This is a claim by AMEC to enforce, by way of summary judgment, an adjudicator’s decision dated 24th December 2009 for just less than £1 million. The claim originated in a Framework Agreement dated February 2005, pursuant to which AMEC were engaged by TWUL to carry out construction and maintenance work. Each separate package of work was the subject of a separate order, referred to in the papers as a “works order” or “works contract”. There were apparently over 300,000 such orders/contracts let under the Framework Agreement.

In response to this claim for summary judgment, TWUL rely on a variety of separate reasons why the adjudicator’s decision should not be enforced. There are three lever arch files of documents and two files of authorities. The submissions of the parties extended to a detailed analysis of the submissions in the adjudication as well as the inter partes correspondence. In my judgment, that kind of detailed analysis is not appropriate on an application to enforce an adjudicator’s decision, just as it would not be appropriate on an application for permission to appeal against an arbitrator’s award under section 69 of the Arbitration Act 1996 . I would add that, at least in general terms, the greater the detail that a defendant invites the court to consider in resisting an application of this kind, the less likely it must be that it is the kind of “plain case” necessary to avoid enforcement.

I propose to deal with the issues that arise on this application in this way. First, I set out the details of the Framework Agreement (Section B below) and a brief chronology (Section C below). At Section D I set out some general principles relating to the enforcement and adjudication decisions.

Thereafter, I deal with the various reasons put forward by TWUL as to why the decision in this case should not be enforced in the following sequence:

There are two final areas of argument: an issue as to approbation and reprobation, and a point about severability. I address these in Section H below. There is a short summary of my conclusions at Section I below. Although the range of matters raised on this application has made it feel rather like an exam question or an obstacle course, I should express my thanks to both leading counsel for their considerable assistance.

The parties entered into a Framework Agreement in February 2005. Section A comprised the Form of Agreement and a number of annexures. Section B comprised the specification, and Section C constituted the conditions of the works contracts. Clause 2 of Section A recorded the basic agreement between the parties in these terms:

Annex 1 contained a list of documents constituting the Framework Agreement. This included extracts from the tender summary letter of 19th January2005 which contained details of rates, start-up payments and the like.

Annex 2 was entitled “Terms Governing The Agreement And Any Contracts”. They were the important terms governing the performance of the Framework Agreement. Two parts of Annex 2 are particularly relevant for these purposes: clauses 9 and 12.

Clause 9 set out a detailed payment mechanism which included the following:

Clause 12 set out the adjudication procedure incorporated within the Framework Agreement. It was in this form:

It is convenient here just to identify the relevant parts of the ICE adjudication procedure expressly referred to in clause 12. The general principles set out at clause 1.1 of the procedure include the following:

Section C of the Framework Agreement set out the conditions of contract to be entered into by the parties in respect of each works order. Clause 2 of Section C provided that each works contract would consist of both these conditions, and the Framework Agreement to which I have previously referred.

As to payment, clause 19.2 of Section C provided that:

The parties are agreed that the Framework Agreement itself was not a construction contract within the meaning of the 1996 Act. The myriad works contracts did fall within that definition.

From February 2005, pursuant to the Framework Agreement, TWUL requested AMEC to carry out extensive works, both in South London and in an area of operations known as ‘North London District 21’. AMEC were paid in accordance with the Schedule of Rates, which was adjusted by agreement between the parties, all as envisaged by the Framework Agreement.

Disputes arose between the parties. AMEC claimed that they were not being paid in accordance with the Framework Agreement. By Application 57, AMEC made an aggregated claim for sums due across a wide range of works contracts, as envisaged by clause 9.1.1 of Annex 2 to the Framework Agreement (paragraph 9 above). On 6th October 2009 TWUL served an aggregated withholding notice pursuant to clause 9.5 of Annex 2, setting out various alleged set-offs and defences to the claims that had been made by AMEC.

On 30th October 2009 AMEC served a notice of adjudication in respect of their outstanding claims. This was designed to challenge the validity of many of the set-offs and defences set out in the withholding notice. Mr. Don Rodgers was appointed as the adjudicator.

The notice of adjudication is the document in which the dispute being referred is identified. It therefore forms the basis of the adjudicator’s jurisdiction: see clause 2.1 of the ICE adjudication procedure and Mecright Limited v. TA Morris Development) Limited (unreported; 26th June 2001 (TCC)). Paragraph 3.1 of the notice of adjudication is in this form:

On 24th December 2009, the adjudicator produced a written decision in which, having taken account of AMEC’s claims and TWUL’s cross-claims, he awarded AMEC £959,907.67 to be paid by 6th January 2010. He also made provision for the payment of his fees. A sum of £189,744.42 plus VAT has been paid by TWUL to AMEC but no other sums have been paid pursuant to the adjudicator’s decision.

