2) Jurisdiction – excess of and failure to exhaust – reservation of position Hochtief Solutions A G and others v Maspero Elevatori S.p.A [2020] CSOH 102 Lord Clark The pursuers sought to enforce an adjudicator’s award in its favour. The defenders sought to reduce the award on the grounds that the adjudicator had both (i) exceeded his jurisdiction and (ii) failed to exhaust his jurisdiction on another matter, in that he had failed to consider a ground of defence. The pursuers said the challenges were without merit and in any event the defenders had failed to adequately reserve their jurisdictional objection. The pursuers had been engaged by the Scottish Ministers to design and construct a replacement bridge over the Forth of Firth to be known as the Queensferry Crossing. They in turn engaged the defenders by subcontract entered into in July and August 2012 to design, manufacture and install three lifts, one in each of the towers of the bridge. The parties were in dispute over approach and progress and in November 2018 the pursuers determined the defenders’ employment, claiming their costs, principally, of employing other subcontractors to start afresh and re-do the defenders’ work. The issues of whether the sub-contract had been validly terminated and, if so, whether the sums claimed by the pursuers were required to be paid by the defenders, were referred to adjudication. The adjudicator decided the subcontract had been validly determined and awarded the pursuers sums totalling £1.25m.
Excess of jurisdiction The adjudicator was required to decide whether an agreement reached in July 2018 had varied the subcontract or was a new agreement. The defenders contended that the adjudicator exceeded his jurisdiction by proceeding to make his award under the sub-contract when the dispute actually fell under a separate and distinct “new agreement” reached at the meeting on 24 July 2018. This point was raised in its response in the adjudication and the defenders went so far as to say that the ‘new agreement’ was outwith the scope of the adjudication. They did not however reserve their position and they left the adjudicator to decide the issue. In its reply, the pursuers said it was not clear whether the defenders were making a challenge to the adjudicator’s jurisdiction; that any such challenge must be made in clear terms; that they were aware from the outset that the pursuer would be relying on the July agreement as a variation to the subcontract and had 4 weeks in which to object to jurisdiction and it was now too late to do so. In its rejoinder, the defenders reiterated that the dispute arose under the subcontract and it was that dispute the adjudicator was asked to determine and not another dispute arising under the July agreement. They did not reserve their position or right of challenge in the event that the adjudicator decided against them on the point. In his decision the adjudicator said “11.24 The Respondent submits that the minutes of meeting of 24 July 2018, being a separate agreement, is outwith the scope of my jurisdiction and that I determine the dispute of termination by reference to the Subcontract. Having decided that the minutes of meeting 24 July 2018 is not a separate contract but a variation to the Subcontract, then it falls within the scope of my jurisdiction. 11.25 If I am wrong in that decision, then I consider that the challenge to my jurisdiction has not been made at the outset of the adjudication procedure when it ought to have been known. The Respondent has not set out any challenges to my jurisdiction appropriately and clearly.”
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