Referring a ‘Dispute’ to Adjudication

Under section 108(1) of the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996), a party has the right to refer "a dispute" to adjudication.

This means the adjudicator lacks jurisdiction if more than one dispute is referred in a single adjudication, unless the parties agree otherwise. However, whether there is one dispute (made up of several sub-issues) or multiple disputes is a question of fact. This issue was considered in the case of Quadro Services Ltd v Creagh Concrete Products Ltd [2021] EWHC 2589 (Ch) (19 August 2021).

Facts

The Claimant, Quadro Services Limited, was seeking summary judgment to enforce an adjudication decision against the Defendant, Creagh Concrete Products Limited. The Defendant resisted enforcement on the ground that the Adjudicator had no jurisdiction because three disputes were referred to him.

During the course of the contract, the Claimant made applications for payment and raised invoices for the amounts claimed. Three outstanding invoices were the subject of the adjudication.

Arguments

The Claimant argued that the Adjudicator had jurisdiction because;

1. one dispute was referred to him, being whether the sum of £40,026 was due for payment.
2. there were sub-issues as to the validity of the individual invoices, but that there is no principle of law that each payment application gives rise to a separate dispute. (It relied on the passage at paragraph 33 of the judgment of Akenhead J in Witney Town Council v Beam Construction (Cheltenham) Limited [2011] EWHC 2332 (TCC) and argued that it makes clear that a single dispute can involve sub-issues.)

The Defendant argued that the referral was of three disputes because the claims could be individually decided without reference to each other and were distinguishable from each other.

The Law

In Witney Town Council v Beam Construction (Cheltenham) Ltd [2011] EWHC 2332 (TCC), Akenhead J gave guidance on the correct approach to this type of jurisdictional challenge. Essentially, it comes down to whether the alleged multiple disputes are actually sub-issues of a single dispute. As the judge said in Prater Ltd v John Sisk and Son (Holdings) Ltd [2021] EWHC 1113 (TCC), in determining that question, "one needs to look at the facts of each case and to use some common sense".

Decision

The judge agreed with the Claimant. It was clear that one dispute could include sub-issues that might be capable of being determined independently from each other, but that did not stop them being sub-issues in the wider dispute.

In Witney Town, Akenhead J had used the example of an adjudicator considering the validity of 50 variations forming part of a payment application: here it was three payment applications that the defendant had "simply not paid".

The judge also made the point that if she accepted the Defendant's argument, parties would incur "very significant cost and inconvenience" if they had to start numerous adjudications to recover "a single claimed balance under a single contract". That would be contrary to the policy underlying adjudication of providing a "process of efficient, swift and cost-effective resolution of disputes on an interim basis".

Analysis

This case highlights the importance before starting an adjudication, whether there is one dispute or multiple disputes and, if the latter, check whether your contract allows you to refer multiple disputes to the adjudicator or whether you are required to adjudicate each dispute separately. The default position is that only one dispute can be referred to an adjudicator at any one time.