On 29th January 2010, AMEC commenced these proceedings, seeking the sum awarded by the adjudicator plus VAT and interest, and the adjudicator’s fees. The total sum sought was £1,169,991.50. From that falls to be deducted the sum paid to date, identified in paragraph 19 above. The net sum sought by AMEC in this application is therefore £947,041.81 together with interest in the sum of £3,113.76, making a total of £950,155.57.

The general principles governing an enforcement application of this sort are well-known:

There was some debate in the papers in this case about the possible differences between an adjudication under the 1996 Act, and an adjudication occurring pursuant to a series of express contractual provisions. There was a suggestion that, because this was a contractual adjudication, different rules applied on enforcement. Although it was not expressly referred to by either counsel, the decision of His Honour Judge Thornton QC in Steve Domsalla (trading as Domsalla Building Services) v. Kenneth Dyason [2007] EWHC 1174 (TCC) might be taken as providing some support for that proposition. In similar vein, in his second statement, AMEC’s solicitor, Mr. Radford, said that, because this was a contractual adjudication, the court did not have jurisdiction “to decide whether the adjudicator’s decision that the claimant is currently seeking to enforce was right or wrong”.

In my judgment, that passage misunderstands the status of an adjudicator’s decision. Whether that decision is issued pursuant to the 1996 Act, or by reference to a contractual adjudication mechanism, such a decision is temporarily binding. As a result, on an application to enforce, the court is not permitted to investigate whether the decision was right or wrong: indeed, such considerations are irrelevant. All that matters is whether the adjudicator had the jurisdiction to reach the decision that he did, and that he reached it by a fair process, making every allowance for the strict time constraints imposed in adjudication.

There is therefore no difference in principle in the status of a decision provided by an adjudicator pursuant to the 1996 Act, and a decision provided pursuant to a contractual mechanism. Indeed, in the vast majority of cases even that is a distinction without a difference, because both types of decision are produced pursuant to a contractual mechanism. The former is the product of the implied terms referable to the 1996 Act (otherwise known as the Scheme for Construction Contracts, referred to below as “the Scheme”), whilst the latter is created by express terms. There is no difference in the status or enforceability of the resulting decision, and there is nothing in any decision by the Court of Appeal to suggest otherwise. The only potential difference would be a matter of emphasis only, such as where the rules to which a contractual adjudication may be subject expressly permit a particular procedural step, or grant the adjudicator a specific power, which would not otherwise be regarded as typical or implied by the Scheme. But that, so it seems to me, is as far as any potential difference may go.

TWUL’s principal challenge as to jurisdiction is that the dispute that was referred to the adjudicator did not arise under the Framework Agreement, but under the numerous individual works contracts instead. TWUL therefore argue that, because the adjudicator was appointed under the Framework Agreement, and conducted the adjudication accordance with the ICE procedure referred to there, he had no jurisdiction.

It seems to me that that argument must fail for two separate reasons.

First, it seems to me that the dispute that arose between the parties was about the validity of AMEC’s claim, pursuant to Application 57. That application arose pursuant to clause 9.1.1 of the Framework Agreement (paragraph 9 above). The claim also can be said to have arisen under clause 19.2 of the works contracts (paragraph 13 above), which clause also referred expressly back to the Framework Agreement. It seems to me, therefore, that AMEC’s claim for payment arose plainly under the Framework Agreement.

Equally, the dispute was also concerned with the validity or otherwise of the withholding notice served by TWUL on 6th October 2009, and which essentially constituted their defence to the claims made. As we have seen, that was a notice served pursuant to clause 9.5 of Annex 2 of the Framework Agreement (paragraph 9 above). Thus the defence to this claim also arose expressly by reference to the terms of the Framework Agreement.

Secondly, if that were in any way doubtful, I note that clause 12.2 of the Framework Agreement imposed the contractual adjudication mechanism on “any dispute or difference arising out of or in connection with this Agreement”. The expression “in connection with” is to be given a very wide application and denotes any link at all: see Ashville Investments Limited v. Elmer Contractors Limited [1989] QB 488. In my judgment, it is beyond argument that the dispute about Application 57, and the withholding notice that is relied on in support of the defence to that application, arose ‘in connection with’ the Framework Agreement.

I should add for completeness that, if the relevant contract was not the Framework Agreement, but the works contract(s), that of itself did not necessarily deprive the adjudicator of jurisdiction (although there would probably be other difficulties). Clause 2 of the conditions of each works contract (Section C of the Framework Agreement), provided that the Framework Agreement would be incorporated into the works contract. Thus, provided that those contracts contained no different dispute resolution mechanism, the mechanism at clause 12 of the Framework Agreement (adjudication in accordance with the ICE procedure) would also be incorporated into the works contracts. That could also have given the adjudicator the necessary jurisdiction, although there might well be a different problem relating to the reference of multiple disputes. I deal with that point in paragraphs 36 to 38 below.

