GT EQUITIX INVERNESS LTD AGAINST BOARD OF MANAGEMENT OF INVERNESS COLLEGE [2019] ScotCS CSOH

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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> GT EQUITIX INVERNESS LTD AGAINST BOARD OF MANAGEMENT OF INVERNESS COLLEGE [2019] ScotCS CSOH_46 (18 June 2019) URL: http://www.bailii.org/scot/cases/ScotCS/2019/2019_CSOH_46.html Cite as: 2019 GWD 22-333, 2019 SLT 957, [2019] CSOH 46, [2019] ScotCS CSOH_46

[1] The pursuer seeks enforcement of an adjudicator’s award in its favour dated 20 January

2019 (“the Decision)” issued by Dr Robert Hunter (“the Adjudicator”) following an adjudication

between the parties (“the second adjudication”). The defender resists this and seeks reduction

of the Decision ope exceptionis. While the Decision was in the sum of £828,091, the pursuer seeks

decree for payment in the sum of £499,014.68. This is to reflect a sum said to have been paid by

[2] The defender’s grounds of challenge to enforcement of the Decision are as follows:

(1) Issue 1: Jurisdictional challenge: the defender argued that the appointment

(i) because the pursuer circumvented the procedure under the parties’

contract (“the Project Agreement”, as after defined) by unilaterally

the panel of adjudicators next due to be appointed to retire (“the

(ii) because the pursuer failed to follow the mandatory procedure in the

Project Agreement for referral of a dispute to adjudication (“the

(2) Issue 2: Failure to exhaust jurisdiction: separately, the defender argued that

the Adjudicator adopted an incorrect interpretation of the Project Agreement.

As a consequence, the Adjudicator adopted too restrictive an approach and

he failed to consider a significant line of defence (essentially one of set-off of

sums claimed in respect of certain EDF invoices). This constituted a failure to

exhaust his jurisdiction. While this was also presented in the alternative as a

breach of natural justice, because the Adjudicator was said to have applied an

argument not canvassed with the parties, this alternative formulation was not

advanced (or was not advanced with any enthusiasm) at Debate. I shall refer

The Decision fell to be reduced ope exceptionis if one of these grounds was

[3] Parties lodged Notes of Arguments in advance of the debate, together with a joint

bundle of 54 productions and a joint bundle of cases. They were unable to conclude the

debate on the allocated day two weeks ago and the debate was continued to a second day

last week. They also produced further written submissions in advance of that continued

diet. I have had regard to all of the parties’ written and oral submissions. I do not propose

[4] Parties did not lodge a joint minute. However, Senior Counsel made extensive

reference to the Project Agreement (as after-defined) and also to a number of communings

between the parties or by one of the parties to third parties (the retiring adjudicator,

Mr Robert Blois-Brooke (“Mr Blois-Brooke”) or the Chartered Institute of Arbitrators

Scottish Branch (“the CIArb SB”)). So far as necessary, I summarise those matters in the next

two sections of this Note (headed “Background” and “Chronology of events”). The

defender formally reserved its position to the effect that, simply because a matter was

narrated in the Joint Chronology, it was not necessarily an “agreed” act. Evidence might

still be required to inform the Court’s understanding of the phrase “as soon as practicable”

(in paragraph 4.2.4 of Schedule Part 20 of the Project Agreement), on the basis it might be

fact-sensitive, or to prove that it would have taken longer than six hours to convene the

defender’s Board of Management. The pursuer accepted that evidence may be necessary if

the defences were relevant. Otherwise, it was not suggested that evidence would be

required to resolve this dispute. Mr Moynihan QC, for the pursuer, sought decree de plano.

[5] The parties entered into an agreement on or about 29 May 2013 (“the Project

Agreement”) in terms of which the defender engaged the pursuer to procure the design,

construction, finance and maintenance of a new College campus. It is necessary to note

certain provisions in the Project Agreement in order to understand the prematurity

argument. The relevant provisions in the main body of the Project Agreement are as

(1) Clause 34.4 (“Disputes”): this provided inter alia that parties “shall use all

reasonable endeavours“ to resolve a dispute falling within clause 34.4 within

10 Business Days of the dispute arising. If that failed, either party could refer

the matter to the dispute resolution procedure (which is set out in Schedule

(2) Clause 34.6 (“Set-Off”): this entitled the defender to set-off certain sums in

(i) Clause 64.1 this provided that all notices were to be in writing and,

further, that “all certificates, notices or written instructions to be given

under the terms” of the Project Agreement shall be served by sending

the same by first class post, by hand, or by email. Notices to the

defender would be marked “FOA: Principal and Chief Executive”,

project-specific email for the defenders. This was different from

(ii) Clause 64.5 this contained a deeming provision to the effect that

Information System of the intended recipient otherwise, if sent after

[6] Schedule Part 20 to the Project Agreement set out the “Dispute Resolution

Procedure” (“the DRP Schedule”). I shall refer to the relevant provisions as “paragraphs” in

order to distinguish these from the clauses in the main body of the Project Agreement just

(i) Paragraph 4.1: By paragraph 4.1 either party was permitted at any time to

give the other party notice of its intention to refer a dispute to adjudication

(“Notice of Adjudication”) and which required at the same time to be copied

to the intended adjudicator (selected in accordance with paragraph 4.2).

