2. That the claimants’ adjudication terms as to payment were not effective to entitle them to payment in circumstances where the adjudicator provided no decision or where he was not faithful to the bargain.
The adjudicator believed that taking the initiative was consistent with his duty under paragraph 12 of the Scheme to avoid unnecessary expense. It would have been wiser for the adjudicator not only to inquire as to the parties' position as to who were the contracting parties, but also to inquire in terms as to whether both parties accepted that he had jurisdiction. The effect of what the adjudicator did was to deprive the parties of an answer to their differences as to what sumwas payable (either by Ms Patel or by BIL) in respect of the project. The court’s conclusion was that the route which the adjudicator took was outside the ambit of paragraph 13 of the Scheme: that paragraph entitled the adjudicator to investigate matters "necessary to determine the dispute", which necessarily involved the question: what is the dispute? At the time when the adjudicator resigned, there was no dispute either as to the identity of the contracting parties or as to his jurisdiction. Accordingly, the decision to resign was erroneous. But that was not an end of the matter. Ward submitted that the adjudicator's decision to resign "represented abandonment of his appointment and a deliberate and impermissible refusal to provide a Decision." The judge did not agree. Far from "abandoning his appointment", the adjudicator acted in accordance with what he regarded as being his duty. Further, resignation by an adjudicator was not of itself a breach of the terms of the adjudicator's engagement since paragraph 9(1) of the Scheme permitted the adjudicator to resign at any time on giving notice to the parties. The question here was whether upon resigning the adjudicator was still entitled to his fees. That turned upon the true construction of the adjudicator's terms and conditions.
Clause 1 provided:
"The Parties agree jointly and severally to pay the Adjudicator's fees and expenses as set out in this Schedule. Save for any act of bad faith by the Adjudicator, the Adjudicator shall also be entitled to payment of his fees and expenses in the event that the Decision is not delivered and/or proves unenforceable." Ward said that, at one and the same time, the adjudicator had managed to abdicate his responsibility, exceed his jurisdiction and failed to exhaust it; so that Clause 1 did not apply. The judge disagreed. Clause 1 meant that in addition to being paid for producing a Decision (which was the normal event upon the occurrence of which an adjudicator was entitled to payment) the adjudicator was entitled to be paid his fees for work done unless there has been an act of bad faith on the adjudicator's part. Ward argued that Mr Davies had not been faithful to his bargain. In construing Clause 1, it was sufficient to say that where an adjudicator acting with diligence and honesty came to the conclusion that the proper course was for him to exercise his right under Paragraph 9(1) of the Scheme to resign, that was not a situation within the expression "bad faith".
Subject to the next point, the terms entitled the claimant to its fees for the work done by Mr Davies.
Made with FlippingBook flipbook maker