Mr. Speaight maintained that clause 12.4 of the Framework Agreement envisaged that the works contracts would or might have a separate disputes resolution procedure, and that disputes arising in relation to those individual works contracts should be decided by reference to that (different) procedure. It seems to me that there are two separate difficulties with that analysis. The first is that it ignores clause 9 of the Framework Agreement, and clause 19 of the works contract, both of which point inexorably back towards a dispute arising out of an aggregated application and/or an aggregated withholding notice, which dispute could only be resolved by the adjudicator appointed under the Framework Agreement.

Secondly, the works contracts did not have an express and separate dispute resolution provision. Thus, the argument would have to be that the works contracts contained, by way of implication, the Scheme. But the case for the implication of the Scheme would be very difficult, because the express terms at clause 12 of the Framework Agreement were incorporated into each works contract, and already provided for a particular dispute resolution mechanism in accordance with the ICE procedure.

It is also important to note that both parties acted pursuant to clause 9 by, respectively, making an aggregated application for sums due, and providing an aggregated withholding notice in response. Clause 12 of the Framework Agreement envisaged that one adjudication would deal with the dispute that arose. If TWUL were right, the effect of clauses 9 and 12 would be bypassed altogether, and instead the validity of any aggregated application or withholding notice could never be dealt with in a single adjudication. Instead, there would have to be hundreds of separate adjudications, each for a trifling sum, each arising under an individual works contract. It seems to me that that was not what the parties agreed in the Framework Agreement and it would not give rise to a solution that could be described as commercially sensible.

For all those reasons, I conclude that the dispute arose in this case under the Framework Agreement, and that accordingly the adjudicator was properly appointed and had jurisdiction to deal with the dispute that was referred to him. The principal jurisdiction challenge therefore fails.

TWUL also submitted that the ICE procedure did not comply with the 1996 Act, but the parties were agreed that if I decided, as I have, that the dispute arose under the Framework Agreement, then the parties were at liberty to agree the adjudication provisions set out in Clause 12 which incorporated the ICE procedure. On my findings, the 1996 Act is therefore irrelevant and this jurisdictional challenge does not now arise.

Similarly, TWUL’s other argument, that the adjudicator wrongly decided more than more dispute, would only arise at all if the dispute had not arisen under the Framework Agreement, but under the numerous works contracts. The argument would then be that, in such circumstances, where there were hundreds, if not thousands, of separate disputes, the adjudicator did not have the power to consider them in a single adjudication. Again, that does not expressly arise here, because of my finding that there was one dispute under the Framework Agreement.

I should add that, if I had concluded that the dispute(s) had arisen under a series of works contracts, then the multiple dispute point would probably have been successful, despite the fact that this is not historically a fertile ground for challenge

One of the very few reported cases where this ground of challenge was upheld, Grovedeck v. Capital Demolitions Limited [2000] BLR 181, involved claims for work on two separate sites. The judge’s comments were in any event obiter, because he had already decided for other reasons that the adjudicator did not have the necessary jurisdiction.)

Here if (contrary to my view) the disputes had arisen under a whole series of different works contracts, then that would seem to me to be a plain example of more than one dispute having being referred to the same adjudicator, and would therefore have fallen outside the 1996 Act: see, in a slightly different context, Enterprise Managed Services Limited. v. Tony McFadden Utilities Limited [2009] EWHC 3222 (TCC). But that probable result only serves to highlight the commercial practicalities that these parties embraced when they agreed, at clause 9 of the Framework Agreement, to serve aggregated applications and aggregated withholding notices, and agreed at clause 12 to adjudication under the Framework Agreement. As I have indicated, any other result would prevent any sort of meaningful adjudication.

Accordingly, for all those reasons, the jurisdictional challenge fails. The adjudicator had the jurisdiction to reach his decision of 24th December 2009.

TWUL say that the Adjudicator failed to deal with the adjudication, certainly in its latter stages, in a way that was in accordance with the rules of natural justice. They put this argument in a number of different ways but essentially it comes down to three points:

I address those points by setting out in rather more detail the procedural history of the adjudication (section F2 below); then I address the legal principles referable to natural justice generally and size and complexity in particular (section F3 below); and then I analyse at section F4 below the complaints about size and complexity and the further response. I deal separately in Section G with the particular issue about the streetworks.

The referral notice was served by AMEC on 13th November 2009. This meant that the 28 days for the adjudicator’s decision, as referred to in the ICE procedure, expired on 11th December 2009. The principal part of the referral notice, including sections 9, 10 and 11, was given over to AMEC’s complaints about the validity of the withholding notice generally and, in particular, the sum of £918,534.47 withheld by TWUL in relation to streetworks. AMEC alleged, amongst other things, that TWUL had wholly failed to justify or substantiate many of the individual cross-claims relied on in the withholding notice. The referral notice contained, at appendix 8, a detailed response to those individual cross-claims.

