Rok Building Ltd v Celtic Composting Systems Ltd (No. 2)

An adjudicator’s decision remains enforceable despite factual, legal or mathematical errors, provided the adjudicator acted within jurisdiction and complied with natural justice. The enforcement court does not conduct a review of the decision’s correctness.

Natural justice is not breached merely because the adjudicator prefers contemporaneous documents, declines to hold a meeting, permits a response to new material, or reaches a conclusion contrary to one party’s evidence. An agreed slip rule permits correction of accidental errors or omissions and clarification or removal of ambiguity. It does not permit reconsideration of the merits or a change of mind on substantive issues.

Rok sought summary judgment to enforce a second adjudicator’s decision concerning completion of subcontract works, release of retention, liquidated damages and interest. Celtic contended that the adjudicator had acted contrary to natural justice by misunderstanding the evidence and payment position, failing to hold a meeting, considering a Scott Schedule, and refusing to reopen the decision under the contractual slip rule.

The court had to decide whether alleged errors and procedural complaints rendered the decision unenforceable, and whether the adjudicator had properly refused substantive corrections under clause 28 of the CIC Model Adjudication Procedure.

1. Enforceability despite error. The court applied the established approach that, where an adjudicator acts within jurisdiction, an incorrect factual, legal or mathematical answer does not ordinarily affect enforceability. Even a glaring error is not, without more, a breach of natural justice. The court will not review the relative correctness of the adjudicator’s decision. Any final correction of the parties’ account could be pursued in arbitration or litigation.
2. Natural justice. The adjudicator had considered the substantial documentary and witness evidence and was entitled to place significant weight on contemporaneous documents where the witness accounts conflicted. The absence of a meeting was not unfair because the agreed procedure did not require one and no objection had been made when the proposal was abandoned. Rok’s Scott Schedule was a response to Celtic’s allegations, and permitting that response was not unfair. Any alleged misrepresentation about payments could have been answered clearly by Celtic.
3. Slip rule. Clause 28 conferred a discretion to correct an accidental error or omission, or to clarify or remove an ambiguity. It did not permit the adjudicator to reopen the merits, reconsider the evidence or alter substantive conclusions. The adjudicator was best placed to decide whether an accidental error existed. Celtic’s complaints concerned the substance of the decision and were properly rejected.
4. Subsequent certificates and reasons. Celtic could not avoid payment under a valid adjudication decision by revising payment certificates after the decision. The adjudicator had given adequate reasons; he was not required to explain in detail why every item of evidence was accepted or rejected.
5. Order. Rok obtained summary judgment for the retention and wrongfully deducted liquidated damages sums, with interest, subject to credit for sums paid. Celtic received permission to defend the separate claim concerning alleged underpayment and over-deduction on Certificate 16. Celtic was ordered to pay Rok’s assessed costs of £10,500.

The judgment records earlier enforcement proceedings between the parties, reported as [2009] EWHC 2664 (TCC). This was a further first-instance enforcement application.