Equitix ESI CHP (Sheff) Ltd v Veolia Energy & Utility Services UK Plc

Contractual dispute-resolution provisions must be construed as a whole. Where a contract creates a specific and mandatory procedure for interface disputes, a general parallel-liability clause does not exclude that procedure without clear wording. Separate contractual dispute-resolution streams may therefore operate concurrently.

A requirement for adjudicators to be experts in the field of a specialist industry is not necessarily limited to persons with technical qualifications. In a dispute-resolution context, it may include lawyers and other professionals with substantial experience of disputes concerning that industry.

Equitix owned a biomass energy facility operated and maintained by Veolia. Veolia notified alleged defects said to arise from Kantor’s works. Equitix served notices under the parallel-liability provisions of the operation and maintenance contract and sought declarations that Veolia could not use the interface adjudication procedure in Schedule 8, Part 3.

Equitix also challenged appointments made by the President of the Chartered Institute of Arbitrators, arguing that the appointees were not technical experts in biomass energy plants. The issues were the interaction between the contractual procedures and the meaning and legal effect of the expert-appointment requirement.

1. Declarations refused. The Part 3 adjudication procedure in Schedule 8 was mandatory for disputes arising under Parts 1 and 2, including disputes whether an alleged defect was a defect. It expressly operated in place of the general procedure in clause 38.
2. The contract had to be read as a whole. Clauses 7.3 and 7.5 to 7.11 did not contain wording making the Part 3 procedure subject to clause 7.5. The references to clause 38 in clause 7.5 did not exclude Part 3, because clause 38 itself was subject to Schedule 8.
3. The better construction was that two dispute-resolution streams could operate at the same time. Clauses 7.5 to 7.11 remained effective for parallel liabilities outside the specific interface regime. They did not deprive Veolia of its right to pursue an interface adjudication.
4. The phrase “experts in the field of biomass energy plants” did not require technical expertise in the narrow sense advanced by Equitix. Context included the appointment of adjudicators and the range of disputes likely to arise, including performance, health and safety, remedial costs and damages. The phrase could include professionals with relevant dispute-resolution expertise.
5. The President had complied with his instructions. The appointees were capable of falling within the contractual description. Even if rationality review applied, the appointments were not irrational or Wednesbury unreasonable.

First-instance decision. The judgment records an earlier limited interim injunction which was discharged by Stuart-Smith J on 24 January 2019.