This article summarises a significant judgment from yesteryear in AMEC Group Limited v Thames Water Utilities Limited [2010] EWHC 419 (TCC). The case concerned AMEC’s application for summary judgment to enforce an adjudicator’s decision awarding them £959,907.67. TW unsuccessfully resisted enforcement on grounds of jurisdiction and natural justice.

Background to Dispute

AMEC and TW entered into a Framework Agreement in February 2005. This agreement established a mechanism for TW to award separate construction and maintenance contracts to AMEC through individual work orders, which constituted acceptance of AMEC’s standing offer under the Framework Agreement.

AMEC submitted an aggregated payment application for various works and TW subsequently issued an aggregated withholding notice detailing set-offs and defences. AMEC then initiated an adjudication to challenge the validity of TW’s set-offs. The notice of adjudication asked the adjudicator to determine the sums properly due to AMEC in respect of measured works and decide on the validity of TW’s claimed set-offs. On 24 December 2009, the adjudicator awarded AMEC £959,907.67 and AMEC commenced enforcement proceedings on 29 January 2010.

General Principles of Enforcement

The court, presided over by Mr. Justice Coulson, reiterated the established principles governing the enforcement of adjudicator’s decisions. Adjudication is intended for swift and cost-effective dispute resolution, and courts should generally enforce decisions summarily. Adjudicators’ decisions are enforced even if they contain errors. The priority is a rapid resolution over a necessarily correct one. As noted in Chadwick LJ in Carillion Construction Limited v. Devonport Royal Dockyard Limited [2005] EWCA Civ 1358: “The need to have the ‘right’ answer has been subordinated to the need to have an answer quickly.”

While a common basis for challenge, the decision will be enforced “as long as he [the Adjudicator] asks himself a question or questions which have actually been referred to him for decision and seeks to answer such question or questions” (Shimizu Europe Limited v. Automajor Limited [2002] BLR 113). The Court emphasised that adjudicator’s decisions are temporarily binding, whether under the Act or a contractual mechanism and that the court’s role is to assess jurisdiction and fairness of the process, not the substantive correctness of the decision.

Jurisdictional Challenge

TW argued that the dispute arose under individual works contracts, not the Framework Agreement, rendering the adjudicator appointed under the Framework Agreement without jurisdiction. They also argued that if the dispute wasn’t under the Framework Agreement, the ICE procedure didn’t comply with the Act, and the adjudicator dealt with multiple disputes.

The court rejected this challenge. Clause 12.2 provided for adjudication of disputes “arising out of or in connection with this Agreement” under the ICE Adjudication Procedure 1997. The dispute concerning the aggregated payment application arose “in connection with” the Framework Agreement, specifically Clause 9.1.1. The withholding notice, critical to TW’s defence, was also served under the Framework Agreement.

Regarding the ‘multiple disputes’ argument, while acknowledging that disputes under separate works contracts could constitute multiple disputes potentially falling outside the Act (Enterprise Managed Services Limited. v. Tony McFadden Utilities Limited [2009] EWHC 3222 (TCC)), this was moot as the court found one overarching dispute under the Framework Agreement.

Natural Justice Issues

TW argued a breach of natural justice based: (i) on the complexity of the dispute; (ii) the failure to consider a further response: and (iii) the failure to consider their cross-claims in full.

As to the first point, the court rejected this argument citing CIB Properties Limited v. Birse Construction Limited [2005] 1 WLR 2252. The test is not inherent complexity but whether the adjudicator could sufficiently appreciate the issues and do “broad justice” within the timeframe. The adjudicator explicitly stated his satisfaction with his ability to understand the issues.

TW argued that the adjudicator did not properly consider their submission served shortly before the decision. The court found that the adjudicator wasn’t necessarily obliged to consider it exhaustively, especially given time constraints. While “final submissions” were invited, the obligation to consider late submissions is balanced against the adjudication timetable. The court found the adjudicator did have regard to the response, and in any event, TW failed to show material prejudice (Kier Regional v City and General (Holborn) [2006] EWHC 848 (TCC)). Mr Justice Coulson commented:

“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.” [64]

Finally, the Court rejected TW’s argument that the adjudicator failed to consider the entirety of TW’s Streetworks cross-claims by ignoring small ticket items. If the adjudicator answers the right question but errs in calculation or evaluation, the decision is still enforceable. Any failure to explicitly address smaller items was an error in evaluation, not a failure to address the issue.

Conclusion

This case serves as a strong reminder of the limited grounds on which enforcement of an adjudicator’s decision can be resisted and the courts’ commitment to upholding the swift and binding nature of the adjudication process. This is still a commitment from the courts today.

The case also provides some important principles in respect of natural justice. Challenges based on size/complexity are unlikely to be successful, unless the adjudicator demonstrably couldn’t fairly appreciate issues within time limits. Furthermore, in appreciation of the tight deadlines, the court confirmed that the responding parties aren’t entitled to unlimited submissions, and adjudicators aren’t required to address every minor point in detail.

Finally, this case emphasises the distinction between answering the wrong question (jurisdictional error/breach of natural justice) and answering the right question wrongly (error within jurisdiction) which remains crucial for enforcement applications (Bouygues UK Limited v. Dahl-Jensen UK Limited [2000] BLR 522).