Laker Vent Engineering Ltd v Jacobs E&C Ltd (TCC - 8.4.2014)

The general reservation as to the adjudicators jurisdiction was sufficient to permit the contractor to apply to correct a decisions under the slip rule without waiving the right to challenge the adjudicator's jurisdiction or approbating and reprobating the decision
 

LAKER VENT ENGINEERING LTD v JACOBS E&C LTD
Technology and Construction Court
Ramsey J
8th April 2014

 

The contractor made various jurisdictional challenges in the sub-contractor’s enforcement proceedings. The sub-contractor contended that the contractor’s (successful) application under the slip rule for a correction to be made to one the adjudicator’s decisions meant that the contractor elected to affirm the decisions and in doing so was precluded from pursuing any of its challenges to the enforceability of the decisions. Whilst the contractor attempted both to take the benefit of the slip and to reserve its position on jurisdiction, such an approach was not permissible because simultaneous approbation and reprobation is not available to a party.
 
Ramsey J rejected the sub-contractor’s contention and held that the general reservation in the contractor’s solicitors’ email to the adjudicator in relation to the adjudicator’s jurisdiction was sufficient to permit the contractor to apply under the slip rule without thereby waiving the right to challenge the adjudicator's jurisdiction or approbating and reprobating the decision by electing to treat it as binding. He did, however, express some hesitation in reaching this conclusion in the light of potentially conflicting judicial statements on the issue.
 
The effect of a reservation is that a party is saying that it is acting in a particular manner which appears consistent with the adjudicator having jurisdiction but is not waiving its rights to contend that the adjudicator did not have jurisdiction. A party will then participate in the adjudication under such a reservation and seek to persuade the adjudicator not to award the other party any sum but reserve its right to argue that the adjudicator could not award any sum on the grounds that the adjudicator did not have jurisdiction. A correction under the slip rule comes within the same principle in that a party seeks to reduce the sum awarded or have some other correction in its favour to cover itself should the jurisdictional challenge fail but reserves the right to contend that the adjudicator did not have jurisdiction. The same applies if a party pays under a reservation in that a party may pay a sum under a decision to cover itself should the jurisdictional challenge fail but still reserves the right to contend that the adjudicator did not have jurisdiction. It is at a point where it is no longer possible to reserve rights that necessarily a party must elect between approbation and reprobation in terms of relying on or challenging the decision.

 
 
Download