Discain Project Services Ltd V Opecprime Developments Ltd (Part I)

The adjudicator was in breach of the rules of natural justice by reason of having had undisclosed communications with a representative of the contractor

Technology and Construction Court
His Honour Judge Peter Bowsher QC
9 August 2000

A dispute arose between the parties regarding payment. The adjudicator ordered the employer to pay to the contractor a specified sum of money. During the adjudication (1) The adjudicator and the contractor’s representative had a telephone conversation in which the representative expressed his concern as to the adjudicator’s jurisdiction and as to whether other companies in the employer’s group had been acting as the employer’s agent (2) They had a further telephone conversation on learning that the adjudicator was proceeding to a decision without his further comments as a result of which he sent to the adjudicator authorities for his consideration and (3) The contractor’s representative sent a fax to the adjudicator setting out these conversations and the adjudicator sent a letter in response. The contractor issued court enforcement proceedings.


Judge Bowsher held that the decision should not be enforced on the basis that there had been a breach of the rules of natural justice by reason of the adjudicator having had communications with a representative of the contractor during the adjudication process which were not disclosed to the employer at the time. The court should not be astute to upset an adjudicator’s decision on the ground of procedural error insofar as it would be possible with careful examination to find a breach of natural justice in many adjudications as a result of the speed of the process as required by the Construction Act. Also the statutory scheme of adjudication could only be made to work if some breaches of the rules of natural justice with no demonstrable consequence were disregarded. However, the adjudicator should have made sure that the employer was involved in the discussions which he had with the contractor’s representative in relation to his jurisdiction. As a matter of fact and degree the adjudicator overstretched the rules of natural justice in the instant case. If the rules of natural justice had been complied with, the adjudicator might have reached a different decision with regard to the validity or otherwise of the employer’s alleged notice of intention to withhold payment under section 111.


Advice Note

An adjudicator will be in breach of the rules of natural justice if he does not disclose his communications with one party to the other party.