CG Group Ltd v Breyer Group Plc

An adjudicator may determine a broadly referred payment dispute by selecting a legal and contractual permutation arising from the parties’ submissions. A party cannot establish procedural unfairness merely because the adjudicator adopts a different calculation or construction from that expressly advanced by either party, provided the result is covered by the issues and arguments presented.

Challenges to enforcement based on jurisdiction or natural justice require a material breach. The court should respect the speed and provisional character of construction adjudication and intervene only in a clear or exceptional case. A party’s ability to deploy further arguments after seeing the adjudicator’s reasoning does not itself establish unfairness where those arguments could have been advanced on the issues already raised.

CG Group Ltd engaged Breyer Group Plc as main contractor’s sub-contractor for refurbishment works. Following disputes about valuation and payment, the parties agreed that CG would leave site without completing the works. They disagreed about the legal effect of that agreement and the payment regime applicable to CG’s final account.

An adjudicator decided that the sub-contract continued to apply, that the contractual payment provisions operated in combination with the statutory scheme, and that Breyer was required to pay the notified sum because it had not served the required notices. Breyer resisted enforcement, arguing that the adjudicator had exceeded his jurisdiction and breached natural justice by deciding the payment dates under a construction of the contract not argued by either party. The issue was whether that approach fell within the dispute and submissions referred to adjudication.

1. Enforcement ordered. The challenge failed and judgment was ordered for CG for the sums awarded by the adjudicator.
2. The adjudication concerned a broadly disputed claim for the net amount arising from CG’s Draft Final Account. That dispute included the effect of the parties’ agreement, the relevance of the sub-contract payment provisions, the possible application of the statutory scheme, and the validity and timing of payment notices. The adjudicator therefore had jurisdiction to decide what, if anything, was payable in relation to the account.
3. The exchanged submissions set the agenda for the adjudication. An adjudicator must address the referred dispute and the defences raised, but need not reproduce a party’s precise proposed route to the answer. Breyer had argued that the sub-contract payment terms prevailed if there were discrepancies. It was therefore open to the adjudicator to rely on clause 8(c) and clause 8(d), alongside the statutory scheme, in determining the payment dates.
4. A material breach of natural justice is required before enforcement will be refused. The fact that the adjudicator selected payment dates different from those advanced by CG did not make the process unfair. The adjudicator’s approach was a permissible permutation of the issues and arguments presented. The possibility that Breyer could have advanced additional arguments if it had anticipated the decision was immaterial.
5. The court endorsed the caution that adjudication enforcement should be resisted only where it is plain that the wrong question was decided or the adjudicator’s method was obviously unfair. Courts should avoid minute re-analysis of complex submissions and should recognise the time constraints and interim purpose of adjudication.