Adjudicators: No, you can’t just appoint anyone you want

A recent High Court decision provides a helpful reminder that the Construction Contracts Act must be followed when appointing an adjudicator. In New Zealand Fire Sprinkler Protection Limited v AFS Total Fire Protection Limited [2016] NZHC 690, the defendants (AFS) had unilaterally appointed an adjudicator following apparent settlement of a dispute involving payment for services.

The High Court overturned the adjudicator’s decision on a number of grounds, including:

  • there was no dispute requiring adjudication (as the parties had settled the dispute prior to AFS appointing an adjudicator)
  • AFS had not complied with the Act in appointing the adjudicator
  • the adjudicator had not disclosed a conflict of interest.

It therefore pays to remember that an adjudicator may only be selected in the following ways:

  • by agreement between the parties
  • by a nominating body chosen by agreement between the parties
  • by an authorised nominating authority (such as Adjudicators Association of New Zealand, RICS, AMINZ or the Building Disputes Tribunal) chosen by the claimant.

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