(ii) Paragraph 4.2: subject to an exception here not relevant, the nominated

adjudicator was to be selected “on a strictly rotational basis” from the

Construction Panel and an Operational Panel. The Construction Panel was

the relevant panel in this case and was comprised of three adjudicators

(known as “Panel Members” and identified in paragraph 7 of the DRP

Schedule). The initial selection to the Construction Panel required to take

(iii) Paragraph 4.2.4 to 4.2.6: As these provisions are central to the jurisdictional

“4.2.4 if any member of either panel resigns during the term of the

if [the parties] are unable to agree on the identity of the adjudicators to

adjudicators(s) within seven (7) days of any application for such

in the event that the first panel member is unable or unwilling to

fails to respond within two (2) days of the date of the Notice of

Adjudication, then the Referring Party shall invite the person next in

line to act as Adjudicator. In the event that the second panel member

is unwilling or unable to confirm acceptance of his appointment as

Adjudication or if the parties disagree as to the relevant panel of the

adjudicators to be used, then the Referring Party may apply to the

Institute of Arbitrators Scottish Branch shall within seven (7) days of

the date of the Notice of Adjudication, nominate an Adjudicator (who

appointment as Adjudicator) to determine the Dispute described in

(iv) Paragraph 7: in terms of this paragraph Mr Blois-Brooke was the second-

named Panel Member and, in the absence of retirement, would have been the

next adjudicator to serve in compliance with the requirement of strict rotation

provided for in paragraph 4.2. The third-named Panel Member was Mr

[8] It is important to note that the appointment of members to the Construction Panel is

provided for in paragraphs 4.2.4 and 4.2.5; the referral to a particular adjudicator to initiate

[9] Paragraph 4.2.4 envisages that a panel member may resign from the panel and, in the

first instance, a replacement adjudicator is to be appointed by the parties “as soon as

practicable”. In the debate before me, parties were agreed that any replacement adjudicator

takes the same position on the list of panel members (in para 7) of the adjudicator who is

[10] If one of the parties wished to initiate an adjudication, then the selection of the panel

member was to be made from the list of Construction Panel members as it stands at the date

of the Notice of Adjudication. I did not understand Mr Walker to dissent from this as a

generality; the defender’s criticism is that the pursuer “manipulated” this list (ie the

interference argument) so as “to avoid” the appointment of Mr Howie.

[11] While the DRP Schedule provides for different forms of dispute resolution, it

contains a discreet procedure within the contractual adjudication scheme (comprising

paragraph 4 of the DRP Schedule), in paragraph 4.2.5, if parties are “unable to agree” on the

appointment of an adjudicator to one of the panels or, if they are unable to agree the identity

of any replacement adjudicator. The prematurity argument engages paragraph 4.2.5. As

will be seen, the pursuer operated this discreet procedure, to replace Mr Blois-Brooke. The

defender contends that no dispute had yet crystallised about the identity of any adjudicator

to replace Mr Blois-Brooke such as to entitle the pursuer to operate the paragraph 4.2.5

[12] There is no express provision in the Project Agreement or the DRP Schedule

governing the scenario that arose here, where the adjudicator who falls to be appointed in

accordance with the requirement of strict rotation had just resigned and no replacement yet

appointed. (Mr Walker QC likened this, somewhat dramatically, to a “perfect storm”.)

While parties’ positions were initially fluid, it became common ground between them that in

that scenario the Project Agreement is not prescriptive. In other words, a party wishing to

initiate an adjudication could either first seek the appointment of a replacement adjudicator

(under para 4.2.4); and operate the procedure under paragraph 4.2.5, if that is not agreed

(assuming the pre-conditions for para 4.2.5 are met (which in this case the defender

disputes)). Alternatively, the referring party could adhere to the strict rotation, and simply

commence the adjudication (under para 4.2.6) using the adjudicator who next falls to be

appointed. Notwithstanding that apparent common ground, one of the arguments the

defender advanced was that, nonetheless, the pursuer was first obliged to make the

[13] Parties lodged a Joint Chronology, cross-referenced to documents in the Joint Bundle.

This dispute arises out of the second adjudication between the parties under the Project

[14] Some reference was made to the first adjudication (commenced on 9 November 2018)

(“the first adjudication”), as affording a context for parties’ understanding of their actions

preceding the commencement of the second adjudication (with which this action is concerned.)

The pursuer commenced the first adjudication by notice sent on 9 November 2018. While there

was a failure message on 14 November from the project-specific email agreed between the

parties, the defender’s Principal and Chief Executive, Professor O’Neil, confirmed on 15

November receipt of the electronic and hard copies of the notice of the first adjudication. The

first adjudicator was appointed on 16 November and issued directions (on 19 November)

requiring the defender to respond by 22 November. The defender made no response prior to

that date. On 23 November the first adjudicator advised that he was bound to determine the

first adjudication regardless of whether the defender participated. Later that same day the

defender contacted the pursuer’s agents to request a sist in order to settle the subject matter of

the first adjudication. Against this background, the pursuer argued that the conduct of the first

adjudication demonstrated a pattern of delay on the part of the defenders (said to be illustrated

by the defender’s failure to comply with the timetable imposed by the first adjudicator and its

request to settle the first adjudication). The defender argued that the defender’s initiation of

Events culminating in the commencement of the second adjudication

[15] The Joint Chronology, which ran to five pages, details events between June 2018 and

April 2019. It suffices for present purposes to note the following:

(1) 22 November 2018: The pursuer’s agents emailed Mr Blois-Brooke on

22 November 2018 (which email was cc’d to the professional email address of

the defender’s chief executive, Professor O’Neil). After identifying the parties

adjudicator panel created for the Project. A copy of Schedule Part 20 of

retired. If you are no longer in a position to perform the role of

adjudicator I wonder if we might invite you to resign from the panel

(2) 26 November 2018: Mr Blois-Brooke confirmed that he is retired and he

“You are correct that I have now retired and in the circumstances wish

Inverness College project as set out in Schedule Part 20 of the contract.

