Ballast plc V The Burrell Company (Construction Management) Limited - Part I

Adjudicator guilty of an error of law by having refused to decide the dispute referred to him on the grounds of the contract's lack of clarity and of the parties' failure to follow what the adjudicator termed "the strict contractual code"
 
BALLAST PLC v THE BURRELL COMPANY (CONSTRUCTION MANAGEMENT) LTD
 
Scotland, Court of Session, Inner House
The Lord President and Lords Johnston and Weir
17 December 2002
 
 
The dispute referred to the adjudicator by the management contractor was in respect of the employer's alleged failure to make interim payments. The adjudicator refused in his decision to make a determination in respect of this dispute. The adjudicator stated in his decision that he was concerned about the parties' failure to abide strictly by the terms of the standard form of JCT management contract in their dealings with each other and with third parties. For example (1) Work was carried out without the issue of formal architect's instructions (and was instead informally instructed or approved by the employer) (2) The management contractor believed that the employer interfered with the certification and valuation process with the result that the architect and quantity surveyor insisted on formal written instructions for work where it was known that none existed and (3) The management contractor used a non-standard form for some of its contracts with individual works package contractors. The adjudicator concluded from these concerns were that it was impossible to determine the dispute referred to adjudication by reason of the contract's lack of clarity and of the parties' failure to follow what the adjudicator termed "the strict contractual code."
 
The management contractor applied for judicial review of the adjudicator's decision on the basis that he was not entitled to refuse to decide the dispute referred to him. Lord Reed agreed with this contention. The adjudicator misconstrued his powers and failed to exercise his jurisdiction with the result that his "decision" was a nullity. The adjudicator was bound to determine the dispute referred to him if it fell within his jurisdiction (by reason of paragraph 20(1) of the Scheme for Construction Contracts requiring that the adjudicator was to decide the matters in dispute), although he could not determine with binding effect the extent of his own jurisdiction (by reason of the limits of his jurisdiction being determined by the notice of adjudication and the Scheme). Advice Note If a dispute referred to an adjudicator is within his jurisdiction to decide, the adjudicator is under an obligation to decide it and if he does not, he is guilty of an error in law.
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