Dalkia Energy and Technical Services Ltd v Bell Group UK Ltd

In ongoing adjudication proceedings, the court may determine finally under CPR Part 8 whether contractual adjudication provisions were incorporated and whether the adjudicator has jurisdiction, where the issue is suitable for summary determination. A party’s reservation of its position while inviting an adjudicator to rule on jurisdiction does not, without an unequivocal agreement to be bound, amount to submission to that jurisdiction.

Contractual adjudication provisions which require a decision to be reached within the statutory period may validly allow a short additional period for issuing the decision. A referral comprising contractual claims and variations may constitute a single dispute where it concerns what sum, if any, is due under the contract.

Dalkia subcontracted repair and painting works to Bell. Bell later commenced adjudication proceedings for payment and variations. Dalkia challenged the adjudicator’s jurisdiction, arguing that Bell’s standard terms had not been incorporated, that the contractual adjudication clause failed to comply with section 108 of the Housing Grants, Construction and Regeneration Act 1996, that the appointment procedure had not been followed, and that more than one dispute had been referred.

Dalkia sought declarations under CPR Part 8 while the adjudication remained ongoing. Bell contended that the proceedings were unsuitable, abusive, or outside the court’s jurisdiction. The central issues were whether the court should determine the questions at that stage and whether the adjudicator had been validly appointed.

1. Part 8 and abuse. The proceedings were suitable for CPR Part 8. The factual disputes either had limited relevance or reduced to questions of law. Although Dalkia had taken numerous weak points and delayed commencing proceedings, the claim was not an abuse. It was preferable to resolve a genuine jurisdiction issue before enforcement proceedings.
2. Submission to jurisdiction. Dalkia had reserved its position from the outset, repeatedly maintained that the adjudicator lacked jurisdiction, and never agreed to be bound by his ruling. References to his ruling did not amount to unequivocal submission. The case was analogous to The Project Consultancy Group v The Trustees of the Gray Trust.
3. Incorporation. Bell’s March quotations incorporated its standard terms. The later reduction of the workscope and agreement of revised prices did not displace those terms. The terms were never queried, and the prequalification form had no contractual significance. The court therefore determined that the Bell conditions formed part of the subcontract.
4. Statutory compliance. Clause 12.4 complied with section 108 of the Housing Grants, Construction and Regeneration Act 1996. The decision had to be reached within the statutory period, but settled authority recognised a short additional period for issuing a decision reached in time. The Scheme for Construction Contracts was therefore irrelevant.
5. Appointment and scope of dispute. Clause 12 did not require a failed attempt to agree an adjudicator before approaching the RICS, nor did it require prior service of the notice of adjudication. In any event, the notice had been delivered to Dalkia’s principal business address before the RICS was approached. Claims for payment and variations formed one dispute: what, if anything, was due under the contract.
6. The adjudicator was validly appointed and had jurisdiction to determine the dispute.