Laker vs Jacobs: A complex case

I was doing my usual trawl through the recent published TCC judgments and I found upon Laker Vent Engineering Ltd vs Jacobs E&C Ltd which was before the Hon Mr Justice Ramsey. The case was complex and revolved around two sets of proceedings, the first being Laker (the subcontractor) seeking summary judgment of a number of adjudication decisions (there were three) against Jacobs (the main contractor) and the second set of proceedings being in respect of two declarations regarding the interrelationship of extensions of time and the taking-over under the subcontract.

Dealing with the enforcement proceedings Jacobs raised three defences (1) there were no express adjudication provisions within the subcontract and hence, as the subcontract works were not considered to be construction operations under the act (as amended), it did not apply; (2) that the adjudicator made inconsistent decisions between the three awards (which were issued on the same day; and (3) that the adjudicator was without jurisdiction as he was appointed under the scheme (England and Wales) when in fact the works were in Scotland. Laker subsequently made a threshold defence upon the basis that Jacobs applied (successfully) for a correction of the adjudicator’s decision under the slip rule and hence were precluded from raising a challenge on the basis that Jacobs affirmed the decision by election.

The subcontract expressly referred to English Law and hence the English scheme applied

Mr Justice Ramsey dealt with the affirmation of the decision first and found that (“with some hesitation”) a party can rely upon a general reservation of jurisdiction and apply under the slip rule (or make payment), and shall not be waiving its rights to contend that the adjudicator did not have jurisdiction. It is only where it is no longer possible to reserve rights that a party must elect between approbation and reprobation of the decision.

Dealing with the three defences it was found that (1) it was ultimately a construction contract albeit there was some debate regarding what constituted the site and hence what activities were involved upon the site, (2) the courts do not review the findings of fact and law (at summary judgment) as made by the adjudicator and hence the review was one to ensure the decision was sufficiently certain [which they were], and (3) the subcontract expressly referred to English Law and hence the English scheme applied.

It was therefore found that Jacobs had no real prospect of success and Laker was entitled to summary judgment of the sums awarded by the adjudicator.

I consider the case is a good reminder of the court’s unwillingness to set aside adjudicator’s decisions where mistakes within the decision may be found to exist, but perhaps more interestingly was the judgment that the payment of the decision, or an application for a correction under the slip rule (providing a suitable reservation is made) does not automatically affirm the decision.

Ryan Greening is a director at Bennington Green