Named after the inventor of radio communication, Marconi House was home to the first BBC radio news broadcast in the U.K. which featured a court report, details of London fog disruption and the latest billiards scores. More importantly, Marconi House was central to the judgment in Cantillon Limited v Urvasco Limited [2008] EWHC 282 (TCC).
The case concerned Cantillon’s claim to enforce an adjudicator’s decision where Urvasco resisted enforcement, alleging that the adjudicator lacked jurisdiction and failed to comply with the rules of natural justice in relation to a specific part of the decision concerning a 13 week claim for prolongation. The judgment provides valuable insights and a significant authority into the court’s approach to enforcing adjudicator’s decisions, the principles of jurisdiction and natural justice, and the potential for severability of parts of an adjudicator’s decision.
Background to dispute
Urvasco engaged Cantillon to carry out demolition, piling, and other works under a JCT Private Without Quantities 1998 Edition which included a standard adjudication clause. Disputes arose primarily around Cantillon’s entitlement to extensions of time, specifically two claims: a 16-week claim and a 13-week claim, along with related loss and expense. The combined claims were referred to adjudication, and following submissions and meetings, the adjudicator issued a decision on 28 November 2007, awarding Cantillon £391,565.60 plus VAT, against a much higher claim.
On enforcement, Urvasco argued that the adjudicator lacked jurisdiction and failed to follow the rules of natural justice in his handling of the prolongation costs associated with the 13-week claim. Specifically, Urvasco contended that the adjudicator allowed costs for a different and later period than the specific 13-week period claimed by Cantillon, without giving Urvasco an opportunity to present evidence and arguments related to costs during that later period.
Jurisdiction of the Adjudicator
The core of Urvasco’s jurisdictional challenge was that Cantillon claimed for a specific 13-week period with specific preliminary costs, and the adjudicator awarded costs for a different and later period. Mr Justice Akenhead considered the scope of the dispute referred to adjudication. He stated, “In my judgment, it was a claim for loss and expense in respect of the 13 weeks extension of time which had been granted for the in-board piling variation which was disputed” [66]. However, the Judge found that once Urvasco raised defences predicated on an as-built programme and argued that any prolongation occurred during a later period, the adjudicator’s jurisdiction extended to addressing these defences and their consequences. He stated at [75]:
“The claim which he was addressing was one for loss and expense for 13 weeks said to be attributable to the in-board piling variation. It was not, and should not be considered to be, limited to a loss and expense claim for 13 specific calendar weeks. This becomes even clearer when Urvasco actually run a defence that the losses claimed can not be recovered because they relate, only upon Urvasco’s defence, to a later period. It offends reason that Urvasco could run that defence and avoid the consequences.” [emphasis added]
Natural Justice
Urvasco argued that the adjudicator breached natural justice by considering costs for a different period without giving them an opportunity to respond with evidence and arguments specific to that later period. In reaching a finding, the judge outlined the principles of natural justice in adjudication, tailored to this specific issue:
“(a) It must first be established that the Adjudicator failed to apply the rules of natural justice;
(b) Any breach of the rules must be more than peripheral; they must be material breaches;
(c) Breaches of the rules will be material in cases where the adjudicator has failed to bring to the attention of the parties a point or issue which they ought to be given the opportunity to comment upon if it is one which is either decisive or of considerable potential importance to the outcome of the resolution of the dispute and is not peripheral or irrelevant.
(d) Whether the issue is decisive or of considerable potential importance or is peripheral or irrelevant obviously involves a question of degree which must be assessed by any judge in a case such as this.
(e) It is only if the adjudicator goes off on a frolic of his own, that is wishing to decide a case upon a factual or legal basis which has not been argued or put forward by either side, without giving the parties an opportunity to comment or, where relevant put in further evidence, that the type of breach of the rules of natural justice with which the case of Balfour Beatty Construction Company Ltd -v- The Camden Borough of Lambeth was concerned comes into play. It follows that, if either party has argued a particular point and the other party does not come back on the point, there is no breach of the rules of natural justice in relation thereto.” [57]
He found no breach of natural justice in this case, reasoning that Urvasco had the opportunity to address the quantum ramifications of their own assertion that any prolongation occurred during the later period. The judge noted that Cantillon’s request on 23 October 2007 for the adjudicator to consider the actual period of delay should have alerted Urvasco to this possibility.
Court’s Approach to Enforcing Adjudicator’s Decisions
The judge reiterated the established principle that courts should only interfere with adjudicator’s decisions in rare circumstances, specifically where the adjudicator lacked jurisdiction or failed to apply the rules of natural justice. The purpose of adjudication is to provide a quick, albeit potentially not definitively correct, answer to a dispute.
He endorsed the view from Macob Civil Engineering Limited v Morrison Construction Limited [1999] BLR 93 that courts should not adopt an over-analytical approach to these challenges and should be wary of parties “simply scrabbling around to find some argument, however tenuous, to resist payment”. As such, the judge enforced the adjudicator’s decision, holding that the adjudicator did have jurisdiction and did not breach the rules of natural justice.
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