ADJUDICATION
Natural Justice
Cantillon Ltd v Urvasco Ltd [2008] 117 Con
LR 1 TCC
Already reported in BLR, in a piling dispute referred
to adjudication, the defendant argued unsuccessfully that the
adjudicator had breached the rules of natural justice. The
court held that if one party argued a point and the other
failed to address it that was not the adjudicator's
fault. In ascertaining what the dispute comprised, the claimant
was not limited to matters raised before it crystallised. The
court had to consider the severability, or separate
enforceability, of different parts of the decision.
Construction Law Journal 2008 Vol.24 No.5 contains the following articles:
Adjudication – the New Zealand
position
by Tómas Kennedy-Grant QC, Auckland
Construction Act Review
by Peter Sheridan and Dominic Helps, Shadbolt &
Co. comprises two papers from the Association of Independent
Adjudicators Conference, London, April 2008:
Adjudication Case Law Update
by Sean Brannigan, 4 Pump Court
on Cantillon v Urvasco
and Reflections on Alternative Dispute Resolution
– think A or D
by Sir Anthony Evans QC
See Avoncroft Construction v Charba Homes under Keating Chambers Reported Cases on contractual defence to liquidated damages based on partial possession, set-off and validity of withholding notice.
ARBITRATION AND DISPUTE RESOLUTION
NHBC Conciliation
Holloway v Chancery Mead Ltd [2008] 117 Con
LR 30 TCC
The claimants sought to refer to the NHBC Arbitration
Scheme financial disputes relating to defects in a newly built
house. The defendants argued that it was a condition precedent
for the dispute to be referred to conciliation with the NHBC
Resolution Service. The court held that NHBC Resolution was not
applicable to seller-buyer disputes of this kind, so it was not
a condition precedent to arbitration. It was held per curiam
that the reference to the NHBC Resolution Service would have
been sufficiently certain to identify it.
See Cubitt Building and Interiors v Richardson Roofing (Industrial) under Keating Chambers Reported Cases on refusal of stay of arbitration pending adjudication and incorporation of contract terms.
Arbitration International 2008 Vol. 24 No. 2 contains the following articles:
W(h)ither international commercial
arbitration?
by Charles Brower, 20 Essex Street
Arbitral jurisdiction and the dimensions of
'consent'
by Alan Scott Rau, University of Texas at Austin
The settlement privilege
by Klaus Peter Berger, University of Cologne
The status of vacated awards in France: the Cour de
Cassation decision in Putrabali
by Philippe Pinsolle, Shearman & Sterling,
Paris
Prudent anticipation? The arbitration of public
company shareholder disputes
by Perry Herzfeld, Allens Arthur Robinson,
Melbourne
International Arbitration Law Review 2008 Vol. 11 Issue 3 contains the following articles:
When is an arbitration agreement
'inoperative'?
by Max Bonnell, Mallesons Stephen Jaques, Sydney
International commercial arbitration and
Constitutional Court review: contemporary trends and national
policies
by Mohamed S. Abdel Wahab, Shalakany Law Office,
Egypt
Independence and impartiality of arbitrators
by Shivani Singhal, National Law School of India,
Bangalore
Extension of time for challenge refused
Colliers International Property Consultants v
Colliers Jordan Lee Jefaar Sdn Bhd [2008] All ER (D)
50
In a dispute between members of the international
property consultancy, Colliers, and a former member of the
group, the defendant, the latter applied for an extension of
time to challenge the award under s.68 of the Arbitration Act
for serious irregularity and also to set aside the order that
the award be entered as a judgment. The grounds were procedural
flaws but the court held that they were properly corrected by
giving the claimants seven days to remedy the (minor)
deficiencies. The defendant's application was
dismissed.
No costs for invalid arbitration
Crest Nicholson (Eastern) Ltd v Western
[2008] All ER (D) 249 TCC
In a dispute over the NHBC Buildmark scheme, the
court held that an arbitrator who had heard submissions from
both parties had no jurisdiction, because there was no
arbitration clause in the Buildmark policy. This gave rise to
the question as to whether the court could award costs in
respect of the invalid arbitration. It was held that there was
no clear statutory power to do so, and so the court could not
make such an award.
See Cubitt Building & Interiors v Richardson Roofing (Industrial) under Keating Chambers Reported Cases on refusal of stay of arbitration pending adjudication.
See L Brown & Sons v Crosby Homes (North West) under Keating Chambers Reported Cases on an application to extend time limit for challenge to award and serious irregularity based on fraud/breach of public policy.
See Taylor Woodrow v RMD Kwikform under Keating Chambers Reported Cases on whether arbitration had been validly commenced by a letter from the claimant.
