3) Jurisdiction – excess of – undermining arbitral award – no power – wrong question – waiver – John Graham Construction Ltd v Tecnicas Reunidas UK Ltd [2022] EWHC 155 (TCC) Morris J judgment 27 January 2022 The Claimant (“Graham”) was employed by the Defendant (“Tecnicas”) under a sub-contract relating to the Tees Renewable Energy Plant Biomass Power Station. There had been four adjudications and two arbitrations between the parties. In Adjudication 1, the adjudicator concluded that Tecnicas was not entitled to contra charge the cost of employing others to complete work which Graham refused to do, alleging it was outside the scope of its subcontract obligations. Graham later left site and carried out no further works. The first arbitration (“Arbitration 1”) concluded in early 2021 and the award (“Award 1”) overturned the decision in Adjudication 1 thus finally deciding that the works that Graham had refused to carry out were in fact within the scope of its subcontract, and Graham was therefore in breach. The second arbitration was continuing and is not relevant to what follows. On 5 March 2021 Graham gave notice of its intention to refer to adjudication a dispute “as to the correct value of Interim Payment Application Number 47”, thereby commencing “Adjudication 4” . Graham also set out a challenge as to the validity of the Contra Charge in the Notice of Adjudication, stating that “the Contra charge is invalid and that [Graham] is entitled to be certified and paid the amount deduced [sic] by [Tecnicas]”.
As the judge observed, it could be a defence to an application for enforcement that no dispute had crystallised, and the adjudicator had no jurisdiction. The court was referred to several authorities on the question of when a dispute crystallises[14]. The court found it was clear a dispute had crystallised here. Six invoices were sent and treated by Prosperity as having been sent to them and in respect of which they issued pay less notices and payment notices as well as writing a letter disputing liability. The late challenge to liability to pay under the contract by reason of (alleged) defective design was not a defence available on enforcement. Judgment for Bravejohn in the sum of £39, 038 plus interest, together with costs on the indemnity basis assessed £23,857 (as against cost claimed of some £33,000).
[14] Ringway Infrastructure Services Ltd v Vauxhall Motors Ltd [2007] EWHC 2421 (TCC), at [55]; Coulson J in CSK Electrical Contractors Ltd v Kingwood Electrical Services Ltd [2015] EWHC 667 (TCC) where he referred to the starting point being the decision of Jackson J in AMEC Civil Engineering Ltd v Secretary of State for Transport [2004] EWHC 2339 (TCC); Ramsey J in City Basements Ltd v Nordic Construction UK Ltd [2014] EWHC 4817 (TCC) at [29], had quoted from Jackson J's position in the Amec case as adopted by Clarke LJ in the Court of Appeal in Collins (Contractors) Ltd v Baltic Quay Management [1994] Ltd [2004] EWCA Civ 1757; and finally Akenhead J in VGC Construction Ltd v Jackson Civil Engineering Ltd [2008] EWHC 2082 (TCC) at [49]
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