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Jacobs UK Limited v Skanska Construction Limited [2017] EWHC 2395 (TCC) Is it unreasonable and oppressive for a party to withdraw an adjudication referral – and then seek to adjudicate the same or sub

The claim that came before Mrs Justice O’Farrell DBE in Jacobs UK Ltd v Skanska Construction Ltd concerned a party’s right to commence an adjudication, withdraw it...

...(apparently due to the unavailability of counsel), and then make a second adjudication referral that was in respect of the same or substantially the same dispute. Jacob’s claim was that such a course of action was unlawful and that the court should issue and injunction restraining Skanska from proceeding with the second adjudication – as well as paying the costs thrown away by Jacob’s in defending the first adjudication. The right to costs being said to arise because the first adjudication was not limited to the terms of the Scheme for Construction Contracts but included ad hoc provisions with regards to the adjudication timetabling that had been breached by Skanska.

The Judge summarised Jacob’s case as follows: “Jacobs had a right to a resolution process which was fair to both parties and did not confer an uncovenanted advantage on the referring party beyond that implicit in the rough and ready adjudication process. Jacobs invites the court grant relief to protect Jacobs’ right to a procedurally fair process of the dispute which is not unreasonable and oppressive [19].” Whilst the case advanced by Skanska was essentially that “….there is no concept of abuse of process in adjudication and a referring party is free to obtain whatever tactical advantage it can. A party has the right to start adjudication in relation to a dispute at any time. This gives a party an unrestricted right to start, abandon and pursue serial adjudications in respect of the same dispute [20].”

Having reminded herself of the relevant provisions of the Housing Grants Construction and Regeneration Act 1996 and the Scheme the Judge also briefly stated the legal principles to be applied in the present case. First, there is no express on implied restriction on a party precluding it from withdrawing a claim after referral to adjudication: Midland Expressway Ltd. v Carillion Construction Ltd. [2006] EWHC 1505 paras [100] & [101]. Second, that right to withdraw after referral persists irrespective of the motive for the withdrawal: Lanes Group Plc v Galliford Try Infrastructure Ltd. [2012] EWCA Civ 1617 paras [38] to [40]. Third, the principle of abuse of process does not apply to adjudications: Connex South Eastern Ltd. v MJ Building Service Group Plc [2005] EWCA Civ 193 at para [40]. Furthermore, where a party has withdrawn a referral to an adjudicator there is nothing to prevent it referring the same dispute to another adjudication – save for the Court’s residual jurisdiction under s.37 of the Senior Courts Act 1981 to restrain the subsequent adjudication where it could be characterised as both unreasonable and oppressive.

The learned judge concluded that Skanska was entitled to withdraw its adjudication referral and then commence a further adjudication in respect of the same or substantially the same dispute – and there was nothing in the present case that would allow the court to conclude that was a course of action that could be characterised as both unreasonable and oppressive, such that the court should restrain it by way of an injunction. Jacobs were though entitled to their wasted costs (if any) arising from the discontinued first adjudication. However, it should also be noted that the Judge was firmly of the opinion that there was not an unfettered right for a party: “… to start and stop serial adjudications in respect of a claim. Subjecting a party to serial adjudications in respect of the same claim and requiring it to incur irrecoverable costs could amount to unreasonable and oppressive behaviour. It is a question of fact in each case….. [33].”

Tim Sampson / 13th Oct 2017


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