Although, on 20th November 2009, TWUL took the jurisdiction point that I have addressed in Section E1 above, the adjudicator correctly rejected it and continued with the adjudication. TWUL next threatened that their response would be supported by 200 files and database called Kearynet, concerned with remedial works. In the event, on 27th November 2009, the response was served, together with 50 lever arch files. Those files were not the subject of any cross-referencing in the response itself. Neither was there any cross-referencing to the Kearynet system.

There is no doubt that TWUL’s response, and the 13 appendices attached to it, comprised an extensive statement (amongst other things) in support of the withholding notice. Some of the appendices contained details of the defects complained of, together with photographs and the like. It is clear from the papers that much of this material, certainly in that form, was new and had not been provided to AMEC before.

On 1st December 2009, in response to a request from the adjudicator, AMEC agreed to extend time by seven days, so that his decision had to be produced by 18th December. At a meeting on 8th December with the adjudicator, fixed in order that the Kearynet system could be demonstrated to him, the adjudicator asked for further time, and there was an agreement that time would be extended again by six days, to 24th December 2009. The documents also demonstrate that, at this meeting, TWUL accepted that at least some of the items in the withholding notice had been incorrectly deducted.

The extension to 24th December 2009 was clearly based on the understanding that AMEC’s reply to TWUL’s response was going to be a significant document. In the circumstances it seems to me that this was unsurprising. In an adjudication where a contractor challenges a withholding notice, on the grounds that the employer has not properly substantiated the items being withheld, it is almost inevitable that the employer will seek to make good any alleged gaps when he serves his response. Consequently, the reply served by the contractor thereafter provides him with his first (and last) opportunity to put in a detailed defence to those items that had not previously been substantiated, or had been the subject of modification or clarification in the employer’s response. That is an important and inevitable step in the adjudication process. Accordingly, I do not consider that AMEC’s reply in the present case was anything other than an ordinary, even mundane, step: contrary to the points made by TWUL’s solicitors in the correspondence to the adjudicator, I do not regard it as some form of tactical manoeuvre.

The reply was extensive and dealt in detail with the issues of substantiation. In respect of the streetworks cross-claim, AMEC pointed out at Section 6 that:

On 14th December 2009, TWUL complained about the extensive nature of AMEC’s audit. On the following day they wrote to the adjudicator and, amongst other things, asked these express questions:

TWUL sought permission to put in a further response and AMEC objected to that application. On the same day, 15th December 2009, the Adjudicator sent a rather weary e-mail to both parties in these terms:

TWUL did put in a further response on 21st December 2009. It came with 15 appendices. It appeared to be comprehensive, in that there was nothing on the face of the further response that suggested that further information would have been made available had further time been available. The further response took issue with much of AMEC’s audit.

The adjudicator’s decision was provided on 24th December 2009. It consisted of 28 closely-typed pages. Although the ICE procedure did not oblige the adjudicator to give reasons, the parties had agreed that the adjudicator should provide reasons. The more general parts of the decision included the following paragraphs:

At Section 9 of the decision, the adjudicator dealt with the streetworks cross-claim, identifying correctly the £981,534.47 claimed by TWUL in that connection. He then went on to analyse in detail the five ‘big ticket’ items that comprised the streetworks cross-claim.

At Section 10 the Adjudicator totalled up the sums which he concluded TWUL were entitled to deduct from AMEC. This included a total sum of around £220,000-odd in respect of the streetworks (ie a sum larger than the figure admitted by AMEC: see paragraph 47(c) above). At paragraph 12.2, he deducted the total from the sums otherwise due to AMEC and arrived at a net figure in AMEC’s favour of £959,907.66. That calculation formed the basis of his decision. The adjudicator also did a separate calculation of a figure of £923,778.38 which, he said, TWUL were not entitled to deduct from sums due to AMEC. As Mr. Speaight correctly pointed out, the adjudicator would have erred if he had awarded that figure to AMEC, because that figure had to be deducted from the £1.7 million-odd which made up TWUL’s gross cross-claim, not the £1.3 million that had been claimed by AMEC originally. However, the adjudicator did not in fact utilise the £923,778.38 figure and it formed no part of his final decision.

The authorities establish the following general principles concerning the interplay between adjudication and natural justice:

In advancing this part of his argument, Mr. Speaight relied on remarks by His Honour Judge Toulmin CMG QC in AWG Construction Services Limited v. Rockingham Motor Speedway Limited [2004] EWHC 888 (TCC) where, following the decision of His Honour Judge Wilcox in London and Amsterdam Properties Limited v. Waterman Partnership Limited [2004] BLR 179, the judge wondered whether there might be claims which were so big and so complicated that they were inherently unsuitable for adjudication. However, as Mr. Speaight very properly acknowledged, in CIB Properties Limited v. Birse Construction Limited [2005] 1 WLR 2252 the same judge said that his earlier view had been “erroneous”. He went on to say:

In a subsequent passage in the same judgment relied on by both counsel, Judge Toulmin identified the point in these terms:

In a more recent case concerned with a similar issue, HS Works Limited v. Enterprise Managed Services Limited [2009] BLR 378, Akenhead J pointed out that no enforcement application had ever failed simply because of the size of the claim originally referred. He said that what was important was:

At paragraph 56 of the same judgment Akenhead J said this:

I should add for completeness that, although I was referred to my own decisions in William Verry Limited v. Furlong Homes Limited [2005] EWHC 138 (TCC) and Enterprise Managed Services v. Tony McFadden, I do not consider that they add any points of principle to the cases I have already cited.

