4) Jurisdiction – Excess of and failure to exhaust – reservation of position: Hochtief Solutions AG and others v Maspero Elevatori S.p.A. [2021] CSIH 19 (15 February 2021) (Lord President, Lord Menzies, Lord Woolman) This was an appeal by Maspero against the judgment of Lord Clark at first instance[12]. The adjudicator had been required to decide whether an agreement reached in July 2018 had varied the subcontract under which he was appointed or was a new agreement. The adjudicator decided the agreement was a variation of the sub contract and was not a new contract and the dispute was within the scope of his jurisdiction. He also considered that the challenge to his jurisdiction (if that is what it was) having been first raised in the rejoinder came too late and was not set out in appropriate and clear terms. When the matter came before Lord Clark for enforcement of the adjudicator’s award, he held (i) the adjudicator had not exceeded his jurisdiction in deciding whether the July agreement was a variation of the subcontract or a new contract; (ii) the adjudicator had not failed to exhaust his jurisdiction as alleged, in that he had taken into account Maspero’s contentions before concluding that certain design costs were covered by a clause in the determination provision of the subcontract; (iii) Maspero in merely “hinting at a challenge” had not made an appropriate and clear reservation “at the outset” such as was required and had therefore acceded to the adjudicator’s jurisdiction.
The Inner House rejected Maspero’s appeal. First the court looked at the subcontract and held that the words “…a dispute or difference arises under this subcontract” were wide enough to allow the adjudicator to determine whether or not the July 2018 agreement varied the subcontract or was a new contract. The words (quoted) should be given a broad construction[13]. The subcontract actually provided for variations and reasonable commercial parties would have wanted variation disputes to be included within the ambit of the adjudication provision. Turning the question around, the adjudicator could not have determined the issue referred by looking only at the subcontract. He had to rule on the variation to see if the subcontract termination had been valid. The Inner House rejected a call to rule that Scots law did not require a party to reserve its position in order to mount a jurisdictional challenge on the grounds that an adjudicator either had jurisdiction or he did not. There must be an appropriate and clear reservation. Maspero did not use the term “jurisdiction”, did not invite the adjudicator to resign and in any case a challenge in the rejoinder was too late.
[12] [2020] CSOH 102 reported in Cases part 1 0f 2021 [13] Lord Briggs in Bresco Electrical Services Ltd vMichael J Lonsdale (Electrical) Ltd [2020] UKSC 25
Made with FlippingBook flipbook maker