I should be grateful if you would inform the Parties to the Project

His email was cc’d inter alia to the defender’s Professor O’Neil.

(3) 26 November 2018: the pursuer’s agents emailed the defender’s

Professor O’Neil (at 14:47) attaching a letter (respectively, “the Email” and the

“Letter”). The Letter explained for whom the pursuer’s agents were acting. It

referred to the list of three panel members for the Construction Panel set out

in paragraph 7 of the DRP Schedule. It noted that Mr Blois-Brooke “has now

retired and resigned from the Panel”. The relevant copy correspondence with

26 November described in the preceding sub-paras.) The Letter continued:

during the term of the Agreement, a replacement adjudicator shall be

appointed as soon as practicable. We therefore propose the following

Three names were provided but without any of their contact details. (The

Adjudicator was not listed among these three names.) The Letter concluded

asking for a reply by return to confirm the defender’s “agreement to any of

the aforementioned as replacement adjudicator for the Construction Panel”

and advised that if no response was received by noon the next day (ie

Tuesday, 27 November 2018), “we will consider the parties are unable to

agree on the identity of the replacement adjudicator and we will therefore

apply to the [CIArb SB] for a replacement adjudicator to be appointed.”

(4) 27 November 2018: the Letter was sent by recorded delivery and the proof of

delivery showed that this was delivered at 8.26 am on 27 November 2018.

(5) 27 November 2018: the pursuer’s agents wrote to the CIArb SB (“the Letter to

the CIArb SB”) seeking the appointment of a replacement adjudicator to the

Construction Panel in terms of para 4.2.5. The Letter to the CIArb SB was

sent as an attachment to an email on 29 November 2018 (timed at 12:22)

which was copied to inter alia the defender’s Professor O’Neil. After

identifying the parties, the project and after referencing the dispute resolution

procedure in paragraph 4.2.5 of the DRP Schedule, it was explained that the

second-named panel member, Mr Blois-Brooke, had written to confirm that

he was now retired and has resigned from the Construction Panel (the

exchange of emails with him described in para [15(1) and (2)] were enclosed).

“At paragraph 4.2.4 of the procedure, if any member of either Panel

resigned during the term of the Agreement, a replacement adjudicator

shall be appointed as soon as practicable. The parties to date have

been unable to agree on the identity of the replacement adjudicator.

We are therefore writing to you to request that the Chairman (or Vice

Chairman) for the time being of the [CIArbSB] appoints a replacement

adjudicator to the construction panel as soon as possible and in any

(6) 29 November 2018: the CIArb SB appointed the Adjudicator to the Construction

Panel. Their email enclosing the Notice of Selection of the Adjudicator (timed at

(7) 29 November 2018: the pursuer’s agents forwarded by email (timed at 14:24)

the CIArb SB’s email, for its information. That email, which was sent to a

Lindsay Ferries of the defender (as wll as cc’d to Mr O’Neil), explained that

Professor O’Neil had been copied in on the relevant correspondence and

asked if the defender required hardcopies of the communications from the

CIArb SB. The letter concluded by asking if the pursuer’s agents “should be

using a different email address in order to communicate with the Board of

(8) 29 November 2018: the pursuer’s agents commenced the second adjudication,

(i) the Adjudicator’s email of 13 December 2018 noting that the defender

(as “Responding Party”) had ignored his direction seven days earlier

requiring a response by 12 December 2018, and had also ignored his

request on 13 December asking if the defender was participating in

the Adjudication; and the defender’s request later on 13 December

2018 for an adjournment “to allow the respondents to review the

(ii) The email from the defender’s agents on 19 December 2018, shortly

after they were instructed, challenging jurisdiction on the basis (now

appointment for the second adjudication without first having been

appointed to the Construction Panel (which, in fact, had happened,

albeit the regularity of that is the subject-matter of the prematurity

[17] The defender argues that the correspondence from the pursuer’s agents to Mr Blois-

Brooke (set out in para [15(1) and (2)], above) constituted an interference with the intended

machinery of the dispute resolution procedure in the DRP Schedule. In essence, it was

argued that the pursuer “unilaterally interfered” with the dispute resolution procedure

envisaged and that the pursuer “procured” Mr Blois-Brooke’s resignation. It did not matter,

it was argued, that the pursuer’s agents’ email to Mr Blois-Brooke was also copied to the

defender’s Professor O’Neil. This did not detract from the “unilateral” character of the

pursuer’s agents’ approach to Mr Blois-Brooke. The damage had been done.

