Ecovision Systems Ltd v Vinci Construction UK Ltd (Rev 1)

An adjudicator has no jurisdiction to determine which adjudication provisions govern his appointment or conduct where competing provisions make a material difference to the appointment mechanism, procedure or effect of the decision. The adjudication must be conducted under the correct contractual provisions or, where applicable, the statutory Scheme. A notice of adjudication or request for nomination need not identify the precise rules invoked unless the applicable rules so require; substantive validity depends on whether the correct rules were applied. A decision made under the wrong rules, or following an invalid appointment, is unenforceable. Strict compliance with contractual appointment deadlines is required. Allegations of apparent bias are assessed by asking whether a fair-minded and informed observer would see a real possibility of bias.

The claimant sought a declaration that an adjudicator’s decision concerning defective design of a ground source heating and cooling system was of no effect. The sub-contract incorporated NEC3 provisions, amendments from the main contract and potentially the Scheme for Construction Contracts, creating three possible adjudication regimes.

The defendant obtained the nomination of Mr Jensen by the RICS without identifying which regime applied. During the adjudication, Mr Jensen eventually proceeded under unamended Option W2. He decided in the defendant’s favour. The claimant contended that the TeCSA Rules governed the adjudication, that Mr Jensen had been appointed by the wrong body, that his appointment was one day late if Option W2 applied, and that his conduct gave rise to apparent bias. The central issues were the governing adjudication rules, the effect of the appointment irregularity and the alleged bias.

1. Declaration granted. Mr Jensen’s decision was unenforceable because he was appointed by the wrong body and purported to apply the wrong adjudication rules. The applicable regime was the TeCSA Rules incorporated through clause Z16 of the main contract amendments.
2. An adjudicator has no jurisdiction to determine his own jurisdiction where choosing between competing adjudication provisions makes a material difference to the appointment mechanism, the procedure or the status of the decision. The limited practical exception applies where the adjudicator’s conclusion coincides with the referring party’s contractual case and that case is correct.
3. The notice and nomination request were not invalid merely because they failed to identify the contractual or statutory source of the adjudication power. Neither the Scheme nor the contractual provisions imposed that formal requirement. Substantive validity depended on whether the correct rules had in fact been applied.
4. The sub-contract data deliberately left Option W2 unselected and incorporated the numbered documents in Appendix 1. Clause Z16 therefore replaced Option W2 with the TeCSA Rules. Clause 12.5 gave the numbered documents priority over the standard conditions. Clause 20A.2 concerned the transfer of main-contract obligations relating to the works and did not govern dispute resolution.
5. If Option W2 had applied, Mr Jensen’s appointment would also have been irregular because the RICS made the appointment on the fifth day rather than within four days. Strict compliance with the appointment procedure was required.
6. The decision was probably made in time. The initial direction given before receipt of the referral became operative on receipt of the referral, and the parties understood it as requiring a response within seven days. Under Option W2, the adjudicator could allocate the 14-day period for further information between the response and reply.
7. The apparent-bias allegation failed. Applying the fair-minded and informed observer test, Mr Jensen’s omissions and procedural approach did not establish a real possibility of bias. He could be appointed in any fresh adjudication, subject to the Chairman of TeCSA’s decision.
8. Any fresh adjudication would have to begin again, be conducted under the TeCSA Rules and, if the President or a Vice-President of the RICS was unavailable, involve appointment by the Chairman of TeCSA.