5) Jurisdiction – Adjudicator’s powers under NEC3 Option W1.3(5) – Waiver following decision: Croda Europe Ltd v Optimus Services Ltd [2021] EWHC 332 (TCC) (19 February 2021) HHJ Roger ter Haar QC The parties contracted on an NEC3 Professional Services Contract (PCS) under which Optimus agreed to provide services in connection with the expansion of Croda’s chemical work. The Act did not apply as the agreement was not one for construction operations as defined in the Act. The PSC did contain provision for adjudication when the Act applied (Option W2) but also contained an Option for adjudication when the Act did not apply (W1). In this case the parties agreed to apply Option W1. In a first adjudication over the value of the services, the adjudicator decided the gross value due to Optimus was less than had been paid but decided he had no power to order repayment of the excess to Croda, who then began a second adjudication for repayment of the overpayment. Croda was successful and when Optimus refused to pay the sum awarded by the adjudicator, Croda applied for summary judgment. Optimus resisted enforcement or several jurisdictional grounds. First they contended that the adjudicator’s powers to “review and revise any action or inaction” under Option W1.3(5), did not extend to finding that the value of Optimus’s services was less than had been paid and to order repayment. The judge found no justification for such a limitation. He held that the power under Option W1.3(5) should not be construed any differently than the like power under OptionW2.3(4).
There should be a consistent approach. The powers of the adjudicator under Option W2.3(4) must be unlimited, as a party was entitled to refer “any dispute” to adjudication under the Act. It would be improbable and un-commercial to construe W1.3(5) as being a closed list of powers; it applied to all disputes just like W2. Next the judge dismissed the submission that the adjudicator was not entitled to create a negative valuation and payment, though even if that were true, it would be a contractual interpretation that was open to the adjudicator and therefore not a ground upon which to resist enforcement. Last, he found that Optimus had elected to treat the decision as binding and had waived its right to challenge enforcement on jurisdictional grounds, when it wrote to the adjudicator confirming payment of his fees and to ask him to correct his decision under the so called ‘slip rule’, without reserving its right to raise a jurisdictional challenge. Comment It is now clear, if it was not before this decision, that a party who wishes to retain its right to raise a jurisdictional challenge upon enforcement must expressly reserve that right not only when participating in the adjudication, but after the decision is published before taking any steps which might otherwise be seen as an election to the treat the decision as valid and binding. Such steps would include, for example, paying the adjudicator’s fees, asking him to correct his decision, or for clarification or explanation or additional reasons.
Made with FlippingBook flipbook maker