Arcadis UK Ltd v May and Baker (t/a Sanofi)

Citation: EWHC 87 (TCC)

Nature of case:

Arcadis was engaged as a contractor by May & Baker to carry out construction works.  The contract provided for defined “compensation events”, which affected the contract price.  May & Baker initially accepted that works on the northern boundary of the site were a compensation event.  Similar issues arose on the southern boundary, following which May & Baker withdrew its instructions and payment certificates relating to the northern boundary, and refused to accept that the southern boundary works were a compensation event.  Arcadis completed the works, and a dispute arose as to their entitlement to payment.  Arcadis submitted the dispute over the northern boundary works to an adjudicator, who held that May & Baker had not been entitled to withdraw their acceptance of the compensation event once the event had been implemented.  May & Baker honoured that decision.

Arcadis then submitted the southern boundary dispute to adjudication, arguing that the second adjudicator was bound by the decision of the first.  The second adjudicator agreed, on the condition that the compensation event had been properly implemented.  He found that it had not, but went on to find that the southern boundary works were a compensation event under the contract, and order May & Baker to adjust the contract price accordingly, deciding quantum by splitting the difference between Arcadis’ calculations and those of May & Baker.  May & Baker did not honour this decision, and Arcadis applied for summary judgment.  May & Baker argued that: the second adjudicator had taken an overly restrictive view of his jurisdiction; the adjudication was tainted by apparent bias, as he had been referred to the decision in the first adjudication; by splitting the difference on quantum, the adjudicator had decided the case on a basis not argued by either of the parties; and that the adjudicator had failed to consider part of its defence.

Giving judgment for Arcadis, Akenhead ruled that there was nothing improper in the adjudicator being referred to a previous decision on very similar issues, and nor was there anything improper in his approach to quantum.  On the facts, there was no basis for suggesting that the adjudicator had failed to consider part of May & Baker’s defence.

Link to Judgment

Counsel

William Webb

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