Sudlows Ltd v Global Switch Estates 1 Ltd
Citation: [2022] EWHC 3319 (TCC)
Abstract
Where a Claimant had made a Part 7 claim to enforce an adjudicator’s decision, and the Defendant had brought Part 8 proceedings for a declaration that the adjudicator had acted in breach of natural justice by finding that he was bound by certain findings made in an earlier adjudication, and that, consequently, the adjudicator’s alternative findings should be enforced, the court held that the adjudicator’s decision as to his jurisdiction was clearly wrong, and that the adjudicator’s alternative findings could be enforced.
Summary of Facts
The Claimant contractor, Sudlows Ltd (“Sudlows”) brought a Part 7 claim against the Defendant employer, Global Switch Estates 1 Ltd (“Global”) to enforce a decision of an adjudicator (“Adjudicator 6”) dated 9 September 2022 (“Adjudication 6”) that Global should pay Sudlows £996,898.24 plus VAT. The part 7 claim was resisted by Global.
Global brought Part 8 proceedings against Sudlows: first, for a declaration that, in making his decision, Adjudicator 6 acted in breach of natural justice by finding that he was bound by certain findings made by an earlier adjudicator (“Adjudicator 5”) in a previous adjudication (“Adjudication 5”); and second, to obtain enforcement of alternative findings made by Adjudicator 6 which would not be in favour of Sudlows but Global, to the extent that Sudlows would have to pay Global £209,053.01 plus VAT, interest and fees.
The underlying contract between Sudlows and Global was in JCT Design and Build 2011 form. The work relevant to these proceedings involved getting high-voltage cables through ductwork under a road. When Sudlows pulled the cables through the ductwork, one of the cables was damaged. Another set of cables was duly provided and pulled through by a different contractor. Sudlows then refused, it was alleged, to terminate, connect and then energise those cables. The result of Sudlows’ refusal was an ongoing delay in the completion of the cabling work and thus the enablement of the power to be supplied to the Site.
The two adjudications concerned claims by Sudlows for extensions of time (EOTs) for delays associated with the cabling work.
The Issues
The first issue was whether Adjudicator 6 was bound by the decision in Adjudication 5 in relation to the EOTs.
The second issue was whether Global could rely on the detailed alternative findings produced by Adjudicator 6.
Held – Mr Justice Waksman
The disputes referred to the two adjudications were not the same or substantially so. The fact that, in both adjudications, the same Relevant Events were in issue, was plainly insufficient to mean that in both adjudications, the dispute was the same or substantially so (para 70). Further:
- they related to underlying EOT’s for different periods of time,
- the dispute in relation to the new EOT sought involved new relevant materials and the event of testing which were not, and could not, have been part of the dispute leading to the prior adjudication, and
- this particular issue formed only one part of a much wider dispute between the parties as to the true value of the contract works as a whole.
Elements (a) and (b) alone would have sufficed (paras 70-71).
Adjudicator 6’s decision as to his jurisdiction, where he found that he was bound by Adjudication 5 in the material respects, was clearly wrong. First, the cases make clear that the jurisdictional question involves an analysis of what both disputes are about, and whether they are the same or substantially so. Adjudicator 6 did not apply that test at all. Second, he failed to give any real weight to the fact that the decision in Adjudication 5 related to an EOT for a prior period. Third, having said that both parties’ “arguments” had to be looked at in relation to the relevant “issue” he made no reference to the new material adduced before him (para 82). Accordingly, there was a consequent breach of natural justice and the principal decision in the later adjudication could not be enforced (para 83).
However, Adjudicator 6’s alternative findings, leading to a sum payable to Global, could be enforced because:
- The alternative findings were just as detailed as the primary findings,
- There would have been no point in Adjudicator 6 making them, nor in the parties agreeing that he should make them, if they were not to be regarded as binding (absent litigation or arbitration) if the primary findings fell away (para 86).
- Both parties agreed he should make those alternative findings and they were covered by the parties in their extensive submissions (para 88).
- It would go against the spirit of having adjudication decisions that reflected the true dispute before the adjudicator if the time spent considering the alternative findings were wasted (para 91).
Alexander Nissen KC acted for the defendant, instructed by Macfarlanes LLP. A copy of the judgment is available here.