Construction Law Journal 2008 Vol.24 No.5 contains the following articles:
Arbitration and ADR in the German construction
industry
by Dr. Susanne Kratzch, Thümmel, Shütze and
Partners, Stuttgart
International commercial arbitrations in the United
Kingdom: the Scottish dimension
by Richard Anderson, Arbitration Chambers
Dispute Resolution Magazine Vol.14 No.3 and 4 Spring/Summer 2008 contains the following articles:
The future of ADR
by David Hoffman, Boston Law Collaborative
Dispute resolution and the quest for justice
by Jean Sternlight, University of Nevada
Looking forward in mediation
by Linda Singer and Michael Lewis, Washington DC
Business arbitration can and should be improved in
the United States
by Kathy Bryan and Helena Tavares, CPR Institute, New
York
Reflections on institutionalizing mediation
by Geetha Ravindra
ADR and Family Law
by Gregg Herman, Loeb & Herman, Milwaukee
The ADR Case Evaluator's role in
contemplated and pending litigation
by the Hon Allen van Gestel, Boston
Doing the best mediation you can
by John Lande, University of Missouri
Improving mediation training and regulation through
collaborative assessment
by Ansley Barton
Dispute Resolution Magazine Vol.14 No.2 Winter 2008 contains the following articles:
Consent in mediation
by Jacqueline Nolan-Haley, Fordham University
Achieving meaningful threshold consent to mediator
style(s)
by Frank Sander, Harvard Law School
Midstream mediator evaluations and informed
consent
by John Cooley, Northwestern University and Lela
Love, Yeshiva University
Informed consent in public sector dispute
resolution
by Patrick Field, University of Montana
Consent in international mediation
by Melanie Greenberg
The (new) ethics of collaborative law
by Scott Peppet, University of Colorado
CONTRACT AND PROCUREMENT LAW
Letter of intent and formation of contract
RTS Flexible Systems Ltd v Molkerei Alois Muller
GmbH & Co [2008] BLM Vol. 25 No. 6 TCC
The defendant dairy manufacturer wished to retain the
claimant to supply services for automation of processes and
equipment. After providing some quotations, the claimant was
awarded the contract and a letter of intent was issued by the
defendant, confirming its wish to proceed with the project
'as set out in the offer' subject to
finalisation of price and completion date and stating that it
would be using an amended version of the MF/1 form of contract,
to be executed within 4 weeks. The claimant started work and
negotiations proceeded, during which the letter of intent was
extended for some three months. A final draft contract was
produced but never signed and disputes arose, leading the
claimant to commence proceedings. The court held that the
letter of intent had constituted a counter-offer. The final
draft had never become binding, but after the eventual lapse of
the letter of intent, the parties had reached full agreement on
the obligations relating to the work.
Take or pay clause
M&J Polymers Ltd v Imergys Minerals Ltd
[2008] 117 Con LR 88 Commercial Court
A take-or-pay clause required the buyers to take a
minimum quantity of products or pay for a minimum if they did
not order enough. The defendant argued that this was a penalty
clause. The court found that on the facts the clause was not a
penalty, but it was not correct to say that a take-or-pay
clause could not be a penalty. As a matter of principle, the
rule against penalties could apply to a take-or-pay clause even
when expressed as a claim in debt. The Con LR editors note that
this appears to be the first reported case on the point.
Construction Law Vol. 19 Issue 6 July 2008 contains the following articles:
New text not always an improvement
by Michael Phipps, Thurston Consultants (on JCT 2005
With Quantities)
Peace in the brave NEC world?
by Sam Boyling, Pinsent Masons
Project insurance – the perfect
answer?
by John D. Wright, JD Risk Associates
The Office of Fair Trading objects
by John Pheasant and Marceline Tournier, Hogan &
Hartson
International Construction Law Review Vol. 25 Part 3 July 2008 contains the following articles:
Contract issues in the use of Construction Building
Information Modelling
by Kimberley Hurtado and Patrick O'Connor,
Faegre & Benson, Minneapolis
The use and abuse of first demand guarantees in
international construction projects
by Philip Dunham, Decherts, Paris
Tendering procedure at common law
by RH Christie, University of Cape Town
The right law for construction? Choice of law and
European reform
by Philip Britton, King's College, London
Use of sub-criteria and marking unlawful
Lettings International Ltd v London Borough of
Newham [2008] EWHC 1583 QBD
Lettings, the unsuccessful tenderers for two
framework agreements covering procurement, maintenance and
management of dwellings for Newham, succeeded in their
challenge of the tendering and award process. After first
obtaining an injunction (upheld at [2007] EWCA Civ 1522) to
stop the award, at the trial they established breach of the
Public Contracts Regulations 2006 by Newham. Newham had failed
adequately to disclose its award criteria and weightings in
advance and specifically had used sub-criteria which were not
disclosed, and which were not mere scoring machinery, as Newham
tried to contend. Newham had also failed to be transparent in
its scoring, offering only 3 out of 5 for fully meeting a
criterion and reserving the remaining two marks for those who
exceeded it. Some, although not all, of the 'manifest
errors' in marking were also held to be established.
