SUDLOWS LIMITED v GLOBAL SWITCH ESTATES 1 LIMITED

In adjudication enforcement proceedings, a later adjudicator is bound only where the later dispute is the same, or substantially the same, as the dispute previously decided. The comparison requires analysis of the scope of both referrals and decisions. Different periods, new evidence or events, and a materially wider payment dispute may establish a new dispute, even where the same alleged contractual events arise.

A finding in an earlier adjudication is binding if it formed an essential component or basis of the award. A later adjudicator who wrongly treats a new dispute as previously decided acts in breach of natural justice. However, detailed alternative findings made with the parties’ agreement may be severed and enforced when the primary decision is unenforceable.

Sudlows sought summary judgment to enforce an adjudicator’s decision awarding it £996,898.24 plus VAT following the sixth adjudication between the parties. Global resisted enforcement and brought Part 8 proceedings, alleging that the adjudicator had wrongly treated findings in the fifth adjudication as binding and had thereby breached natural justice.

The fifth adjudication concerned an extension of time for an earlier period ending on 18 January 2021. The sixth concerned a further period ending on practical completion, together with a final payment valuation. Global relied on subsequent cable testing and two later expert reports. The adjudicator made primary findings in Sudlows’ favour and detailed alternative findings awarding Global £209,053.01 plus VAT if his jurisdictional conclusion was wrong.

1. Applicable principles. Section 108(3) of the 1996 Act and paragraphs 9(2) and 23(2) of the Scheme make an adjudicator’s decision binding until finally determined. A dispute cannot be referred again if it is the same or substantially the same. The extent of the binding effect depends on the scope of the earlier referral and decision. Whether disputes are substantially the same is a question of fact and degree.
2. Adjudications 5 and 6. The fifth adjudication concerned an extension of time for a period ending on 18 January 2021. The sixth concerned a later period, a final payment application and the true value of the works. Global relied on the subsequent successful testing of replacement cables and two RINA reports, material which did not and could not have existed for the fifth adjudication. Those matters materially affected the merits. The disputes were therefore not the same or substantially the same.
3. Essential findings. The earlier adjudicator’s findings about Relevant Events formed building blocks of the earlier extension-of-time decision, rather than being irrelevant reasoning. But that did not make those findings binding for all future periods and purposes. The later adjudicator therefore had jurisdiction to determine the new dispute and to assess the new material.
4. Enforcement. The later adjudicator’s primary decision was based on the mistaken view that he was bound by the fifth adjudication. That jurisdictional error constituted a breach of natural justice, so the primary award could not be enforced. The alternative findings had been fully reasoned, addressed in the parties’ submissions, and made by agreement as a substitute if the primary conclusion failed. They constituted an enforceable alternative decision notwithstanding their omission from the formal Decision section. The alternative findings awarding Global £209,053.01 plus VAT were therefore enforced. Consequential matters were left for further determination.

First-instance decision. The judgment records earlier adjudications between the parties but no appeal from a lower court decision.