Sherwood & Casson Limited -v- Mackenzie (unreported)

The position in relation to paragraph 9(2) of the Scheme for Construction Contracts where a dispute referred to adjudication is alleged to be (substantially) the same as one previously referred and decided
Judge Thornton set out guidelines as to the position where there are two adjudications and one party alleges that the dispute referred in the second adjudication was (substantially) the same as the dispute referred in the first. Paragraph 9(2) of the Scheme for Construction Contracts provides that an adjudicator has to resign where the dispute is the (substantially) same as one which had previously been referred to adjudication where a decision had been taken in that adjudication. Judge Thornton stated that: (1) The Construction Act 1996 envisaged that a ?dispute? within the meaning of the Scheme could encompass several causes of action, issues or claims arising out of the same construction contract. (2) Paragraph 9(2) required the adjudicator to resign from the dispute in its entirety or to confirm his appointment in its entirety (with the result that he could not resign from part of the dispute referred and retain jurisdiction to determine the balance of the dispute). (3) An adjudicator had the jurisdiction under paragraph 9(2) to determine whether two disputes referred were (substantially) the same but his determination was open to challenge in the courts. (4) Even where the adjudication procedure did not incorporate paragraph 9(2) or a similar provision, if a dispute had already been substantially decided by an adjudicator, there would not be a dispute or difference capable of being referred to the second adjudicator with the result that the second appointment would probably be without jurisdiction. (5) When determining an allegation that an adjudicator in a second adjudication had erroneously exercised his jurisdiction conferred by paragraph 9(2) to determine whether a dispute was (substantially) the same, the court (a) might conduct a factual enquiry but such an enquiry would be conducted for the limited purpose of ascertaining whether the two disputes were substantially the same (b) would not be concerned to investigate the merits of the disputes (c) would give considerable weight to the adjudicator's determination and (d) would only embark on a jurisdictional enquiry where there were substantial grounds for concluding that the adjudicator had erred in concluding that there was no substantial overlap. Advice Note Whilst an adjudicator can determine whether a dispute is (substantially) the same as one already referred, such determination is subject to being overruled by the courts.