The recent decision of the ECJ in Lianakis v Dimas
Alexandroupolis was applied.
CONSTRUCTION AND ENGINEERING CONTRACT DISPUTES LAW
Construction Law Vol. 19 Issue 6 July 2008 contains the following articles:
Trouble with the LADs
by Shona Frame, MacRoberts
(on Reinwood v L Brown & Sons - John
Marrin QC and Stephen Furst QC)
Litigation insurance and funding
by James Delaney, The Judge
Have you been Wronged?
by Paul Newman, 3 Paper Buildings
(on litigation costs and fees)
For your eyes only?
by John Sheils, Shadbolt & Co
(on privilege and disclosure)
Unjust enrichment claim fails
JS Bloor Ltd v Pavillion Developments Ltd
[2008] BLM Vol. 25 No. 6 TCC
The claimant contractor failed in its action for
recompense from the defendant developer in respect of an access
road which the claimant had constructed under a mistake, thus
discharging the developer's obligations. The claimant
failed to satisfy the judge that the defendant had received a
benefit or that there had been any enrichment which was
unjust.
Bribery and fraudulent misrepresentation
Ross River Ltd v Cambridge City Football
Club [2008] 117 Con LR 129 Ch. Div
The football club succeeded in obtaining an order to
rescind transactions for the transfer of its ground to a
developer on the grounds of fraudulent misrepresentations made
by representatives of the developer and bribes paid in the form
of payment made to the club's Chief Executive.
Contract Disputes
See Seele Austria v Tokio Marine Europe Insurance under Keating Chambers Reported Cases on the scope of indemnity under contractors all risk insurance.
Implied terms and best endeavours
Onesteel Manufacturing Pty Ltd v United KG Pty
Ltd [2008] Con LJ Vol.24 No.5 431 Supreme Court of South
Australia
Employer Onesteel engaged contractor United to reline
and upgrade a blast furnace under a Target Estimate Contract
designed to minimise shut-down time. There was over-run on time
and a large additional cost claim by the contractor. The court
was asked to consider what terms should be implied into the
contract regarding recoverability of reimbursable costs and
time-bars as a condition precedent to claims. The court held
that the contractor's entitlement to reimbursement was
subject to an implied term that the costs were reasonably and
properly incurred. If the contractor could show this, that
would be sufficient to show 'best endeavours.'
The contractors' claims could be barred by failure to
comply with a time-limit for their submission.
International Construction Law Review Vol.25 Part 3 July 2008 contains the following article:
The quantification of termination claims in
construction
by Franco Mastrandrea.
GENERAL AND PROFESSIONAL NEGLIGENCE
Nuisance and Rights to Light
Forsyth-Grant v Allen [2008] BLM Vol. 25
No. 6 CA
The Court of Appeal dismissed an appeal by a hotel
owner against an award of damages for nuisance and interference
with rights to light against the developer of an adjoining
site. The appellant would be restricted to damages for the
limited infringement of the rights to light and could not claim
damages for the benefit obtained by the developer. Such a basis
was not appropriate for a claim in nuisance either. The court
noted the appellant's unreasonable refusal to
co-operate in assessing the extent of the infringement.
SAAMCO revisited by the Lords
Transfield Shipping Inc v Mercator Shipping
Inc [2008] UKHL 48 HL
Following delays, a ship which was subject to a
charter was not available to the new charterers. The owners of
the ship claimed damages from the charterers for the loss of
the difference between original rate of hire and reduced rate
agreed for late delivery. The charterers denied that damages
should relate to dealings with the new charterers but should be
the difference between market rate and charter rate. During
2004, market rates had more than doubled. The majority
arbitrators found for the owners, on an application of the
first limb of Hadley v Baxendale. The
Commercial Court and Court of Appeal upheld this. Lord Hoffmann
and the House of Lords, however, allowed the appeal by the
charterers:
"If, therefore one considers what these parties, contracting against the background of market expectations found by the arbitrators, would reasonably have considered the extent of the liability they were undertaking, I think it is clear that they would have considered losses arising from the loss of the following fixture a type or kind or loss for which the charterer was not assuming responsibility".
