing numerous items identifying delay, disruption, variations and site preliminaries. The surrounding circumstances made its broad basis sufficiently intelligible. A claim need not be fully particularised before it can be disputed.
3. Withdrawal. The claim had not been withdrawn. Holding the claim in abeyance while substantiation was prepared did not amount to abandonment. Withdrawal of an existing disputed claim requires a clear agreement or expression, by words or conduct, that it will not be pursued. No such agreement or representation was established.
4. Jurisdiction. The adjudicator had jurisdiction to determine the final-account dispute, including the delay and disruption claim and its relevance to the contra-charges. Jackson’s Response invited the adjudicator to value the £300,000 claim at nil and addressed its merits in detail. That was an invitation to adjudicate, not a jurisdictional challenge.
5. New material and reservation. The Hudson formula calculation in VGC’s Reply was new, but it responded to Jackson’s complaint that the claim lacked calculation or support. Jackson had sufficient opportunity to address it, and there was no natural justice complaint. References to the material being inadmissible, and a general reservation of position, did not clearly reserve a jurisdictional objection.
6. The court applied the enforcement policy stated in Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2006] BLR 15, the guidance on disputes in Amec Civil Engineering Ltd v The Secretary of State for Transport [2005] BLR 227, and considered the contrasting circumstances in Cruden Construction Ltd v Commission for the New Towns [1995] 2 Lloyd’s Rep 387.