Now, if the adjudicator answered the wrong question, this decision would be outside his jurisdiction. But provided he decided the dispute referred to him, it remained a valid and binding decision, even if it was mistaken and even if the mistake was of fundamental importance[17]. The Adjudicator was entitled to give a wrong answer to the (right) question referred to him. It was important to distinguish between, the underlying dispute between the parties and, the issues and legal arguments they deployed when setting out their side of the dispute[18].
The adjudicator acknowledged Award 1 and expressly did not re-open that dispute. Even he failed to correctly apply Award 1 that did not undermine it. In fact, on analysis, and whilst it might have been more clearly expressed in the Decision, the adjudicator rejected the Contra Charge on the basis of causation. Thus having accepted that Graham was in breach of contract, he concluded such breach was not the cause of their decision not to carry out the works; rather, it was the binding nature of Adjudication 1 which was the cause of its refusal and the cause of the Tecnicas giving the works to others (and incurring the cost leading to the Contra Charge). The Decision did not therefore undermine or override Award 1. 2. No power – did the adjudicator fail to act in accordance with the powers granted to him by the Subcontract?
The key question was “did the adjudicator decide the dispute that had been referred to him?”
The court decision
1. Did the Decision undermine or override Award 1?
Applying the test as to what Award 1 actually decided, the question determined by the Decision was not the same or substantially the same as the question determined in Award 1. The dispute in Award 1 was as to the terms and interpretation of the Subcontract in relation to the scope of the work to be carried out under the Subcontract and whether the scope related to all civil works or was that described in the intermediate milestones. It did not address any dispute about the financial consequences – such as entitlement to payment or to damages or to levying contra charges flowing from the Subcontract as properly interpreted. By contrast, the dispute in Adjudication 4 was about the financial consequences of that interpretation and concerned Graham’s entitlement to payment of the various sums within its application, including Tecnicas’ entitlement to levy the Contra Charge.
Clause 39.3 of the Subcontract provided for disputes to be finally settled by arbitration.
Tecnicas argued that looked at through the prism of the Subcontract terms, the Decision sought to override Award 1. This was essentially the same result as was argued for under issue 1 above. And for the same reasons it failed. Even if clause 39.3 of the Subcontract was a “relevant term” under paragraph 12(a) of the Scheme (as to which the court expressed no concluded view) it added nothing to the accepted position under the general law: that an adjudicator was bound by a prior arbitration award or court judgment (on the same issue).
[17] Bouygues UK Ltd v Dahl-Jensen UK Ltd [2000] BLR 49 §25. [18] Benfield Construction Ltd v Trudson (Hatton) Ltd [2008] EWHC 2333 (TCC) §48.
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