Lead Technical Services Ltd v CMS Medical Ltd

Enforcement by the judge at first instance of the adjudicator's decision in the consultant's favour overturned by the Court of Appeal
 
LEAD TECHNICAL SERVICES LTD v CMS MEDICAL LTD

Court of Appeal
Buxton, Rix and Moses LJJ
30 January 2007
 
The client appealed to the Court of Appeal against the enforcement by the judge at first instance of the adjudicator's decision in the consultant's favour. Moses LJ at the outset of his judgment stressed the importance of the adjudicator's role in achieving a speedy interim solution to disputes over fees or payments. He went on to say that that purpose would be obstructed unless the courts protected adjudications from disputes of fact and law on appeals which could better be resolved subsequently. The statutory scheme was designed to afford an expeditious system for providing an interim solution to disputes and thus meeting what the Court of Appeal in Carillion Construction v Devonport Royal Dockyard (2005) described as legitimate cashflow requirements. Moses LJ pointed out that Chadwick LJ in that case had set out the Court of Appeal's strictures as to the rigorous approach which should be adopted to appeals of this nature.
 
However, Moses LJ also pointed out that an adjudicator cannot act where there is a real prospect based on cogent grounds of establishing that the adjudicator had acted without jurisdiction. The Court of Appeal came to the conclusion that the client did have a real prospect of establishing such a lack of jurisdiction. The first ground for concluding that the adjudicator lacked jurisdiction was in relation to his appointment. The adjudicator was appointed by a nominating body specified by the first agreement between the parties but there was a real prospect of the client being able to establish at trial that the parties' agreement was contained in a deed of appointment which supplanted the first agreement and which provided for an adjudicator to be appointed by the (different) nominating body specified in that deed. The second ground was in relation to the requirement in section 107(2) of the Construction Act that construction contracts must be in writing to come with the compulsory adjudication provisions of the Act. In this connection there was a real prospect of the client being able to establish at trial that an oral agreement made at about the time the formal written appointment was entered into by which the consultant's fees were to be capped to a specified sum with the result that there was no written agreement within the meaning of section 107(2).
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