A warning for adjudicators

A recent decision by the Technology and Construction Court (‘TCC’) in the UK poses a warning to adjudicators acting on multiple disputes within the same project.

In Beumer Group UK Ltd v Vinci Construction UK Ltd [2016] EWHC 2283 (TCC) a subcontractor, Beumer, brought concurrent adjudications against:

  • the Head Contractor, Vinci, for a declaration that three of Vinci’s contract instructions constituted Compensation Events (The ‘BVII’ adjudication), and
  • its Sub-subcontractor, Logan, for liquidated damages for delay (The ‘BLII’ adjudication).

Beumer’s claims were inconsistent, as Beumer essentially blamed Vinci for the delay in BVII but Logan for the delay in BLII. The same adjudicator, Dr Chern, was appointed for both adjudications. This was not disclosed to Vinci.

Upon BVII being decided in Beumer’s favour, Vinci challenged the decision in the TCC. It alleged that Dr Chern had breached natural justice because:

  • Dr Chern had knowledge of matters relevant to BVII which Vinci was not aware of and Vinci had been denied the right to respond to these matters.
  • Vinci should have been given the chance to rely on Beumer’s factually inconsistent position in BLII in support of its own position in BVII.

The Court agreed, deciding that Dr Chern ought to have disclosed to Vinci that he had been appointed in BLII. This would have given Vinci the opportunity to request that Beumer disclose its inconsistent submissions.

One area that was not considered by the court was confidentiality of adjudication materials. In New Zealand, section 68 of the Construction Contracts Act 2002 makes any material created or made for the purposes of an adjudication confidential. Such material, including parties’ submissions and the ultimate decision, can only be disclosed where section 68(2) applies, such as where the relevant parties consent to the disclosure.

If a Beumer Group UK Ltd v Vinci Construction UK Ltd type case occurred in New Zealand and the relevant parties did not consent to the disclosure of their submissions, an adjudicator would be put in a difficult situation. In light of this case, the safest options would be to decline the appointment in the first place or only act if the two adjudications are consolidated under section 40.

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