Sprunt Ltd V London Borough Of Camden

The provision in the adjudication agreement in the framework agreement enabling the local authority to nominate adjudicators was invalid


Sprunt Ltd V London Borough Of Camden
Technology and Construction Court
Akenhead J
6 December 2011
Akenhead J held that the provision in the adjudication agreement in the framework agreement enabling the local authority to nominate adjudicators was in any event invalid as being inherently unsound even if the provisions of the adjudication agreement had been “compliant” because (i) It would have had the right to nominate a judge in its own cause and (ii) That would have struck against the policy of the Construction Act of having actually and ostensibly impartial adjudicators.
The judge gave further reasons to support this decision. Section 108(2)(e) imposed a statutory requirement that the contract should impose a duty on the adjudicator to act impartially. Impartiality in an adjudicator, or indeed an arbitrator or judge, was judged by reference to actual partiality or bias and ostensible or apparent partiality or bias. Ostensible or apparent bias was judged by reference to an objective test as propounded in Porter v Magill (2002), namely whether a fair-minded and informed observer who had considered all the circumstances would conclude that there was a real possibility that he was biased. Whilst the local authority as the contractually specified organisation could have nominated a wholly independent person as adjudicator, it lacked the necessary quality of independence in the nomination of an adjudicator as a party to the construction contract in question because (i) There was no obviously good reason why it retained to itself the right to nominate adjudicators other than to appoint someone who it believed might be sympathetic or not unsympathetic to its position even if wholly independent (ii) It could nominate an adjudicator who was very expensive in relation to the amounts in issue and (iii) It would be difficult to dispel the real possibility that the local authority had appointed what it thought was a "horse for the course" and someone who was or might be sympathetic to it. The alternative view put forward by the local authority was that it was not the fact that it was to nominate that would give rise to a lack of impartiality since that would only arise if it nominated someone with actual or apparent partiality. This alternative view was not an unrespectable argument since in some arbitration agreements, for instance those subject to the ICC Rules, each side nominated an arbitrator, albeit that a chairman would then be nominated independently. However, it should nevertheless be rejected.