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Reserving your position on jurisdiction during adjudication

Ove Arup & Partners International Ltd v Coleman Bennett International Consultancy plc [2019] EWHC 413 (TCC)

In October 2018, an adjudicator decided that Ove Arup (“OA”) was entitled to a payment of £389,268.43 plus interest from Coleman Bennett (“CB”) in relation to engineering services OA had provided for a ‘Northern Powerhouse’ project for proposed magnetic levitation railways. OA sought summary judgment so that the adjudication could be enforced.

CB disputed the claim on the basis that the contract was not a construction contract at all for the purposes of the Housing Grants, Construction and Regeneration Act 1996; it claimed that the statutory adjudication scheme was not engaged because OA had essentially merely carried out a study. CB also argued that the adjudication pertained to more than one contract or dispute, which again was outside the scheme’s jurisdiction. Thirdly, CB claimed that the adjudicator had wrongly purported to decide matters which neither he (nor the TCC on this application) could properly determine, namely whether or not this was indeed a construction contract and whether it had effectively been varied.

The Court was assisted on the question of waiver by the Court of Appeal’s decision in Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited [2019] EWCA Civ 27, which had recently been handed down. Coulson J had concluded that the purpose of adjudication would be defeated if a party could simply reserve its position on jurisdiction, rather than simply challenging it ‘appropriately and clearly’. Here, the points taken by CB had been ventilated in its initial response in general but not specific terms, as no details had been given as to the basis for its objections on a number of issues. It could not have been clear to the adjudicator what the basis of the challenge to his jurisdiction might be, as the adjudicator had himself pointed out. Those objections which were more specifically outlined had been addressed by the adjudicator and resolved in AO’s favour.
Mrs Justice O’Farrell also concluded that in reality, CB had lost its right to challenge jurisdiction simply because of the wording of its pleaded response to AO’s claim which amounted to an admission.

CB’s argument that the consultation on the feasibility of a transport scheme could not be a construction contract for the purposes of the Act was also at odds with a plain reading of ss.104-105 of the Act, which affords a broad definition to such contracts.

Summary judgment was therefore granted to AO in the amount sought.

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Ove Arup & Partners International Ltd v Coleman Bennett International Consultancy plc [2019] EWHC 413 (TCC)