In a recent decision, the Technology and Construction Court ruled that an adjudicator’s failure to disclose his involvement in a separate, simultaneous adjudication, involving the same project and one of the parties, amounted to a material breach of the rules of natural justice.
The rules of natural justice give every party the right to a fair hearing and the right to be heard by an impartial tribunal.
A tale of caution
Vinci Construction UK Limited (Vinci) was appointed by Gatwick Airport Limited as the main contractor to carry out works at the airport’s south terminal. Vinci in turn appointed Beumer Group UK Limited (Beumer) as its sub-contractor for works in respect of the baggage handling systems. Beumer also had a sub-sub-contractor, Daifuku Logan Ltd (Logan) for works to the Tilt Tray Sorter for the baggage system.
Both the main and sub-contracts were based on the NEC3 Engineering and Construction Contract, Option A. Disputes were to be resolved under Option W2 and Dr Cyril Chern was nominated as one of three potential adjudicators in both the main contract and the sub-contract.
Vinci issued three instructions to Beumer and a dispute arose between Beumer and Vinci on whether they were Compensation Events under the NEC3 Sub-Contract they had entered into. Beumer referred the dispute to Dr Chern, who decided that the three instructions were Compensation Events and made declarations to that effect.
On the same day that Beumer commenced an adjudication against Vinci, Beumer also commenced a second adjudication against Logan – before Dr Chern. Both adjudications contained similar issues, including Logan’s failure to complete works by particular dates and Beumer’s claim (against Logan) for liquidated damages for delay.
Vinci did not know there was a simultaneous adjudication between Beumer and Logan, or that it was also before Dr Chern. Following the adjudicator’s decision, Vinci failed to reimburse the adjudicator’s fees, so Beumer commenced enforcement proceedings at court. Vinci challenged the enforcement, arguing that there was a breach of the rules of natural justice.
Vinci contended that by reason of his involvement in the simultaneous adjudication between Beumer and Logan, Dr Chern had acquired background knowledge on the subject matter of the adjudication between Vinci and Beumer. As Vinci did not know about this adjudication, it could not consider the additional information and make submissions on it.
Vinci also argued that Beumer had put forward factually inconsistent cases in the simultaneous adjudications. In its adjudication with Vinci, Beumer argued that an important date for completion, the ‘Airport Operational Readiness’ (AOR) date was achieved by 16 December 2015, but in its adjudication with Logan, argued that the AOR date was not achieved until at least 12 April 2016.
The judge ruled that the adjudicator had breached the rules of natural justice and refused to enforce the adjudicator’s decision. The judge found that the breach was material and took a dim view of Beumer’s advancement of two different factual cases.
The Court held that Vinci should have been informed about the adjudication between Beumer and Logan and should have been provided with the material from that adjudication, as the disputes involved the same issues.
The Court also held that the adjudicator should have disclosed his involvement in the separate adjudication to Vinci at the earliest opportunity and had he done so, Vinci would have been able to make submissions on the material from the simultaneous adjudication.
The advantages of using Project Adjudicators
The use of project adjudicators can be advantageous to all parties – having the same adjudicator or a narrow panel of adjudicators appointed under the contracts can create a more streamlined dispute resolution process.
The decision maker can, in theory, deal with multiple disputes at once, benefitting from increased knowledge of the project in the round. The parties to the disputes can also rely on evidence put forward in separate, but relevant adjudication proceedings.
The theoretical benefits of project adjudicators can only become a practical reality if the adjudicator follows the rules of natural justice and safely avoids accusations of real or apparent bias.
Whilst the Court emphasised that the adjudicator had considered the parties’ submissions with evident care and produced a detailed and thorough decision, his decision could ultimately not be enforced against Vinci, by reason of his failure to disclose his involvement in the simultaneous adjudication between Beumer and Logan.
The Court’s decision serves as an important reminder of an adjudicator’s need to disclose involvement in proceedings involving the same parties. If parties to adjudication become aware that multiple adjudications are taking place on the same construction project and dealing with similar issues seeking to obtain the materials relied upon in, simultaneous adjudications may prove invaluable in determining the merits of their own claims.
 Beumer Group UK Ltd v Vinci Construction UK Ltd  EWHC 2283 (TCC)