In my judgment, therefore, the law on this subject can be summarised as follows:

It follows from my summary of the principles that size/complexity will not of itself be sufficient to found a complaint based on a breach of natural justice. Thus, the question becomes that set out at paragraph 173 of the judgment in Birse. Those questions in the present case can be answered by reference both to the specific criticisms of unfairness that TWUL made, and by reference to more general considerations.

TWUL’s specific criticism under the label of breach of natural justice is to the effect that the adjudicator failed to have regard and/or sufficient regard to their further response dated 21st December 2009 and was thus in breach of the rules of natural justice. In my judgment, that argument fails at each stage.

First, I consider that the adjudicator was not obliged to consider the further response in any detail. I do not go as far as to say that he could ignore it altogether, principally because of his letter of 15th December 2009 (referred to in paragraph 49 above) which invited ‘final submissions’. However, it seems to me that, in view of the fact that the further response was provided just over two days before he had to complete his final decision, the adjudicator was not acting in breach of natural justice if he simply glanced at the material that it contained, to see its general nature and to see if it contained anything of real significance.

I say that because, in my judgment, in an adjudication with a tight timetable, an adjudicator is not obliged to consider in detail a second round submission or pleading, served very late in the adjudication process. His overriding obligation is to complete his decision within the time limit. If that means that he cannot read or digest in detail a document provided just over two days before that decision had to be finalised and provided to the parties, then that is simply one of the consequences of the adjudication process. In adjudication, a requirement to consider every round of the parties’ submissions in detail, which might be required of a judge or an arbitrator pursuant to the rules of natural justice, will always be tempered by the adjudicator’s overriding obligation to comply with the time limits.

As has been pointed out elsewhere, it is becoming very common for parties in adjudication to believe that they are in some way entitled to respond to every submission put in by the other party. In my view, unless the contract or the relevant adjudication rules expressly permit it, they do not have such an entitlement. Adjudication is not intended to resolve disputes by reference to innumerable rounds of submissions or pleadings.

A recent example of this in practice can be found in the decision of Ramsey J in GPS Marine Contractors Limited v. Ringway Infrastructure Services Limited [2010] EWHC 283 (TCC). That was another adjudication enforcement dispute where numerous points were taken and the judgment runs to over 100 paragraphs. There, one of the issues was the adjudicator’s refusal to have any regard at all to a rejoinder, i.e. like the further response here, a second submission document served by the respondent party and, also like the further response here, served two days before the decision was due. Ramsey J held at paragraph 106 of his judgment that “in the context of a rapid summary procedure leading to a temporarily binding decision, the adjudicator was entitled to and needed to limit the number of rounds of submissions”. There the period simply did not allow the responding party to serve a further document. That ground for challenge was therefore dismissed.

In addition on this aspect of TWUL’s challenge, I note for completeness that there was no provision in the ICE procedure that allowed for a further response from the responding party, just as there is no express provision in the Scheme which permits the responding party a second opportunity to address the points made by the claiming party. Indeed, that would be, amongst other things, contrary to the usual rules of civil litigation, which allow a claiming party to have the last word.

Secondly, I find as a matter of fact that the adjudicator did have regard to the further response. The allegation that he did not do so is based upon the fact that, at paragraph 4 of his decision, under the heading “Procedural Matters”, he made no reference to the further response. But it seems to me that it is incorrect to say that, because the document is not mentioned there, I must conclude that the adjudicator had no regard to it. That is particularly so given:

On behalf of TWUL, Mr. Speaight submitted that the mere fact that an adjudicator says that he has had regard to all relevant material is not necessarily definitive. For that proposition he relied, amongst other things, on the decision of His Honour Judge Raynor QC in Broardwell v. K3D Property Partnership Limited [2006] Adj CS 04/21. I accept that formulaic words in a decision are not, by themselves, enough to justify a finding that the adjudicator had regard to all of the documents, and that such a finding will depend on a proper analysis of the decision itself. But in a case of this sort where, as I have said, the decision ran to 28 closely-typed pages, I do not consider that I can draw the inference that the adjudicator ignored any of the documents sent to him simply because of that one omission; on the contrary, I find that he did have regard to all the documents.

