McConnell Dowell Constructors (AUST) PTY Ltd v National Grid Gas Plc

The adjudicator had jurisdiction on the basis that the employer's contention that the claims brought by the employer in the adjudication were settled by a separate supplemental agreement should be rejected

Technology and Construction Court
Jackson J
3 October 2006
The employer and the contractor entered into a supplemental agreement which purported to settle various disputes between them. The contractor brought claims against the employer subsequent to that agreement being entered into which it referred to adjudication. The adjudicator made a decision in the contractor's favour and awarded it a specified sum. The employer refused to pay the specified sum. The contractor began court proceedings to enforce the decision. The employer contended before the court that the adjudicator had no jurisdiction to make his decision. This was because the contractor's claims in the adjudication had been settled by a separate supplemental agreement which did not contain an adjudication clause and which was not a "construction contract". There was therefore, according to the employer, no "dispute" within the meaning of the original construction contract. Jackson J rejected the employer's contention and ordered summary judgment in the contractor's favour enforcing the award. In giving judgment Jackson J held that the supplemental agreement operated as a variation of the original contract and was subject to the adjudication provisions in that contract insofar as it (1) varied the contract sum and the contractual completion dates and (2) defined matters covered by the increased contract sum and matters not so covered and which therefore could be the subject of a claim for additional payment under the terms of the original contract. In addition, recital C to the agreement, which provided that the terms of the contract were to continue in effect except where the terms of the agreement modified, altered or varied the terms of the original contract, supported that conclusion. The dispute as to how much should be paid to the contractor over and above the specified adjusted contract sum had the following of elements which constituted a dispute or disputes falling within the adjudicator's jurisdiction: (1) the heads of claim included in the adjusted contract sum and therefore shut out by the supplemental agreement and (2) the assessment and valuation of the heads of claim not so shut out. It was for the adjudicator to determine which claims had been settled by the supplemental agreement and whilst the adjudicator might have been wrong in this connection, the adjudicator had reached a decision which was within his jurisdiction and which was binding at least for the time being.