Citation: [2014] EWHC 3710 (TCC) (07 November 2014); [2015] B.L.R. 1; 157 Con. L.R. 120
The TCC considered the question of enforceability of an adjudicator’s decision, by way of summary judgment, where it was argued that the referring party's representative had made fraudulent misrepresentations when applying for the adjudicator to be nominated. On the facts, the Defendant (“Siemens”) resisted an application by the Claimant (“Eurocom”) for enforcement of an adjudicator’s decision on a number of grounds. Its main argument was that the RICS adjudicator lacked jurisdiction because of the invalidity of its appointment. This was based on allegations that Eurocom’s application form, seeking the appointment, had misrepresented to the RICS that a number of potential adjudicators had conflicts of interest, when in fact this was not true. Siemens argued that these were merely names of adjudicators that Eurocom did not want to be appointed and this was made clear from the witness statements submitted by Eurocom. In this way Eurocom had also breached an implied term not to act dishonestly; here, by subverting the system of nomination. Siemens further argued that the adjudication procedure was unfair and in breach of the requirements of natural justice as the RICS had failed to send a copy of the application form, containing the fraudulent misrepresentations, to Siemens. This contradicted the RICS explanatory notes, which stated that this practice would be followed wherever there was alleged to be a conflict of interest. Siemens also argued that (i) the adjudicator had acted outside of his jurisdiction by deciding a dispute different to the one in the notice of adjudication and/or a dispute that had already been determined in a previous adjudication; (ii) that there were breaches of natural justice in the course of the adjudication; and (iii) the court should stay the enforcement of any sums awarded in favour of Eurocom in the event that it decided in favour of granting summary judgment. Mr J Ramsey, holding in favour of the Defendant, dismissed Eurocom’s application for summary judgment. In doing so, he came to the following conclusions: (i)There was a “strong prima facie case” that the referring party's representative had made fraudulent misrepresentations to the RICS when applying for the adjudicator to be nominated. This would render the Adjudicator’s appointment a nullity by invalidating the process of appointment. Alternatively, Siemens had established a sufficiently strong case that Eurocom had, in breach of an implied term not to act dishonestly, failed to follow the correct adjudication process in a way that went to the heart of the appointment, rendering the appointment invalid; (ii) There was no breach of the rules of natural justice by the failure of the RICS to act in accordance with its explanatory notes – these were merely statements of good practice and were not required as a matter of procedural fairness under the principles of natural justice. The role of an adjudicator nominating body was limited to the proper exercise of its discretion to make a nomination. The court also made a number of obiter findings.
Counsel: Fionnuala McCredie QC and Paul Bury appeared on behalf of the Defendant.
