Skymist Holdings Ltd v Grandlane Developments Ltd

An adjudicator’s jurisdiction depends on the contractual or statutory route by which the appointment was made. It is insufficient that an adjudicator could have been appointed, or would ultimately have been appointed by the same body, if the wrong appointment procedure was used. The correct route is a matter of fact and contractual analysis. However, a jurisdictional challenge fails where the adjudicator did not find that the contract contained the disputed contractual nominating provision and his decision was consistent with appointment under paragraph 2(1)(c) of the Scheme for Construction Contracts (England and Wales) Regulations 1998. Approbation and reprobation requires a clear and unequivocal act, a benefit obtained from it, and a later act clearly inconsistent with it.

Grandlane referred a payment dispute to adjudication after Skymist terminated its development and project management services. Grandlane first sought nomination through the Chartered Institute of Arbitrators, relying on a draft deed containing a contractual nominating provision. After Skymist challenged that route, Grandlane withdrew the adjudication and obtained nomination through the RICS under paragraph 2(1)(c) of the Scheme for Construction Contracts (England and Wales) Regulations 1998.

The adjudicator decided the substantive payment dispute in Grandlane’s favour and rejected Skymist’s jurisdictional objections. Skymist brought a Part 8 challenge, arguing that the adjudicator had been appointed by the wrong body and that Grandlane had approbated and reprobated the draft deed. The central issues were whether the adjudicator’s appointment was valid and whether Grandlane was precluded from relying on its chosen route.

1. Claim dismissed. The adjudicator’s decision was not a nullity for want of jurisdiction.
2. The relevant contractual route for appointing an adjudicator depended on whether the contract contained a provision naming a particular nominating body. Paragraph 2(1)(b) of the Scheme for Construction Contracts (England and Wales) Regulations 1998 applied where such a contractual provision existed. Where it did not, paragraph 2(1)(c) required the referring party to request an adjudicator nominating body to select the adjudicator.
3. The fact that an adjudicator would have been appointed in any event, or would have been appointed by the same body under another route, did not cure use of the wrong procedure. The validity of the nomination went to jurisdiction. The correct route, however, was a matter of fact and analysis in each case. The court distinguished Ecovision Ltd v Vinci Construction UK Ltd [2015] EWHC 587 and applied the limiting principle illustrated by RMP v Chalcroft Ltd [2015] EWHC 3737.
4. Read objectively and as a whole, Grandlane’s notice and referral did not rely on the draft deed as a complete contract containing the disputed nominating clause. The adjudicator had not decided that the draft deed governed the parties’ relationship or that it included that clause. His findings on the payment claims could be reached from terms common to the parties or independently of the draft deed. His decision was therefore consistent with nomination under paragraph 2(1)(c).
5. The court accepted, subject to an assumption that the doctrine could apply in this contractual context, the requirements of approbation and reprobation: the approbating act must be clear and unequivocal; the party must obtain a benefit from it; and the later reprobating act must be clear and unequivocally inconsistent with the earlier act. The principles were drawn from PT Building Services Ltd v ROK Build Ltd [2008] EWHC 3434 and Banque des Marchands de Biens v Kindersley [1951] 1 Ch 112.
6. Grandlane had neither clearly approbated the draft deed as a whole nor obtained a relevant benefit from the alleged approbation. Its claim that the adjudicator’s decision was temporarily binding did not amount to approbation of the disputed clause. The alternative approbation argument therefore also failed.