[18] The case of IDE Contracting Limited v RG Cambridge Limited, [2004] EWHC 36 (TCC)

(“IDE”), was said to illustrate the proposition that interference in the appointment process

can vitiate the subsequent appointment of an adjudicator by depriving him of jurisdiction

(unless the respondent has submitted to the adjudicator’s jurisdiction). That case was also

support for the proposition that the defender did not require to show it was prejudiced by

the irregularity (because in that case the counterargument, that the irregularity had no

[19] Mr Walker advanced a subsidiary criticism that the Email had not been sent to an

individual within the defender who had had practical involvement with the project, namely

Lindsay Ferries. He contrasted the omission to do so in the emails recorded at

paragraph [15 (1), (2), (3) and (5)] above with the pursuer’s agents’ email of 29 November

2018 advising of the CIArb SB’s appointment of the Adjudicator to the Construction Panel.

While it is now accepted that Mr Blois-Brooke had resigned before the Notice of

Adjudication had been issued (the defender had previously objected to the Adjudicator’s

appointment on the incorrect premise that Mr Blois-Brooke had not yet resigned), the

defender contends that the pursuer engineered or “procured” that resignation. This, it was

[20] The defender contends that there should have been no prior communication to

Mr Blois-Brooke to ascertain his availability. Instead, the pursuer should have served the

Notice of Referral on Mr Blois-Brooke (the next panel member to be appointed following

strict rotation); and, if it transpired that he was unable or unwilling to accept the referral,

then the procedure in the latter part of paragraph 4.2.6 should have been operated. On this

approach, Mr Howie QC would have been the appropriate adjudicator in terms of the

Project Agreement. The defender would have had the benefit of the few days while that

process was operated. Furthermore, parties had taken care to agree the identity of the panel

members of the Construction Panel. As a result of the pursuer’s “interference”, the defender

has been denied the services of one of the pre-agreed adjudicators, in this instance Mr

Howie QC, and it had had a person whom they had not agreed included within the

[21] Mr Moynihan took issue with the insinuation that the pursuer “procured”

Mr Blois-Brooke’s resignation and invited the Court to reject the characterisation of the

pursuer’s agents’ email to him on 22 November 2018 as “interference”. A plain reading of

that email simply did not support such an interpretation. He emphasised the open-ended

nature of the enquiry in the phrase, “If you are no longer in a position to perform the role of

adjudicator…” (see para [15 (2)], above). This email did not mandate a response. It was

entirely open to Mr Blois-Brooke to decide if he was in a position to perform the role of an

adjudicator. If he had been willing, then paragraph 4.2.6 would have come into play.

However, after he indicated his intention to resign, the pursuer’s agents approached matters

in a perfectly sensible way. All his resignation did was to trigger paragraph 4.2.4 and this is

what the pursuer’s agents then followed. The case of IDE was not relevant as that concerned

the side-lining of an adjudicator who remained eligible for appointment. That case was,

accordingly, distinguishable and inapplicable to the facts of the present case.

[22] In my view, the submissions of the pursuer are to be preferred. A fair reading of the

email exchange of 22 and 26 November 2018 between Mr Blois-Brooke and the pursuer’s

agents simply does not support the insinuation of “interference” the defender sought to

advance or any other underhanded conduct on the part of the pursuer or its agents. The

pursuer’s agents’ communication with Mr Blois-Brooke was, in my view, sensible,

appropriate and above criticism. They had heard via a professional connection that he was,

or might be, retired. They wrote in open-ended language to clarify if he were retired (not to

direct that he should retire). Mr Walker’s suggestion that one did not know whether Mr

Blois-Brooke might nonetheless have accepted a referral, had one been made to him, is

untenable. It is flatly contradicted by the clear words of Mr Blois-Brooke’s response: “…I

have now retired and in the circumstances wish to resign from the Construction Panel of

Adjudicators….” (emphasis added). Mr Blois-Brooke was extricating himself from this kind

of work and was indicating this in appropriately polite but unambiguous terms.

Furthermore, on no view could the email of 22 November 2018 be characterised as

“unilateral” when it was copied by email to the appropriate official, namely the chief

executive (Professor O’Neil), and using his current professional email address. It would be

the triumph of formalism over commercial or common sense to require the pursuer to serve

a Referral Notice to Mr Blois-Brooke (for the purposes of operating paragraph 4.2.6) after it

[23] As noted above, at paragraph [12], upon the resignation of Mr Blois-Brooke, the

pursuer had a choice. In terms of paragraph 4.2.6 it could have sent the Notice of Referral to

the third–named panel member, Mr Howie QC. It did not do so. (Parenthetically, I should

note that there was nothing in the material I have considered which affords any foundation

for Mr Walker’s suggestion that the pursuer were seeking “to avoid” appointing Mr Howie

QC.) The pursuer’s other option was first to seek a replacement panel member in terms of

paragraph 4.2.4. It did so and recommended three names to the defender. Absent a

response, it then applied to the CIArb SB in terms of paragraph 4.2.5. In doing so, it was

foregoing the prospect of participating in the selection of an individual known to it to the

Construction Panel. The Adjudicator was not one of those named in the pursuer’s list. This

is the very opposite of “manipulation” of a process to secure a desiderated outcome.

Accordingly, there is no substance to the allegation of manipulation.