As well as Hadley v Baxendale, Lord Hoffmann and Baroness Hale considered South Australia Asset Management v York Montague (Vincent Moran) on the role of foreseeability of loss exacerbated by market movement in measure of damages.
PRACTICE AND PROCEDURE
The Commercial Litigation Journal No. 18 March/April 2008 contains the following articles:
Legal advice privilege: secrets and advice
by Michelle Radom, Clyde & Co
Injunctions and disclosure: when is it worth
revealing unhelpful information?
by Andrew Howell and Dan Smith, Barlow Lyde &
Gilbert
Online defamation: tackling e-libel
by Nicola Bridge and Honor Levy, SJ Berwin
Community design rights: Irish court gives fashion
tips
by Nathan Smith, Dechert
BITs: investment protection in central and eastern
Europe
by Rotislav Pekar and Roman Prekop, Squire
Sanders
Mediation: will the lame duck fly?
by Richard Perkoff, Littleton Chambers
Middle East: the legal area in the Arab states
by Dr. Mark Hoyle, Tanfield Chambers
The Commercial Litigation Journal No. 19 May/June 2008 contains the following articles:
Shareholders' remedies: horses for
courses
by Angelina Suvorova, University of Edinburgh
Woolf reforms: quantum of injustice
by Geraint Lewis QC, Tanfield Chambers
Mediation: hard times demand creative
solutions
by Stephen Barker, Reed Smith
Legal Services Act 2007: teach your team to fish
while you have the time
by Jane Ching, Nottingham Law School
International arbitration: if at first you
don't succeed ...
by James Hargrove, Hogan & Hartson
Sub-prime litigation: big in America
by David Greene, London Solicitors Litigation
Association
EU Mediation Directive: back into the draft
by Richard Perkoff, Littleton Chambers
Costs: seeking security
by Chris Warren-Smith and Ian Pegram, Fulbright &
Jaworski
Security for costs
Lobster Group Ltd v Heidelberg Graphic Equipment
Ltd [2008] 117 Con LR 64 TCC
Already reported in BLR, Coulson J concluded that
legal costs of participating in a mediation are in principle
recoverable costs, if the mediation was convened after issue of
proceedings, although not if convened before. The dispute in
this aspect of the (non-construction) case concerned the
quantification of the security for costs to be given by the
claimant.
Pre-action protocol
Orange Personal Communications Services Ltd v
Hoare Lea [2008] 117 Con LR 76 TCC
The court considered authorities on its case
management powers. In deciding whether proceedings should be
stayed for the TCC Pre-Action Protocol process, especially
where there are Part 20 proceedings, the following
considerations are relevant: (i) when it was known that the
party was going to be joined (ii) what information that party
had been given and when (iii) how large a part that party would
play (iv) what stay could be accommodated without jeopardising
the whole timetable (v) any requirement of justice regarding
delay of whole timetable and trial date (vi) whether costs
order could compensate (vii) alternatives to a stay (viii)
utility of stay/protocol process. The Con LR Editors note that
the judge was "clearly disinclined to rule
conclusively that the non-compliance actually increased the
defendant's costs of the proceedings
overall".
Costs on abandonment of item and mediation
Nigel Witham Ltd v Smith [2008] 117 Con
LR TCC
Already reported in TCLR and CILL, the defendant clients
were held to be the successful party, in that the claimant
designers had had to pay them a small amount as the net result
of an action for fees with a counterclaim, subject to a 15%
reduction in respect of a counterclaim item which had been
abandoned. The judge rejected the claimants' allegation
that the defendants had refused to mediate, although he doubted
whether an early mediation would have led to a settlement in
the case.
Summary judgment
Landfast (Anglia) Ltd v Cameron Taylor One
Ltd [2008] 117 Con LR 53 TCC
Landfast Ltd, a development company, formed Landfast
(Anglia) Ltd as a vehicle for a specific development. This
action was brought by them against the defendants'
consulting engineers, alleging that they had failed to advise
on the amount of site preparation needed, so that too high a
price was paid. The defendants sought summary judgment on the
ground that rights had been assigned between the companies. The
court refused to strike out the claim, as it was arguable that
Landfast (Anglia) could claim full value. Reference was made to
Offer–Hoar v Larkstore
(Christopher Thomas QC and Gaynor
Chambers).
Costs for failure to comply with Protocol
TJ Brent Ltd v Black & Veatch Consulting
Ltd [2008] All ER (D) 396 TCC
A claim had been made by the employers against the
claimant contractors and the contractors had commenced
proceedings against the defendant engineers, who denied all
liability and refused to attend meetings to discuss the matter.
