Construction Law Update: Deluxe Art & Theme Limited v Beck Interiors Limited [2016] EWHC 238 (TCC)

The recent case of Deluxe Art & Theme Limited v Beck Interiors Limited [2016] EWHC 238 (TCC) has confirmed that an adjudicator does not have jurisdiction to deal with concurrent but separate disputes without the consent of the parties.

The decision is an important one, as it is the first time that the Court has considered a wider interpretation of Paragraph 8 (1) of Part 1 of the Scheme for Construction Contracts (England and Wales) Regulations 1998 (Amendment) (England) Regulations 2011 (‘the Scheme’).

In the case Deluxe referred three separate disputes to adjudication as per the Scheme, the third adjudication being commenced prior to a decision having been reached in the second adjudication. Beck wrote to the adjudicator objecting to the same. The matter came before Coulson J for summary judgment, as Beck did not comply with the second and third decisions. Beck resisted the Application, arguing that Para 8 (1) prohibited an adjudicator determining more than one dispute without the consent of the parties.

Paragraph 8 (1) reads as follows:

‘The adjudicator may, with the consent of all the parties to those disputes, adjudicate at the same time on more than one dispute under the same contract.’

In order to overcome Paragraph 8 (1) Deluxe contended that the second and third disputes were, in actuality, a single dispute. This was despite bringing the matters as separate disputes under separate notices. This argument was unsuccessful, and the Court finding, amongst other matters, that Deluxe clearly considered the disputes were separate, as there would have been no need to commence the third adjudication if it was the same as the second.

Further, Deluxe sought to argue the following:

  1. Paragraph 8(1) is only intended to apply where an adjudicator is dealing with multiple disputes arising out of the same notice of adjudication; and
  2. Paragraph 8(1) would be contrary to section 108(2)(a) if it applies in respect of multiple adjudications because it would restrict the right to adjudicate at any time.

The Court again rejected these arguments, finding as a matter of construction, Paragraph 8 (1) did not create any distinction between single and multiple disputes.

In respect of the second point, the Court held that there was no fettering of the right to adjudicate at any time, as all that the parties have agreed to is that if one party wants to adjudicate more than one dispute at the same time before a particular adjudicator, then that party needs the consent of the other party.

Thus, given the absence of consent, the Court refused to enforce the third adjudication decision.

It is now clear that separate disputes under the same contract cannot now be dealt with by the same adjudicator at the same time unless consent is gained where the Scheme applies. A simple solution is to wait for the decision in the earlier dispute before bringing the second where consent is withheld. Further, you may wish to consider alternative forums for the resolution of the dispute, for example, Part 8 proceedings where there is no complex dispute of facts, or perhaps expert determination which may be dealt with relatively quickly.

Disclaimer

The information and any commentary on the law contained on this web site is provided for information purposes only. Every reasonable effort is made to make the information and commentary accurate and up to date, but no responsibility for its accuracy and correctness, or for any consequences of relying on it, is assumed by the author. The information and commentary does not, and is not intended to, amount to legal advice to any person on a specific case or matter. You are strongly advised to obtain specific, personal advice from a lawyer about your case or matter and not to rely on the information or comments on this site.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s