[24] In my view, IDE is readily distinguishable on its facts. In that case the judge held that

the prescribed contractual procedure was that the application had to be made to the sole-

named adjudicator in the contract, and refused by him, before a request could be made to the

CIArb for appointment of a replacement. The outcome of the informal contact the

prospective referring party had had with the sole-named adjudicator simply ascertained that

he was busy. It was in that context that the claimant’s direct application to the CIArb was

found to have “bypassed” the prescribed contractual procedure (see para 9). In this case, as

parties accept that the pursuer had a choice between operating paragraph 4.2.6 (to seek to

initiate the second adjudication) or paragraph 4.2.4 (to seek a replacement adjudicator), no

prescribed order or procedural step was bypassed. In any event, and in my view fatally for

the defender in this case, the court in IDE observed that the claimant was bound first to

contact the only named adjudicator in the agreement “unless he has already indicated to

parties that he is unwilling or unable to act”. That is precisely the circumstance here and,

accordingly, to the extent that the facts of the instant case and IDE coincide, that case

[25] It follows that I do not accept that the pursuer’s agents’ email exchange with

Mr Blois-Brooke constituted any “interference” with the machinery in paragraph 4.2.4, much

less that it affected or tainted any subsequent involvement of the replacement adjudicator

selected by the CIArb SB – subject, of course, to the prematurity argument to which I now

[26] The second argument under the jurisdictional challenge was the “prematurity”

(1) It was a precondition of any application to the CIArb SB under the latter part

of clause 4.2.5 that there was a dispute between the parties in relation to any

(2) The tight timescale the pursuer’s agents sought to impose did not accord with

the phrase “as soon as practicable” under paragraph 4.2.4, regardless of

whether one commenced with the sending of the Email on 26 November 2018

para [15(3)] above), for which notice was less than 24 hours, or if one

commenced with the delivery of the recorded delivery letter to the defender

at 8.35 am on 27 November 2018) (see para [15 (4)]), for which notice was only

In support of the second strand of this argument, Mr Walker referred to other, longer

timeframes stipulated in the Project Agreement. He referred to the period of 28 days within

which any adjudication required to be completed (para 4.5), the allowance of two days to the

adjudicator approached first, and the allowance of four days to the second or fallback

adjudicator (under the first and second part of paragraph 4.2.6, respectively) and the period

of two days within which the defender was obliged to respond to the pursuer’s request for a

new dispute to be consolidated with an ongoing adjudication (as a “related” adjudication

under para 4.14). In addition, he noted that a period of seven days was allowed to the

CIArb SB under the latter part of paragraph 4.2.6, for appointment of a replacement

adjudicator to a panel. The deadline imposed in the Email and Letter was arbitrary and

unjustified. The defender did not require to show prejudice. In his second written

submission, Mr Walker added the argument that the need for speed did not extend to the

[27] In relation to the first limb of this argument, Mr Walker submitted that there was no

"dispute crystallised” between the parties regarding the appointment of any replacement for

Mr Blois-Brooke. A dispute only crystallised once a proposal for a replacement adjudicator

had been made and rejected. (The observation at para 25(3) of Amec Civil Engineering Ltd v

Secretary of State for Transport [2005] EWCA Civ 291 (“Amec”), that “a dispute does not arise

unless and until it emerges that the claim is not admitted”, and the further discussion at

paragraph 19 in Beck Interiors Ltd the UK Flooring Contractors Ltd [2012] EWHC 1808 (TCC),

were prayed in aid of this submission.) As the pursuer does not aver that the defender

rejected the names contained in the Email and Letter, it must be inferred, he argued that

rejection arose from the defender’s silence. However, no such implication arose. There was

no offer by the pursuer to prove why it was necessary to proceed at “breakneck” speed.

Mr Walker argued that any dispute was manufactured by the pursuer and the process it

adopted, and this precondition had not been satisfied by the time the pursuer’s agents made

the reference to the CIArb SB on 27 November 2018. Indeed, it was absurd to justify a

shorter period of time than might otherwise be imposed because one knew the legally

unrepresentative non—commercial recipient will be unlikely to meet it. Pace Mr Moynihan,

the period of inactivity (as Mr Monaghan characterised it) from the Notice of Adjudication

on 26 November 2018 to 19 December 2018 was irrelevant to the question of whether a

“dispute” had arisen about the identity of any replacement adjudicator.

[28] While he did not formally abandon it, Mr Walker did not refer in his oral submissions

to the defender’s contention for implication of a term requiring “reasonable notice”; the

defender’s Note of Argument simply stated that the law was authoritatively set out in Marks

& Spencer plc v BNP Paribas Securities Services Trust Co (Jersey Ltd) [2015] UKSC 72.

Mr Walker also argued that the Letter and Email had to comply with the requirements

[29] Mr Moynihan’s reply was to the effect that adjudications were extremely quick

[30] In respect of Mr Walker posing the question (in his second written submission), as to

whether the pursuer could have gone straight to Mr Howie QC, Mr Moynihan’s answer is

that this was purely hypothetical and the court should not consider this suggestion. By the

date of the Notice of Referral to the Adjudicator, there was no “vacancy” on the

Construction Panel. Secondly, Mr Walker’s argument was wholly inconsistent with the

challenge the defender’s agents advanced on behalf of the defender on 19 December 2018

(see para [15(9)(ii)], above). Nor was the defender’s proposed interpretation of the operation

of paragraph 4.2.6 “more commercially sensible”, as Mr Walker contended. Under reference

to comments made by Sir Rupert Jackson in S & T (UK) Ltd v Grove Developments

[2018] EWCA Civ 1998 (at para 121) Mr Moynihan cautioned the court about too readily imposing

its notions of commercial common sense. The defender’s argument highlighted the

contradictory interpretations adopted by the defender to suit its own convenience as it

perceived it from time to time. The court should simply resolve matters on the basis of the

facts presented, and should not consider what would have happened if there had been a

vacancy at the time the Notice of Adjudication had been served. The question Mr Walker