More generally, even if I was wrong about both of the two previous findings that I have made, I would still conclude that there had been no material breach of natural justice in respect of the further response. The authorities require a defendant, who is challenging a decision on this ground, to show that their rights have been materially affected by the adjudicator’s alleged failure to have regard to the document in question: see Kier Regional v City and General (Holborn) [2006] EWHC 848 (TCC). I do not consider that there is any such evidence here. The further response put in by TWUL comprised two very different elements. The first consisted of a rehash of matters that had already been advanced in the original response. The second – and this was quite extensive – was a series of arguments and materials which were new but which, in my judgment, should have been either part of TWUL’s original withholding notice in October, or certainly their original response in the adjudication, dated 27th November 2009. As I have said, in their referral notice AMEC produced a detailed breakdown, doing their best with the items that they understood to be the subject of the withholding notice: thus, a detailed response in relation to those individual items could and should have been in TWUL’s original response of 27th November 2009.

That last point is important because of what Akenhead J said in HS Works v. Enterprise (paragraph 57 above). One of the facts which an adjudicator will take into account, when deciding on a timetable and considering whether further submissions can be provided late in the day, is what opportunities the parties have had to consider the subject matter of the dispute prior to, as well as during, the adjudication itself. Those same considerations would inform the court’s analysis of a challenge based on an adjudicator’s alleged failure to have regard to a late submission. In this case, the withholding notice was TWUL’s creation. They should have known from the outset precisely how they could justify every item in it. Thus, because they only served much of that justification with their original response, the party under time pressure in the adjudication was AMEC, not TWUL. AMEC did manage to produce a reply which set out their defence to the allegations and the substantiation that had been provided in the original response. In those circumstances, TWUL were not entitled to a further bite at the cherry, and even if they chose to avail themselves of such an opportunity, the adjudicator was not obliged to wade through their further submissions in microscopic detail.

That analysis, I think, provides an answer to Mr. Speaight’s example of an issue which he said the adjudicator had failed to pick up from the further response. That concerned the rates for defective work which had originally been the subject of the withholding notice at a figure of £317. That was challenged by AMEC (albeit not in their original claim, but in their reply) and they put forward a cost figure of £223. In the further response, served on 21st December, TWUL said that on a cost-based approach the figure should be £353. The Adjudicator plumped for the £223 figure. TWUL complain that, as a result, he must have had no regard to the further response.

The first point is that there is nothing in the adjudicator’s decision to indicate that the adjudicator did not consider (and reject) the £353 figure. He simply said that he had plumped for the £223 figure. He was plainly entitled to do so. Furthermore, given that TWUL’s Withholding Notice was based on the £317 figure, it was not open to them to seek a higher rate in any event. Thus, the argument about the further response is, in reality, just an example of the sort of scrabbling in the detail which Chadwick LJ deplored in Devonport v. Carillion.

Standing back from the detail for a moment, it seems to me that, as to complexity generally, this was not a particularly complex or difficult dispute. Specifically:

In all those circumstances, therefore, it seems to me that, subject to the next section, the adjudicator dealt fairly and properly with the dispute and cannot now be criticised. He asked himself the right question, namely, what, if anything, was due from TWUL to AMEC, and he considered whether he could deal with that issue in the time, by asking himself the question identified by Judge Toulmin in Birse. The allegations of breach of natural justice based on complexity and the further response are therefore rejected. It seems to me that this is very far from being a plain case of unfairness of the sort referred to by Chadwick LJ in Carillion.

TWUL’s last complaint concerns the streetworks cross-claim. They say that, whilst the adjudicator dealt at section 9 of his decision with the five ‘big ticket’ items of this head of cross-claim, concluding that TWUL had an entitlement to deduct about £220,000, he failed expressly to address the mass of smaller streetworks items, with a total value of over half a million pounds. Thus, they say, the adjudicator failed to respond to the issues with which he had to deal and, in consequence, either his decision went outside his jurisdiction or he failed to comply with the rules of natural justice.

In response, Mr. Hargreaves submitted that the adjudicator’s decision was inviolate and that, at the very worst, the adjudicator had made an error in answering the question that he was asked, which error was irrelevant to and can have no effect upon any application to enforce.

The leading case is, of course, Bouygues UK Limited v. Dahl-Jensen UK Limited. In that case, the adjudicator erred because he considered the gross figures without having regard to retention. This resulted in a payment being due to Dahl-Jensen in circumstances where, had he not made the error, they would have been the paying party. The adjudicator’s decision was upheld by Dyson J (as he then was) and again by the Court of Appeal. Buxton LJ said at paragraph 14:

Chadwick LJ approached the problem in the same way. At paragraphs 27 and 28 he said this:

A decision which followed Bouygues is Shimizu Europe Limited v. Automajor Limited. In that case the adjudicator held that a claim for a particular variation worth £161,996 was not in fact a variation at all. However, he awarded that sum to the contractor because he thought that the parties were agreed that there could be no challenge to that head of claim. Judge Seymour found that if there was a mistake, the position was no different to that in Bouygues and he enforced the award. At paragraph 23 of his judgment he said:

