Eurocom Ltd v Siemens Plc

A fraudulent representation made in an application to an adjudicator-nominating body may invalidate the nomination and deprive the adjudicator of jurisdiction. The fraud need not have deceived the nominating body. It is sufficient that the representation materially affected, or improperly limited, the nomination process.

Parties to a construction contract are subject to an implied obligation to act honestly when seeking an adjudicator’s nomination. A nominating body is not ordinarily required, as a matter of natural justice, to consult the responding party before making its nomination.

An adjudicator cannot decide again matters determined in an earlier adjudication. Whether claims are the same or substantially the same is a question of fact and degree. Any genuinely new elements must be severable if partial enforcement is sought.

Eurocom sought summary judgment to enforce an adjudicator’s decision awarding it £1,521,313.75 plus interest in a second adjudication concerning its sub-contract with Siemens for communications systems at underground stations.

Siemens resisted enforcement on grounds including an invalid appointment, duplication of matters decided in a first adjudication, procedural unfairness and the need for a stay. The first adjudication had resulted in a net amount payable by Eurocom to Siemens. The central issues were whether Eurocom’s application to the RICS had falsely represented that certain adjudicators had conflicts of interest, whether the second adjudication revisited matters already decided, and whether the adjudicator’s procedure breached natural justice.

1. Appointment. The application form’s wording plainly represented that the named adjudicators had conflicts of interest. The evidence established a very strong prima facie case that the representation was deliberately or recklessly false, including in relation to the adjudicator who had acted in the first adjudication.
2. A material fraudulent representation made in applying to an independent adjudicator-nominating body invalidates the nomination process. The application is treated as void, whether or not the nominating body was deceived. The improper limitation of the pool of candidates was sufficient causation. The appointment was therefore a nullity and the adjudicator lacked jurisdiction.
3. There was also an alternative contractual basis. The parties were subject to an implied term not to act dishonestly in seeking a nomination. Breach of an adjudication process going to the heart of the appointment may deprive the adjudicator of jurisdiction.
4. The RICS’s failure to provide Siemens with the application form did not itself breach natural justice. The nominating body’s role was limited to exercising its nomination discretion, within the statutory framework and short timetable.
5. Overlap. The second adjudication revisited variation, management, protection-master, extended-working and subcontractor claims already decided in the first adjudication. The distinction between an interim and final account was unsupported by the sub-contract. An adjudicator cannot give a party a second bite at the same claims. The new elements were not severable from the overlapping claims.
6. The adjudicator’s procedure did not breach natural justice. Although the timetable was demanding, Siemens had been able to respond to the material and to the late question concerning clause 6.2.
7. Eurocom’s application for summary judgment was dismissed. Siemens had real prospects of successfully defending enforcement. Had enforcement otherwise been appropriate, a stay would probably have been granted because Eurocom was unlikely to repay the judgment sum.

First instance decision. No appellate history is stated in the judgment.