[31] Mr Moynihan submitted that the relevant time frame included the period up to

6 December 2018, by which date Professor O’Neil confirmed receipt of the Referral Notice

commencing the second adjudication. He stressed that this was a week after the pursuer’s

agents issued the Notice of Adjudication (on 29 November 2018) and the Adjudicator’s

confirmation (on 30 November 2018) that he was able to accept the appointment. At no

[32] Mr Moynihan noted that as both parties accepted that before a party could invite the

Chairman or Vice Chairman of the CIArb SB to appoint a replacement adjudicator to the

Construction Panel, it must be the case that the parties were “unable to agree on the

identity” of the adjudicator(s) to be appointed: paragraph 4.2.5. In response to Mr Walker’s

reference to a “dispute” (and the cases he cited expounding on that term), Mr Moynihan

stressed that “unable to agree” is different than “a dispute” or, indeed, the defender’s

assertion that there was “no crystallised dispute between the parties” when the pursuer

issued its request to the CIArb SB. There was no warrant to require a “crystallised dispute”

That was not the language of paragraph 4.2.5. The relevant wording was “unable to agree”.

He noted that whether a “dispute” has arisen is itself protean: Amec at paragraphs 29 to 31.

The wording “unable to agree” was, he submitted, an objective, factual phrase.

[33] In relation to the defender’s contention for a term to be implied that there must be a

reasonable time for a dispute to manifest itself, Mr Moynihan submitted that it was

unworkable to seek to imply a term that there would be “a reasonable” lapse of time (much

less a “crystallised dispute”) into paragraph 4.2.4. Where the Project Agreement was at

pains to identify a timeframe when that was necessary, it did so. However, it had not done

so in respect of paragraph 4.2.4. Mr Walker advanced no basis for implying any

qualification on the wording used. Finally, there was no requirement to serve a notice

complying with clause 64 as a precondition of operating a procedure under paragraph 4.2.4

[34] In determining the prematurity argument, it is important to bear in mind that the

pursuer’s action is an application to the court for enforcement of an adjudicator’s award. As

is now well established, courts will respect and enforce adjudicators’ awards unless it is

plain that the adjudicator has not decided the question referred to him or her, or s/he has

otherwise proceeded in a manner which is obviously unfair. Accordingly, it is only in

limited circumstances that courts will interfere with the decision of an adjudicator or refrain

from enforcing it: Carillion Construction Ltd v Devonport Royal Dockyard Ltd [2005] EWHC 718

(TCC) at paragraphs 85-87; AMEC Group Ltd v Thames Water Utilities Ltd [2010] EWHC 419

(TCC) at paragraphs 21 and 54. Furthermore, the court does not review the adjudicator’s

decision before deciding whether or not to enforce it. So long as the adjudicator was validly

appointed and acted within his or her jurisdiction, answered the question posed and

observed the rules of natural justice, his or her decision will be enforced.

[35] Each party contends that the onus was on the other to make the requisite averments.

Having regard to the character of the pursuer’s action as one to enforce an adjudicator’s

award and to the approach the courts generally take to such actions, it is in my view

incumbent upon a defender to plead and establish a basis to justify a court in refraining

from the enforcement of an adjudicator’s award. This would include breach of a material

precondition to any appointment. It matters not, in my view, that the source of the

adjudication scheme in this case was contractual, rather than statutory. It has the same

rationale underpinning it, being the expeditious resolution of parties’ disputes.

[36] On the question of the meaning of “as soon as practicable”, it is in my view

significant that the defender nowhere pleads any fact or circumstance to support its legal

submission that what the pursuer’s agents did was dissonant with the phrase “as soon as

practicable”. I found Mr Walker’s reference to other stipulated timeframes in the contractual

adjudication scheme to be unpersuasive. Those are fairly standard time limits applicable to

specific or predictable stages in an adjudication. In my view, the absence of a timeframe in

paragraph 4.2.4 was intentional and to ensure that the resignation of a panel member (a

circumstance which was outwith the control of the parties and unpredictable) did not

disrupt the appropriate expedition with which any contractual adjudications and matters

ancillary to them should be conducted. Nor am I persuaded by Mr Walker’s submission

that different considerations apply to the “pre-notice” conduct. While Mr Walker sought to

argue that different considerations might apply to “pre-notice” conduct, this is to ignore, in

this case, the operation of paragraph 4.2.5. That procedure, for the appointment of a

replacement adjudicator, had already been initiated by the Email and Letter.

[37] Furthermore, the defender had already had some prior notice of the pursuer’s likely

intentions in the form of the pursuer’s email exchanges with Mr Blois-Brooke. In respect of

that part of the contractual scheme of adjudication, it provided that a replacement

adjudicator is to be appointed “as soon as practicable”. It is notable that the phrase “as soon

as practicable” is not qualified by the element of “reasonably” (cf the use of this qualifier in

paragraph 4.14 in relation to a failure on the part of the defender to respond within two days

to a request that a new adjudication be treated as a Related Adjudication). The defender

makes no averments as to what timeframe would have been “practicable”. Correctly

analysed, for the reasons discussed at paragraph [35] above, the onus is on the defender to

aver and establish the facts and circumstances relevantly to put in issue why the pursuer’s

timeframe breached the requirement to proceed “as soon as practicable” in paragraph 4.2.4.

