Amec Group Ltd v Thames Water Utilities Ltd

On summary enforcement of an adjudicator’s decision, the court does not review whether the decision was right or wrong. It considers jurisdiction and fair process, allowing for the applicable time limits. A large or complex dispute is not inherently unsuitable for adjudication. The relevant questions are whether the adjudicator understood the issues and considered that broad justice could be done within the available time. A late second round of submissions need not be examined in detail. Failure to answer the right question may invalidate a decision, but an error made while answering the right question does not. Where a framework agreement provides for aggregated applications and withholding notices, the resulting dispute may fall within its adjudication clause.

AMEC sought summary enforcement of an adjudicator’s decision awarding approximately £1 million under a framework agreement governing numerous construction and maintenance works contracts. Thames Water challenged enforcement on jurisdictional, natural justice and error grounds. It also raised issues concerning approbation and reprobation and severability. The central questions were whether the dispute arose under the framework agreement, whether the aggregated claim and withholding notice could be dealt with in one adjudication, and whether the adjudicator’s procedure or decision was materially unfair or jurisdictionally defective.

1. Disposition. Thames Water’s challenges failed. Judgment was entered for AMEC in the sum of £950,155.57, with interest and costs to be addressed separately.
2. Enforcement principles. An adjudicator’s decision is temporarily binding, whether made under the Housing Grants (Construction and Regeneration) Act 1996 or an express contractual mechanism. The enforcement court does not decide whether the adjudicator was right or wrong. It asks whether the adjudicator had jurisdiction and reached the decision through a fair process, bearing in mind the speed of adjudication. The approach in Macob Civil Engineering Limited v. Morrison Construction Limited [1999] BLR 93 and Carillion Construction Limited v. Devonport Royal Dockyard Limited [2005] EWCA Civ 1358 was applied. A suggested distinction between statutory and contractual adjudication, associated with Steve Domsalla v. Kenneth Dyason [2007] EWHC 1174 (TCC), was not followed.
3. Jurisdiction. The aggregated payment application and withholding notice arose under the framework agreement. The phrase in connection with has a wide meaning, as explained in Ashville Investments Limited v. Elmer Contractors Limited [1989] QB 488. The contractual structure and the parties’ conduct showed that one adjudication could determine the aggregated dispute. The alternative multiple-dispute issue therefore did not arise. The adjudicator had jurisdiction.
4. Natural justice. Size and complexity alone do not make a dispute unsuitable for adjudication. The relevant inquiry, drawn from CIB Properties Limited v. Birse Construction Limited [2005] 1 WLR 2252 and HS Works Limited v. Enterprise Managed Services Limited [2009] BLR 378, concerns the adjudicator’s appreciation of the issues, the possibility of doing broad justice within the available time, and the parties’ opportunities to address the material. A further response served just over two days before the decision was due did not require detailed consideration. The adjudicator had regard to it, and Thames Water had suffered no material procedural prejudice.
5. Error and failure to address the issue. The distinction in Bouygues (UK) Limited v. Dahl-Jensen (UK) Limited [2000] BLR 522 and Shimizu Europe Limited v. Automajor Limited [2002] BLR 113 was applied. An adjudicator who answers the referred question in the wrong way may make an enforceable error. An adjudicator who fails to address the question or a critical defence may produce a nullity, as illustrated by Ballast PLC v. The Burrell Company (Construction Management) Limited [2001] BLR 529. Here the adjudicator addressed what was due, considered both sides of the account and was not required to analyse every smaller item. Any error was therefore an enforceable error of calculation.
6. Unresolved matters. The court declined to decide the approbation and reprobation issue. It also observed, conditionally, that severance might have been appropriate if the streetworks challenge had succeeded.