Let’s look at adjudication…afresh

One of the most interesting construction cases (on its facts) at the end of last year was Eurocom v Siemens. It related to adjudication proceedings brought by Eurocom against Siemens. The issue centred around Eurocom’s application to the RICS, the nominating body named in the contract, for the appointment of an adjudicator.

The RICS application form included the question: “Are there any Adjudicators who would have a conflict of interest in this case?” In this case Eurocom’s advisors completed this section and indicated a surprisingly large number of people who were apparently conflicted. These included:

“Mr Leslie Dight and Mr. Nigel Dight of Dight and partners; Mr. Siamak Soudagar of Soudagar associates; Rob Tate regarding his fees - giving rise to apparent bias; Peter Barns for dispute of a minimum fees charge and apparent bias; Additionally Keith Rawson, Mark Pontin, J R Smalley, Jamie Williams, Colin Little, Christopher Ennis and Richard Silver, Mathew Molloy who has acted previously or anyone connected with Fenwick Elliott solicitors who have advised the Referring Party.”

Siemens asked for copy of the application form but Eurocom would not provide one and the RICS took a long time to provide it.

In the meantime Mr Tony Bingham was appointed as adjudicator. He is not mentioned in the list of those conflicted provided by Eurocom to the RICS.

Mr Bingham found in favour of Eurocom. By this time Siemens had a copy of the RICS form and were questioning Eurocom about the number of people who apparently had a conflict. Eurocom commenced proceedings in the Technology and Construction Court to enforce the adjudicator’s award.

In witness evidence Eurocom’s advisor admitted that none of the people whom Eurocom had listed as having a conflict, did in fact have a conflict. Eurocom just did not want them deciding this dispute.
The court took a very dim view of this. They held that there had been fraudulent misrepresentation, that Tony Bingham had had no jurisdiction to decide the adjudication and that his decision was a nullity.

Since the decision the RICS has changed its form so that the guidance notes read:

“If in your view there are any adjudicators who would have a conflict of interest in this case, you should list them in this box. Please also provide for each such person, brief but clear reasons for this statement. Your attention is drawn to the decision in Eurocom Limited v Siemens PLC [2014] EWHC 3710 (TCC) to the effect that misrepresentation in this statement could invalidate the appointments process in its entirety, rendering any decision/award made unenforceable.”
No other nominating body has changed its form since the Eurocom decision, probably because none specifically ask about conflicts. Set out below is a reminder of what some of the key nominating body forms do say:

• TeCSA “Save in the case of a genuine legal conflict, in making its nomination TeCSA will not take into account any preferences expressed by either party as to the names of adjudicators to be excluded from the nomination process”.
• ICE. Note in their guidance that, if either party has any objections to the appointment of the Adjudicator, they must put forward valid reasons and this may be overruled by ICE.
• ACE and RIBA make no reference to conflicts or to preferences or objections.

Regardless of what the forms say, it is good practice if you are bringing an adjudication to be completely open with the other side regarding any submissions made to the nominating body.
If you are on the receiving end of an adjudication, always ask (and keep on asking until you get them) for a copy of the form and any submissions made to the nominating body.

There are a couple of other interesting points that arise from the Eurocom case.

One of these is the suggestion that an adjudicator who is appointed in relation to one adjudication in respect of a specific contract should be appointed in relation to all subsequent adjudication in relation to that contract. Some commentators argue that this is already the position under NEC 3 which requires under Option W2.2 (1) that the parties appoint the adjudicator under the NEC Adjudicator’s Contract.

It is debatable how practical it is to appoint the same adjudicator. There are obvious advantages in that it should save time and money as the adjudicator is already familiar with the facts. However what happens if the adjudicator is too busy to commit to a subsequent adjudication for a few weeks? Surely the parties do not have to wait – that would be in breach of the entitlement to adjudicate at any time. Perhaps more importantly is whether the first appointed adjudicator has the specialism to deal with subsequent adjudications. An architect adjudicator may well be suitable for an adjudication on extensions of time, but might not be as well suited as a QS to an adjudication on loss and expense flowing from the extension of time award.