[38] I am fortified in this view by the observations of Jackson J (as he then was), and

quoted with the approval by the Court of Appeal in Amec (at paragraph 30, per May L J,

quoting paragraph 68 (5) of Jackson J’s decision at first instance) to the effect that “[t]he

period of time for which a respondent may remain silent before a dispute is to be inferred

depends heavily on the facts of the case and the contractual structure”. The defender has no

relevant or specific averments as to facts and circumstances. (Mr Moynihan notes that the

defender does not aver that the outcome of the Email or Letter would have been any

different.) As for the contractual structure, paragraph 4.2.4 of the DRP Schedule enjoins

parties to agree “as soon as practicable” and it does so in the context of a contractual scheme

of adjudication (with the attendant need for speed). I find persuasive May L J’s further

comment in Amec (at para 31 (3)), anent the interpretation of a dispute resolution clause, that

“[c]ommercial good sense does not suggest that the clause should be construed with

legalistic rigidity so as to impede parties starting timely arbitration proceedings. The whole

clause should be read in this light.” While the language of the clause under consideration in

Amec was different, in my view those comments apply with equal force in this case.

[39] In considering the prematurity argument, I accept Mr Moynihan’s submission that it

is appropriate in this case to look at the period immediately preceding and following the

request the pursuer’s agents made to the CIArb SB. One may ask, objectively what did the

defender know (or what could it have reasonably anticipated) as at the date of the Email and

Letter? By that date, the defender had been involved in the first adjudication, which it

brought to an end by an offer (on 23 November 2018) to sist the first adjudication the day

after having failed to comply with the adjudicator’s timetable; the pursuer was taking steps

(by email on 22 November 2018) to ascertain the availability of Mr Blois-Brooke, who would

have been the next adjudicator to be selected (in accordance with the strict rotation required

by para 7 of the DRP Schedule) if he had not retired; and Mr Blois-Brooke had stated

unequivocally (in his email of 26 November 2018) that he had retired.

[40] Accordingly, by the time the Email or Letter was received (on 26 or 27 November 2018),

the defender, and Professor O’Neil in particular, could have been in no doubt that an

adjudication was a quick procedure attended by short timetables used to secure a party’s

compliance with inter alia payment obligations under the Project Agreement. In this context, the

argument about compliance with clause 64 (governing notices) arises. I reject as inconsistent

with clause 64 Mr Walker’s submission that the Email or Letter required to be by a notice

complaint with clause 64. In any event, the pursuer does not rely on the deeming provisions in

clause 64. Mr Walker made much of the fact that no contact details were provided for the three

individuals named in the Email. Mr Moynihan replied that while there might have been some

force in this observation, if the defender had responded timeously and asked for them, it did

not do so. There was never any suggestion the defender endeavoured to seek more information

about the three individuals proposed in the Email, or that they were hampered in that enquiry.

Mr Moynihan described the defender’s non-admission about receipt of the Email as one of the

features of the defender’s case said to be lacking in candour. It does not aver or admit when the

Email was received, a matter likely to be readily ascertainable from its email server. The

defender confined its position on this issue to contending that Professor O’Neil did not

remember when he first opened the Email. I accept Mr Moynihan’s submission that it is not a

complete or candid answer simply to explain that Professor O’Neil could not remember when

he first read the Email. Again, if the defender wished to establish a relevant case to contest that

the timeframe (whether measured from receipt of the Email or delivery of the Letter) was

dissonant with clause 4.2.4, it was incumbent upon it to make the relevant averments. It did not

[41] In the very specific context of this case, the pursuer might reasonably infer that the

defender’s silence, even for a short period of time, was symptomatic of the inactivity it had

exhibited during the first adjudication. More to the point, the defender has not discharged

[42] In relation to the period after the commencement of the second adjudication, while I

place little weight on this, I accept Mr Moynihan’s submission that the defender’s silence for

some weeks was not insignificant. At no point did the defender state that more time was

needed; that the relevant communication was sent to the wrong person or the wrong email

address; or that the communication was misunderstood. The defender did not ask for more

time in order to consult its agents or to convene the Board of Management of the defenders

or, even, that it intended or required to do so. There is therefore some force in

Mr Moynihan’s submission that the defender did not object at the earliest opportunity.

While the defender seeks to meet this criticism by noting that objection was taken shortly

after the defender’s agents became involved a month or so later, it remains the case that

those grounds of objection did then not include the prematurity argument. Mr Walker’s

submission that the defender here was without legal representation or was a “non-

commercial entity” has, in my view, little merit. First, whether the defender is a “commercial

entity” or not, the defender has entered into the Project Agreement containing detailed

provisions for adjudication. The counterparty, the pursuer, can reasonably assume that the

defender understands what is required if those provisions are operated and to be complied

with. Secondly, the defender had just had experience of the alacrity with which

adjudications are conducted: it had sought to settle the first adjudication (commencing on

9 November 2018 and acknowledged by Professor O’Neil on 15 November 2018), after

[43] For completeness, I deal with the defender’s suggestion of an implied term (although

no particular wording is suggested). In my view, there is simply no relevant basis pled or

argued for the implication of any term of a “reasonable time” as suggested in the defender’s

first Note of Argument (albeit not advanced in oral submissions). There were no relevant

pleadings to support implication of a term. No attempt was made to bring the defender’s

case in line with Marks and Spencer. The omission to define “as soon as practicable” at the

end of paragraph 4.2.4 by reference to a stipulated period was, in my view, intentional and

not a drafter’s oversight. It would introduce uncertainty into a contractual scheme of

adjudication in which, in common with statutory adjudications, speed is of the essence.

