It’s still tough to overturn an adjudicator’s decision

In Bouygues E&S Contracting UK Ltd  v Vital Energi Utilities Ltd[2014] CSOH 115, the court confirmed that if a party is unhappy with an adjudicator’s decision, it’s tough to kick it into the long grass.

The Bouygues case involved a combined heat, power and community energy system.  The contractor was Vital.  Vital entered into a subcontract with Bouygues for the design, supply and installation of the mechanical and electrical parts of the system.  Vital complained of poor workmanship and delays and it terminated the sub-contract.  Vital claimed approximately £4.5 million.  The adjudicator ordered Bouygues to pay approximately £1.6 million.  Bouygues tried to kick the decision into the long grass by arguing that it was a nullity.  It raised three challenges.

Challenge 1

Bouygues argued that the adjudicator had misunderstood the dispute and had adopted a restrictive view of his task.  This prevented him, therefore, from addressing an important part of Bouygues’ case – whether or not Bouygues’ work was defective. Vital disagreed and said that the adjudicator understood the relevant correctly and had answered it in a manner which was fair to both parties.

The court preferred Vital’s arguments and concluded that the adjudicator had addressed the task correctly. The judge felt that Bouygues’ arguments strayed into whether the decision was correct.  The judge reminded the parties that he was not permitted to investigate the merits of the decision as this would “undermine the purpose of the adjudication regime, namely to provide a swift and binding, albeit provisional, resolution to a dispute in the course of a construction contract”.

Challenge 2

Bouygues also felt that the decision was a nullity because the adjudicator accepted the advice of an independent assessor.  The assessor gave his view based on Vital’s sample of 10% of Vital’s invoices. Bouygues felt the adjudicator had gone off on a frolic of his own.  Vital pointed out that the assessor had used the sample relied on by Vital’s expert.  That sample had been available to Bouygues.  Bouygues had commented on this approach during the adjudication. Vital argued, therefore, that Bouygues’ arguments related to the quality of Vital’s.  The adjudicator was not permitted to consider the merits of the adjudicator’s decision. The judge preferred Vitals’ arguments and he confirmed that he was not permitted to investigate the merits.

Challenge 3

In his decision the adjudicator stated that in his experience it was possible to rely on a sample to reach a conclusion.  Bouygues argued that the adjudicator should have given the parties an opportunity to comment on the adjudicator’s intention to rely upon his own experience. Vital felt there was nothing wrong in an adjudicator relying on his own experience.  The judge agreed with Vital.

The Bouygues case is a timely reminder that if you’re unhappy with an adjudicator’s decision it’s difficult to kick it into the long grass, particularly where your arguments stray into a consideration of the merits of the decision.