John Sisk & Son Ltd v Duro Felguera UK Ltd [2016] EWHC 81 (TCC)
Hardwick Construction Law Team www.hardwick.co.uk
This was an application for enforcement of an adjudicator’s decision by John Sisk & Son Ltd (“Sisk”) that was resisted by Duro Felguera UK Ltd (“Duro”) on the grounds that there had been a breach of natural justice or wrongful delegation of the adjudicator’s decision-making function. The dispute arose out of a contract to carry out civils works at a Combined Cycle Power Plant worth some £36 million, of which the adjudicator had awarded Sisk £10 million.
Duro identified three matters in support of their position:
1. There was a real danger that the adjudicator had approached issues with a closed mind;
2. the adjudicator delegated certain parts of his decision-making role to a third party without notifying the parties of this or seeking their consent to that course; and
3. he purported to rectify or to amend the contract in circumstances where neither party had submitted that it should be rectified and without giving the parties any notice of his intention to take that approach.
(1) The Pre-Determination Point
The question for the court to determine was whether the fair-minded and informed observer, having considered all the facts, would conclude that there was a real possibility of predetermination. Edwards-Stuart J relied on the explanation of predetermination given by Beatson J in R on the application of Persimmon Homes Ltd v Vale of Glamorgan Council[1] which provided:
“Predetermination is the surrender by a decision-maker of its judgment by having a closed mind and failing to apply it to the task. In a case of apparent bias, the decision-maker may have in fact applied its mind quite properly to the matter but a reasonable observer would consider that there was a real danger of bias on its part. Bias is concerned with appearances whereas predetermination is concerned with what has in fact happened.”
Predetermination had traditionally been argued in cases where the procedure used to appoint an adjudicator was defective, the adjudicator’s decision was subsequently quashed and so a second referral was made to appoint the same adjudicator to determine the same dispute again. In such cases, there was a real danger that the adjudicator would go into the second adjudication with a closed mind and so predetermination of the issues was likely to be found.
The facts of this case were very different. Duro’s argument was made on the basis of an email sent by the adjudicator in which he communicated his intention to continue with the referral rather than resigning at that exact point in time. The adjudicator’s email was sent after Duro had served a response to Sisk’s referral notice and Sisk had served its reply to Duro’s response, but before Duro had yet had the chance to respond to Sisk’s reply. As Sisk’s reply raised new matters about the adjudicator’s jurisdiction and Duro had not yet had the chance to address the adjudicator on them before the adjudicator’s email, Duro