AMD Environmental Ltd v Cumberland Construction Company Ltd

In adjudication enforcement proceedings, a dispute will ordinarily crystallise when a claim has remained unaccepted for a reasonable period. Outstanding particulars do not postpone crystallisation where the paying party can evaluate the claim and form a view of its likely value. Only a genuinely nebulous or ill-defined claim may justify a different conclusion.

An adjudicator has wide leeway to request further information. The provision of information during the adjudication does not ordinarily create a jurisdictional or natural justice defect, although it may affect costs.

An adjudicator’s decision remains enforceable if the adjudicator has generally addressed the question referred, even if the reasoning or conclusion is wrong. A failure to address an issue will ordinarily matter only if it was deliberate and material.

AMD Environmental Ltd sought summary judgment under CPR Part 24 to enforce an adjudicator’s decision concerning the final account under a mechanical and electrical works subcontract with Cumberland Construction Company Ltd.

Cumberland challenged enforcement on the grounds that no dispute had crystallised when the notice of adjudication was served, that the claim had been insufficiently particularised, that the adjudicator’s request for further information breached natural justice, and that the adjudicator had failed to address submissions concerning three variations.

The court considered whether those objections deprived the adjudicator of jurisdiction or made the decision unenforceable.

1. Enforcement granted. AMD was entitled to enforce the adjudicator’s decision. The court ordered payment of £109,408.55 including VAT, together with £1,679.72 interest.
2. The crystallisation challenge was unavailable because Cumberland had accepted the adjudicator’s ruling on crystallisation and had not adequately reserved its right to raise the point later. Its correspondence treated the adjudicator as having jurisdiction, applying Nordot Engineering Services Ltd v Siemens PLC [2001] CILL 1778-1779 and the guidance in Allied P&L v Paradigm Housing Group Ltd [2009] EWHC 2890 (TCC).
3. In any event, the dispute had crystallised. Eight months of detailed exchanges and Cumberland’s settled valuation showed a dispute. A paying party must evaluate a claim promptly despite requests for further particulars. Particularisation disputes are ordinarily part of the overall dispute and cannot be used to postpone adjudication indefinitely. The exceptional principle identified in Amec Civil Engineering Ltd v Secretary of State for Transport [2004] EWHC 2339 (TCC) did not apply because the claim was not nebulous or ill-defined. The court agreed with Gibson (Banbridge) Ltd v Fermanagh District Council [2013] NIQB 16.
4. The adjudicator was entitled to request information considered important to the decision. Its provision during the adjudication did not affect jurisdiction or natural justice. The court regarded any possible late provision as potentially relevant to costs only.
5. The principles summarised in Pilon Ltd v Breyer Group PLC [2010] EWHC 837 (TCC) applied. An adjudicator must attempt to answer the question referred. A deliberate failure caused by an erroneously restrictive view of jurisdiction may make a decision unenforceable. An inadvertent failure to address one issue among many will not ordinarily do so, and any failure must be material.
6. The adjudicator had considered Cumberland’s submissions on the three variations. Reaching conclusions contrary to Cumberland’s case was not equivalent to ignoring its submissions. There was no evidence of a deliberate or inadvertent failure, and no material breach of natural justice had been established. The court also awarded interest at 6% and indemnity costs because the enforcement challenge was without merit.