Science and Technology Facilities Council v MW High Tech Projects UK Ltd

A party may participate in an adjudication while reserving its right to challenge the adjudicator’s jurisdiction at enforcement. Agreement to the adjudicator’s appointment and payment of fees do not, without more, establish an election to treat the decision as valid. Whether an election has occurred is fact specific.

Contractual adjudication provisions must comply with the statutory requirements in section 108 of the Housing Grants Construction and Regeneration Act 1996. They need not reproduce the detailed timetable in the Scheme. A contractual right to refer a dispute at any time is not fettered by provisions concerning the appointment of named adjudicators where those provisions have no application.

The claimant sought summary judgment enforcing two adjudicator’s decisions awarding approximately £292,571, including interest and adjudication costs. The defendant challenged enforcement on the ground that the contractual adjudication provisions failed to comply with section 108 of the Housing Grants Construction and Regeneration Act 1996, so that the Scheme for Construction Contracts applied instead.

The defendant had agreed to the adjudicator’s appointment while expressly reserving its jurisdictional objections. It had also paid the adjudicator’s fees. The issues were whether those matters prevented a jurisdiction challenge at enforcement and whether clause 59 of the contract complied with sections 108(2)(a) and 108(2)(b).

1. Jurisdiction challenge preserved. The defendant’s correspondence, read as a whole, clearly reserved its right to challenge jurisdiction. Agreeing to the adjudicator’s appointment as a pragmatic step towards resolving the jurisdiction issue did not objectively demonstrate an intention to be bound by his decision on jurisdiction.
2. No election by payment of fees. Election or approbation and reprobation in adjudication is fact specific. Payment of fees may in some circumstances support an inference that a party treated the decision as valid, but it does not automatically produce that result. The defendant had not obtained a benefit comparable to the benefit obtained in PT Building Services Ltd v ROK Build Ltd. Its express reservation and the adjudicator’s term stating that fees remained payable even if the decision proved unenforceable preserved the challenge.
3. Section 108(2)(a). Clause 59(1), read with clause 59(3)(c), gave either party an unqualified right to refer a dispute to adjudication at any time. The later provisions concerned completion of appointments of persons named in the Abstract of Particulars. As the Abstract named nobody, those provisions did not fetter the right to adjudicate.
4. Section 108(2)(b). The Act required a timetable directed to securing appointment within seven days. It did not require the contractual timetable to reproduce the detailed timetable in the Scheme. Clause 59 complied with the statutory requirement.
5. The jurisdiction objections failed. The adjudicator’s substantive and costs decisions were enforceable, and the claimant was entitled to summary judgment. Costs were to be addressed after further submissions.

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