There are a number of cases in which the adjudicator’s failure to engage with the central question in the adjudication has led to the refusal by the court to enforce the decision. The starting point is the Scottish case of Ballast PLC v. The Burrell Company (Construction Management) Limited [2001] BLR 529 where the Adjudicator refused to carry out a valuation because the parties had departed from the terms of the written contract. He therefore wholly failed to deal with the dispute that had been referred to him. Lord Reid said:

It has subsequently been suggested, in particular by Judge Seymour in Shimizu, that the approach of Lord Reid in Ballast v. Burrell might be explained by the particular requirements of Scots law, and in particular by the fact that third party decisions are there open to judicial review. It was apparently for that reason that Judge Seymour had no regard to that case in reaching his conclusions in Shimizu. I should say that, in my judgment, the approach of Lord Reid in Ballast v. Burrell was in accordance with English law and we shall see in a moment a number of other decisions where similar conclusions were reached by an English court. As I pointed out during argument, in truth the Ballast point did not really arise in Shimizu at all, given that, so it seems to me, it was a clear and obvious example of a legitimate mistake of the kind referred to in Bouygues.

In AWG Construction at paragraph 128 in his judgment, Judge Toulmin referred to Ballast as a case where “the adjudicator did not reach a decision which was responsive to the issues referred in the adjudication.”

In Broadwell v.K3D the adjudicator failed to deal with the responding party’s counterclaim in its entirety because it was not referred to in the notice of adjudication. Judge Raynor concluded that, in consequence, the adjudicator had failed to address the responding party’s defence, and therefore had not completed the adjudication in accordance with the rules of natural justice.

In Thermal Energy Construction Limited v. AE & E Lentjes UK Limited [2009] EWHC 408 (TCC), His Honour Judge Stephen Davies refused to enforce an adjudicator’s decision in circumstances where the adjudicator had wholly failed to address the set-off and counterclaim raised by the defendant. The same judge reached the same conclusion in Quartzelec Limited v. Honeywell Control Systems Limited [2009] BLR 328 as a result of the adjudicator’s failure (because of his misunderstanding of the legal position) to address what was referred to as the defendant’s “omissions defence” and had clearly had regard to one side only of the equation when calculating the net payer and payee.

Thus there are two strands of authority. If the adjudicator makes an error of calculation his decision will still be enforced (see, for example, Bouygues). But if he fails to address the critical element of the dispute, his decision will not be enforced (see, for example, Ballast and Quartzelec). There was at least a suggestion in this case that these authorities may be difficult to reconcile.

In my judgment there is no inconsistency between these two lines of authority. If an adjudicator wrongly fails to have regard to the responding party’s defence to the claim, because he erroneously thought that he could not do so, (as for example happened in Broadwell), then he was not addressing the question that had been asked of him. He manifestly could not engage with the dispute that had been referred if he was failing to consider the responding party’s defence to the claiming party’s claim. Of course, such a conclusion can only be reached by the court “in the plainest cases” (Chadwick LJ in Devonport).

On the other hand, if the adjudicator sought to answer the right question and engage with the dispute that had arisen between the parties, even if in so doing he made a mistake and forgot something or gave undue significance to something else, then that decision was still enforceable and no jurisdictional issue or breach of natural justice could arise (see Bouygues). There is a significant difference in law between, on the one hand, not answering the right question at all and, on the other, answering the right question but in the wrong way.

In my judgment, it is a relatively simple matter to apply that analysis to this case. Here, the adjudicator had to answer the question: what, if anything, was due and owing from TWUL to AMEC? He sought to answer that question by looking at each side of the equation: what was due to AMEC? What set offs could be justified by TWUL?

If, for example, the adjudicator had failed to have any regard at all to the set-offs claimed by TWUL, because he wrongly believed that some legal principle prevented any consideration of the withholding notice, his decision would be unenforceable, for the same reasons as set out in Boardwell and the other authorities noted above. He would have failed to address the question referred to him. But if he had regard to the set-off in the withholding notice, even if he made a mistake in the way in which he dealt with that set-off, or in his calculation of its effect or worth, then his decision would be enforceable, as it was in Bouygues.

In the present case, I am not prepared to find that the adjudicator made an error in respect of the streetworks cross-claim. The streetworks cross-claim was highly contentious and a large part of it, on AMEC’s case at least, was wholly unsubstantiated. The adjudicator dealt with the ‘big ticket’ items on the face of his decision. He was not obliged in his written decision to go painstakingly through the thousands of smaller items that made up the streetworks claim, particularly given that the ICE adjudication procedure did not require him to give reasons for his decision at all. In his calculation, he had regard to the larger items, and even then he made significant reductions to the sums that he found could be deducted. He made no express reference to, or allowance for, the smaller items. The effect of his decision, therefore, was to disallow the majority of the streetworks cross-claim. There is nothing on the face of the decision which would allow me to conclude that the adjudicator had made a mistake in disallowing the majority of this large head of cross-claim, particularly given AMEC’s fundamental criticisms of it. It seems to me that his analysis, on the face of the decision, was entirely rational.

