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

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 2the strict contractual code"


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 that he was concerned that (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 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. The Inner House agreed with the conclusion of Lord Reed at first instance that the "'decision" was a nullity.
Whilst some aspects of the management contractor's claims might ultimately fail, this was irrelevant in relation to the adjudicator's powers and duties under the Housing Grants, Construction and Regeneration Act 1996. The adjudicator's refusal to consider the claims was a failure in his duties inconsistent with the powers conferred on him. If categorised as a question of jurisdiction, the adjudicator's powers were focused by the dispute set out in the notice of adjudication and were subsequently amplified by the referral notice. Whilst the adjudicator was restricted to the issues focused in the dispute referred, he nevertheless had both the power and the duty to determine whether a claim advanced in respect of the valuation of work was validly asserted under the contract. 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.