Further, in my view it is not insignificant that the common qualifier of “reasonable” in such

a phrase was also omitted. Nothing within this part of the Project Agreement is redolent of

sloppy or careless drafting. The Project Agreement bears to have been negotiated between

highly skilled agents. The scheme of adjudication set out in paragraph 4 of the DRP

Schedule is a detailed, carefully constructed and complete scheme for resolution of disputes.

All of this leads me to reject the defender’s attempt to imply a term. To do so would be

inconsistent with the language and intent of this part of the DRP Schedule.

[44] In its Note of Argument the defender argued that the Adjudicator failed to address

the defender’s line of defence based on set-off of certain EDF invoices. It had been submitted

that the Adjudicator had done so, either because of a misunderstanding on his part of the

correct legal interpretation of the Project Agreement (thereby a failure to exhaust

jurisdiction) or because he considered a line of defence and excluded it on some basis which

had not been advanced by either party or canvassed by the Adjudicator with the parties (a

breach of natural justice). Mr Walker asked the court to note to paragraphs 332 to 363 of the

Adjudicator’s Decision and to clauses 34.4 and 34.6 the Project Agreement.

[45] The courts will not enforce a decision of an adjudicator who takes an unduly

restrictive view of his jurisdiction and who, as a consequence, fails to consider a significant

line of defence to the claim before him. Mr Walker referred to NKT Cables A/S v SP Power

Systems Ltd [2017] CSOH 38; 2017 SLT 494 and Joint Administrators of Connaught Partnerships

[46] Mr Moynihan submitted that this kind of challenge, however characterised by

Mr Walker, was misconceived. (In passing, he observed that Mr Walker’s two variations of

this challenge were mutually inconsistent.) In the first place, the Adjudicator was not

addressing a point of his “own making” (one of the variations Mr Walker suggested). He

had, in fact, addressed the pursuer’s argument at paragraphs 3.32 to 3.6 of its submission

dated 18 January 2019. Accordingly, read in the light of that submission, it was clear that the

Adjudicator had exhausted his jurisdiction. He had considered the set-off defence (see

para 321 of the Decision) and decided that the electricity charges could not be set off for the

reasons submitted by the pursuer, namely, those charges first required to go through the

contractual procedure for handling “Monthly Service Payments”. He referred to paragraph

362 of the Adjudicator’s Decision. By the time of the second day of the debate, Mr Walker

appeared to have accepted that the pursuer had made such a submission. In that case, this

first formulation of this challenge disappeared. The Adjudicator had not “developed a

[47] Mr Moynihan made a further submission that Mr Walker appeared now to advance

a new argument that the pursuer “deliberately led the adjudicator in to error”. There was no

Record for such a contention and this submission should not be entertained. This constituted

an illegitimate attempt by the defender to open up the merits of that part of the

Discussion and determination of the failure to exhaust jurisdiction argument

[48] This issue was briefly argued and may be shortly despatched.

[49] The defender’s initial presentation of this issue was predicated on what was said to

be an error in law on the part of the Adjudicator in the interpretation of the set-off clause of

the Project Agreement and which became a failure to exhaust his jurisdiction because the

Adjudicator wrongly excluded a relevant line of defence. However, by the time of the

second day of the debate, in the light of Mr Moynihan’s submissions (which identified the

passages in the pursuer’s submissions to the Adjudicator and where this was dealt with in

the Decision), Mr Walker accepted that it was “correct to say that the pursuer did make a

[50] Mr Walker no longer sought to argue that the Adjudicator had gone off on a frolic of

his own. He did not identify the particular error of law the Adjudicator was said to have

fallen into nor what was the correct interpretation of the relevant clause of the Project

Agreement. Mr Walker simply asserted that the clause 34.4 “plainly” entitled the defender

to argue for set-off of the EDF invoices and the pursuer’s submission to the adjudicator was

[51] I do not accept Mr Walker’s submission that the pursuer “deliberately led the

adjudicator into the error that he then went on to make concerning the question of whether

set-off could be prayed in aid by the defender in the adjudication”. There is nothing in the

documentation exhibited to me in the course of the two-day debate which provided any

support for such an assertion. It is contradicted by the passages Mr Moynihan identified.

On a fair reading of the Decision, the Adjudicator did consider the arguments about set-off.

He determined this point in favour of the pursuer. There was therefore no failure by the

Adjudicator to exhaust his jurisdiction. I accept Mr Moynihan’s submission that it would be

impermissible to explore this as an error of law, as this is classically a matter that is intra

vires of the Adjudicator and the defender has no pleaded case. This ground of challenge also

[52] Accordingly, the second challenge on the basis that the Adjudicator failed to exhaust

[53] It follows from the foregoing that the defender’s several grounds of challenge fail

and that effect must be given to the Decision. I shall put the case out By Order to confirm the

terms of the decree, to address any question of expenses and to enable parties to address the

Court on the impact of this decision on the orders made in relation to the defender’s

counterclaim at last week’s Procedural Hearing following the second day of the debate.

[54] I reserve meantime the question of expenses.

Scottish Court of Session Decisions