Price & Anor v Carter (t/a Ian Carter Building Contractors)

Contractual adjudication and arbitration provisions may give a party a choice between the two procedures. Wording making arbitration subject to adjudication does not create a mandatory adjudication prerequisite unless the contract uses clear language to that effect.

An arbitrator may appoint an assessor on technical matters and adopt the assessor’s figures, provided the arbitrator considers the material and acts fairly. A challenge under section 68 of the Arbitration Act 1996 requires both a serious irregularity and substantial injustice. An arbitrator is not required to advise a party about appeal time limits after issuing the award.

The claimants sought permission and, if necessary, an extension of time to challenge an arbitrator’s award under sections 67, 68 and 69 of the Arbitration Act 1996. The dispute arose from a building contract for the demolition of a bungalow and construction of a house.

The claimants argued that arbitration was unavailable because adjudication was the primary dispute-resolution procedure. They also alleged defects in the notice of arbitration, serious irregularities in the arbitration, and an error of law concerning termination. The court considered the merits first, then the limitation and extension issues.

1. Jurisdiction and procedure. Articles 6 and 7 of the contract gave a party wishing to resolve a dispute a choice between adjudication and arbitration. The words “subject to Article 6” preserved the statutory right to adjudication under section 108 of the Housing Grants, Construction and Regeneration Act 1996; they did not make adjudication a mandatory preliminary step. Parallel adjudication and arbitration were legally possible. The notice of arbitration complied with rule 2.1 of the CIMA Rules because the requirement to seek agreement to an arbitrator was shorthand for the proposal process in rule 2.2.
2. Error of law. The termination provision required the relevant breach to continue for seven days. Two notices issued six days apart could not validly terminate the contract. The section 69 ground therefore failed. The court also considered, if necessary, that the contractual provision gave a right to appeal without leave.
3. Serious irregularity. The arbitrator had power under section 37 of the Arbitration Act 1996 to appoint a quantity surveyor as assessor. Section 37(1)(b), together with the arbitrator’s overriding duty under section 33 to act fairly, ordinarily required the parties to have an opportunity to comment on the assessor’s information, opinion or advice. The arbitrator was nevertheless entitled to restrict comments on the assessor’s valuation build-ups where both parties were treated alike and procedural comments remained possible. He had considered the assessments and was entitled to adopt them as his own. Any irregularity was neither serious nor shown to have caused substantial injustice.
4. The arbitrator had received further evidence on practical completion, so he had not improperly given evidence to himself. The complaints about additional claims and liquidated damages failed. The claimants’ application for an extension of time was granted to 26 April 2010 because it would be unjust to treat time as running before the outcome of their arguable section 57 request for reconsideration was known. The court expressed no concluded view on whether a section 57 application itself extends the statutory period.
5. The claim was dismissed with costs. The arbitrator was functus officio after the award, subject to the limited powers under section 57, and had no duty to advise the claimants about the appeal deadline.

Not stated in the judgment. The decision concerned an application and substantive challenge to an arbitrator’s award dated 8 March 2010.