When drafting the dispute resolution procedures of a contract,
the parties usually either name a specific adjudicator or state
that the adjudicator should be nominated by one of the so-called
Adjudicator Nominating Bodies (such as RICS or TeCSA). A recent
case in the TCC has highlighted a lacuna in the law where parties
can apply to ANBs for successive nominations until an adjudicator
is appointed who they like.
In the case, the referring party (GTI) applied to the ICE for
nomination of an adjudicator. Once nominated, GTI complained that
the adjudicator was likely to be biased given his previous
involvement acting on the other side of an acrimonious dispute. GTI
then refused to participate any further in the adjudication and
failed to serve their Referral Notice. A subsequent nomination to
the ICE was then made. The respondent commenced proceedings seeking
an injunction to restrain GTI from "continuing or making
further applications to adjudicate a particular
dispute".
While ruling that the law permits "a referring party, time
and again, if it did not 'like' the adjudicator nominated,
to withhold service of the referral documentation so that the
adjudication lapses, thus enabling it to seek a nomination which it
does 'like'", Mr Justice Akenhead observed that
"clearly that would involve what would be perceived by
many as an abuse of the contractual and statutory
process."
The comments from Mr Justice Akenhead make it clear that this
situation is unlikely to be allowed to persist for long. However,
in the meantime, the safest course to avoid "adjudicator
shopping" is to agree a named adjudicator, either at the
outset when drafting the contract or when a dispute arises. If the
latter, care should be taken when making unilateral contact with
adjudicators in order to avoid complaints of bias (which, if
successful, could render a decision unenforceable): see
further here.
Guidance from the ANBs themselves that they would not be prepared
to make successive nominations would also be welcomed.
Further reading: Lanes Group Plc v Galliford Try Infrastructure Ltd
[2011] EWHC 1035 (TCC)
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 23/05/2011.