Viridis UK Ltd v Mulalley and Company Ltd (TCC - 11.2.2014)

The adjudicators decision could not and should not be enforced when the court had (finally) determined (by way of trial) that he wrongly rejected the contractors jurisdictional challenge and when he did not have substantive jurisdiction to determine that challenge



Technology and Construction Court
His Honour Judge Stephen Davies
11th February 2914

The sub-contractor was awarded a specified sum in respect of its final account claim. The parties agreed that in the proceedings to enforce the decision the so-called “contract issue” should be finally determined by the court by way of trial. This issue was whether the sub-contractor claim arose under one contract, as the sub-contractor contended or under separate sub-contracts, as the contractor contended. Judge Davies held that six separate sub-contracts had been entered into and that the adjudicator had no jurisdiction to decide the sub-contractor’s claim which arose under three of those sub-contracts, each with different terms and subject matter, including differing adjudication procedures.
The further so-called “substantive jurisdiction” issue was formulated, namely that if, as the judge determined, the disputed final account claim arose under more than one sub-contract, whether the adjudicator had nonetheless been entitled to decide the contract issue as part of his substantive jurisdiction. Judge Davies’ held that the adjudicator had not been so entitled.
The judge stated that the decision of Akenhead J in Air Design (Kent) Limited v Deerglen (Jersey) Limited (2008) relied on by the sub-contractor was only authority for the proposition that where an adjudicator is properly appointed under a contract about which there is or can be no dispute, he may also have jurisdiction to resolve jurisdictional issues if they are coincidentally part of the substantive dispute referred. This proposition could not be said to apply to the present case where the contractor was correct in its contention before the adjudicator that there was never any initial concluded contract about which there was no dispute and the claims in the adjudication were advanced under three separate contracts.
The adjudicator therefore could not properly have been appointed under any version of the initial concluded contract as contended for by the sub-contractor because (i) There was a substantial dispute as to whether or not there was such a contract or a series of separate contracts covering the same subject matter and (ii) There were differences of substance in the adjudication procedures applicable to the differing contracts as well as in the other terms of those contracts.