The employer's claim was settled by the claimant, who
now sought a contribution from the defendant under the Civil
Liability Contribution Act. The defendant made an application
for costs against the claimant for non-compliance with the
Pre-Action Protocol. The application was refused; any
non-compliance was technical and the application was intended
to secure a tactical advantage.
KEATING CHAMBERS REPORTED CASES
Diamond Build Ltd v Clapham Park Homes Ltd
[2008] All ER (D) 353 TCC
A letter of intent for a refurbishment project was
held to have given rise to a simple contract with all the
necessary elements, to cover the period until a formal contract
could be entered into. The claimant successfully contended that
the contract was based upon the standard form referred to in
the specification.
Marc Rowlands
Taylor Woodrow Construction v RMD Kwikform
Ltd [2008] BLR 383 TCC
Following collapse of scaffolding provided by the
defendant, the claimant's solicitors sent a letter
noting the contract contained provision for arbitration and
asking whether the defendant would rely on that or would agree
to participate in litigation. The claimant then obtained
unilateral appointment of an arbitrator by the President of the
Chartered Institute of Arbitrators. The court accepted the
defendant's contention that there had been no valid
reference and so no commencement of the arbitration. The
arbitrator was thus not validly appointed. The
claimant's letter had not been objectively clear and
was thus not sufficient to commence proceedings.
David Thomas QC
Seele Austria v Tokio Marine Europe
Insurance [2008] BLR 337 CA
The Court of Appeal, by a majority, allowed the
appeal by the claimant, the insured party under a Contractors
All Risk policy, against the Commercial Court's
decision in favour of the insurer. The first instance court had
held the contractors not entitled to an indemnity in respect of
loss and expense sustained in doing remedial work to defective
windows which they had installed, because it was intentional
damage. The CA held that, although the cost of making good
defects was not in itself recoverable under the policy,
remedial work was necessary to preserve the physical integrity
of the building, which was covered by the indemnity.
Adrian Williamson QC
Cubitt Building & Interiors Ltd v Richardson
Roofing (Industrial) Ltd [2008] BLR 354 TCC
Already reported in CILL, in refusing the
claimant's application for a stay of arbitration
pending adjudication, the court emphasised that whether there
should be a stay during the arbitration was entirely a matter
for the arbitrator's discretion. There is no
obligation, either under the DOM/I conditions incorporated into
the sub-contract, or under the HGCR Act, to refer a dispute to
adjudication, but a party can do so at any time. If involved in
arbitration, application would be made for relief which could
be built into the arbitration timetable if the arbitrator
thinks fit because applying the overriding objective, it
involves a prospect of resolution. However, an order for a stay
should not be granted if it would prevent expeditious
resolution by arbitration (or litigation) already
commenced.
Gaynor Chambers
L Brown & Sons Ltd v Crosby Homes (North
West) Ltd [2008] BLR 366 TCC
This is a sequel to the TCC adjudication case in 2005
between the parties (Simon Hargreaves and Alexander
Nissen QC). This litigation concerned an application
to challenge an award for serious irregularity out of time (by
66 days) and whether the delay could be excused by reference to
the failure of the other side's solicitor to respond to
a letter concerning alleged omissions in disclosure. The court
made a statement on the principles for considering application
to extend time limits under the Arbitration Act: a weak case
would add weight to the party resisting the application, a
strong case would militate in favour of an extension. A case
which was neither weak nor strong would be insufficient to add
weight to the application. On these facts, the application
should have been brought within the time limit. Deliberate
withholding of documents ordered to be produced might be
reprehensible and contrary to public policy, but not where
there was no such order.
Marc Rowlands
Nerys Jefford QC
Avoncroft Construction Ltd v Charba Homes (CN)
Ltd [2008] TCLR 7 TCC
Although that was chiefly on the issue of entitlement
to a stay of enforcement of an adjudicator's decision
due to claimant's financial position. The TCLR report
also deals with the contractor's contractual defence to
a claim for liquidated damages and employer's set-off
rights and the invalidity of a withholding notice served out of
time. The contractor's defence was based on a partial
possession argument.
James Thompson
Note that the defendant is referred to as 'Sharba' but correctly reported as Charba elsewhere.
The articles and papers published by Keating Chambers are for the purpose of raising general awareness of issues and stimulating discussion. The contents must not be relied upon or applied in any given situation. There is no substitute for taking appropriate professional advice.
For further information on how our members can assist you, please contact the Senior Clerks, John Munton and Nick Child, in the first instance, on +44 (0) 20 7544 2600. They and their teams of Clerks will be pleased to advise you on the member of Keating Chambers appropriate to your requirements.
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