If I am wrong about that, however, and the adjudicator did make an error, I conclude that that is all that it was: an error in calculating the full worth of the streetworks cross-claim. He attached a significant value, some £220,000 to this item of cross-claim. If he has erred at all, it is because, at least on TWUL’s case, he did not give it an ever higher value by adding in at least some of the items that were not the 5 ‘big ticket’ items. That was therefore an error of calculation of precisely the same sort as occurred in Bouygues. It does not seem to me that that could affect, as a matter of principle, the enforceability of his decision.

It may be that a certain amount of confusion has arisen out of the references in some of the earlier cases to the need for an adjudicator to ‘respond to the issues’. That means nothing more or less than addressing the question that the adjudicator has been asked by the parties to answer, i.e. what, if anything, is due; what, if anything, is the period of culpable delay, and so on. The expression was not intended to convey an obligation on the part of the adjudicator to provide an answer to each and every issue that may be raised in the parties’ submissions, and it would be absurd to suggest that a failure to address a particular issue (no matter how trivial) on the face of a decision in some way amounted to an automatic breach of natural justice. Furthermore, it is not for the court on an enforcement application to pick through every pleaded issue – in the present case there were literally thousands of them – to see if each had been answered by the adjudicator. What matters, as I have said, is whether he attempted to answer the broad question that he had been asked. It seems to me plain that this adjudicator did so. Thus the last ground of challenge to his decision falls away.

On behalf of AMEC, Mr. Hargreaves had a further submission, to the effect that, in his statement Mr. Lunt, TWUL’s Field Operations Manager, made plain that he had used the adjudicator’s decision as the basis for subsequent payments and, more importantly, a fresh withholding notice. Mr. Hargreaves argued that this was a clear case of approbation and that TWUL could not, in response to this application, at the same time, seek to challenge that decision. In this regard he relied on the decision of His Honour Judge Seymour QC in Durtnell and Sons v. Kaduna Limited [2003] BLR 225.

In the light of the other decisions that I have reached, it is unnecessary for me to decide this issue, but I should make two points about it. First, as a matter of principle, it seems to me that TWUL’s conduct must arguably amount to approbation and reprobation: it is surprising to see evidence from a defendant, opposing an adjudicator’s decision on numerous grounds, also cheerfully admitting to implementing that same decision across a range of ongoing contractual disputes.

But secondly, if this point had been critical, I would have needed to have been persuaded that, with great respect, Judge Seymour’s analysis of benefit, a vital ingredient of this argument, was correct. At paragraph 47 of his judgment Judge Seymour said:

Taken to its logical conclusion, a benefit so defined could mean that a party who has lost an adjudication, and has dutifully followed every aspect of the decision against him when preparing his next withholding notice, would still be deriving a benefit from the decision. That seems, on the face of it, to be a surprising conclusion. No authority is identified by Judge Seymour in support of his definition. Thus, whilst I can see that a losing party who seeks to rely positively on some aspect of a decision on which he has been successful, whilst continuing to challenge the decision as a whole, might be attempting to gain a benefit, I find it difficult to reach the same conclusion when the losing party has simply applied, to his detriment, the findings of the adjudicator on which he has been unsuccessful.

Accordingly, for that reason, I decline to answer the approbation/reprobation issue. In any event, as I have said, it is not necessary for me to do so, given my other conclusions.

Mr. Hargreaves also argued that if I had been against him on the streetworks argument, the decision could have been severed and the maximum sum claimed in respect of the other, smaller streetworks items could have been deducted from the sum awarded by the adjudicator and the smaller net amount could then have been enforced by way of summary judgment. In this regard he relied on Cantillion Limited v. Urvasco Limited [2008] BLR 250 (TCC).

Again, it is unnecessary for me to decide that issue, in view of my other findings but, on the face of it, if the streetworks argument advanced by TWUL (which I have analysed in Section G above) had been successful, then it seems to me that this would have been an appropriate case for severance.

For the reasons set out in Section E above, I conclude that the dispute arose under the Framework Agreement and that the adjudicator had the necessary jurisdiction to deal with the adjudication.

For the reasons set out in Section F above, I conclude that there was no breach of natural justice either specifically in relation to the further response or, more generally, in relation to the size and complexity of the adjudication itself.

For the reasons set out in Section G above, I conclude that the argument in respect of the streetworks cross-claim does not give rise to a ground to challenge the decision, either in whole or in part. The adjudicator answered the question put to him. If – which I do not accept – he made an error in so doing, it was an error that he was entitled to make in accordance with the reasoning of the Court of Appeal in Bouygues.

Accordingly, TWUL’s challenges to the decision fail and there will be judgment for AMEC in the sum of £950,155.57. I will hear the parties separately on the issues of interest and costs.