7. Natural Justice See DSVG Façade Ltd v Conneely Facades Ltd (page 3) 8. Natural Justice—disclosure and reasons Vinci Construction UK Ltd v Beumer Group UK Ltd 18 In what was the seventh in a series of adjudications between the parties, the Claimant (“Vinci”) sought summary judgment in respect of an adjudicator’s decision against the Defendant (“Beumer”) for £9,671,500 and interest. Under the NEC3 subcontract with bespoke amendments, Beumer as subcontractor was to provide a baggage handling system at Gatwick airport. Following an earlier court determination about the operability and enforceability of liquidated damages for delay, Vinci issued a payment certificate setting out its entitlement to £9,671,500 as liquidated damages. Beumer denied any entitlement. A dispute crystallised which Vinci referred to adjudication before Mr Brian Eggleston (who had previously been appointed in adjudications 4 and 6). Beumer raised three objections to enforcement: 1. The adjudicator made findings which were inconsistent with his findings in a previous adjudication and so deciding something already decided and doing this in a manner inconsistent with the previous decision. Beumer attacked the finding that its applications for extension of time lacked sufficient substantiation and delay analysis; 2. The adjudicator did not give any reasons or any adequate reasons for his decision on key issues; 3. The adjudicator did not disclose, or order Vinci to disclose material from a previous adjudication (between Vinci and another subcontractor) which Beumer had good reason to believe would have demonstrated that the case Vinci was advancing in the present adjudication was inconsistent with the case it had advanced in that other adjudication. The Court dismissed all three complaints in essence because the evidence filed by Beumer did not support them. In doing so the Court made the following comments: 1. Whether the adjudicator was right or wrong as to the finding on the extensions of time was of no concern to the Court on enforcement. The need to have the right answer was subordinate to having the answer quickly. It was part of the dispute which he decided. Beumer must either litigate or arbitrate the matter. No issue of natural justice arose. Furthermore he was deciding an extension of time claim based on compensation events which he had not previously been asked to decide. Thus there was no inconsistency. It was also said the adjudicator had decided a point of law on the issue of time-barring, not referred to him. The answer to that was that Vinci did rely on the
subcontract time-barring provisions in its referral. It was thus an issue in the adjudication. 2. The authorities showed that to succeed, the complainant would have to show the reasons were “absent or unintelligible, and that as a result he had suffered substantial prejudice.” 19 At the heart of the complaint was the adjudicator’s treatment of the programming information. The Court found no difficulty in discerning the reasoning: the claims were made too late and were time-barred, and in any event failed for lack of supporting evidence and delay analysis. 3. The Courts concluded that the adjudicator was not asked to order disclosure and despite his giving Beumer every opportunity, no proper material was put before him that would have required him to do so, or to resign. The challenges to enforcement all failed. Summary judgment granted on the award. 9. Payment terms—whether providing an adequate payment mechanism CIMC MBS Ltd (formerly Verbus Systems Ltd) v Bennett (Construction) Ltd 20 CIMC MBS Ltd (“CIMC”) the subcontractor sought declarations that the payment terms in its subcontract with Bennett Construction Ltd (“Bennett”) as the contractor did not provide an adequate mechanism for determining what payments were due and when, pursuant to s.110(1)(a) of the Act. CIMCwas to design, supply and install pre-fabricatedmodular bedroom units for a hotel which Bennett was building for employer (K) in London. The hotel when constructed was to be run by operator (P). The units were to be fabricated in China and transported by sea to Southampton. The subcontract which incorporated the JCT Design and Build Sub-Contract 2011 form of contract provided for the sub-contract price to be in accordance with milestones thus: • Stage 1 payment – 20% on execution of the contract • Stage 2 payment – 30% on sign-off of a prototype room by P, K and Bennett in China • Stage 3 payment – 30% on sign-off of all snagging items by P, K and Bennett, in China • Stage 4 payment – 10% on sign-off of units in the port of Southampton • Stage 5 payment – 10% on completion of installation and any snagging Work under the subcontract was suspended for non- payment by K and CIMC referred a dispute over payment to adjudication. It sought various declarations including one that the milestone payment provisions in the subcontract were unenforceable because they did not comply with the requirement of s.110(1)(a) of the Act.
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