Legal: Say what you see

‘I could never put anything into a picture that wasn’t actually there in front of me. That would be a pointless lie, a mere bit of artfulness.” That of course is a quote from Lucian Freud, but it prompts empathy for the work of adjudicators – because just when the grounds on which to challenge adjudicators’ decisions have been almost eliminated by the courts, a new strand in this jurisprudence emerges. A new case has popped up that now adds to the possible ways that one could argue for a breach of natural justice having occurred during an adjudication.

The new case is Vinci Construction UK Ltd vs Beumer Group UK Ltd [2018] EWHC 1874 (TCC), a decision handed down on 24 July 2018. It is noteworthy because it will encourage those involved in multi-party serial adjudications to seek disclosure of related decisions in the hope that such an exercise will show a party is taking wholly inconsistent positions in different adjudications. Further opportunity lies in the fact that if such a request for disclosure is denied by the adjudicator, then the requesting party may also be able to run a “breach of natural justice” argument, should it be needed at enforcement proceedings.  

It is well understood that aggrieved losing parties can and should comply with the adjudicator’s decision, as long as that decision was made by an adjudicator with jurisdiction over the dispute who has conducted the adjudication fairly and in accordance with the rules of natural justice. It is also well understood that failures or breaches have to be serious or material.

“It will encourage those involved in multi-party serial adjudications to seek disclosure of related decisions in the hope that this will show a party is taking wholly inconsistent positions in different adjudications”

What the Vinci Construction case has done is to highlight that a simple failure by an adjudicator who is actually requested by one party to order disclosure of earlier or other related adjudication documentation could be a breach of natural justice. A further argument may well be that such a denial of request has prevented the requesting party from addressing fundamental points such that a breach of natural justice has occurred.  

One needs to keep in mind that the so-called “inconsistency of approach in two adjudications” needs to have a compelling connection: the disputes need to be “closely connected and the issues so similar”. This specific point was (paradoxically) raised in an earlier case between the same parties, Beumer Group UK Ltd vs Vinci Construction UK Ltd [2016] EWHC 2283, by Mr Justice Fraser.

The above arguments did not work in the 2018 Vinci Construction case, but they might just have worked had Beumer made an actual request to the adjudicator that he should order disclosure of documentation on the related adjudication.

The facts of the 2018 case are relatively simple: Beumer argued that there had been a breach of natural justice by virtue of the fact that it did not have available to it in the adjudication copies of the documents from an adjudication commenced by Balfour Beatty Engineering Services Ltd against Vinci in September 2016. Specifically, Beumer alleged that “Beumer understood that Vinci had run a case in the Balfour adjudication that was inconsistent with the case that it was running in [this adjudication]”.  

Beumer said that “… the adjudicator simply never dealt with the point made repeatedly that Vinci (and he) had in their possession a decision which there was good reason to suppose contained evidence of an inconsistent position taken by Vinci. This injustice could, and should, have been removed by ordering disclosure of the material in the Balfour Beatty adjudication or disclose that decision himself, not to do one or other was fundamentally unfair”.

Ultimately, the judge in the 2018 Vinci case decided that Beumer did not itself actually request the adjudicator to order that Vinci disclose documents relating to the earlier Balfour Beatty adjudication and that there was no proper material before the adjudicator which would have required him to order that Vinci disclose.

Such is the beauty of the common law that as it evolves opportunities arise, and one can expect cases in the future where a party focuses significant attention on the close connection of the disputes and the similarity of the issues in dispute and makes clear and robust requests that adjudication documentation on the related adjudication be disclosed. This is a significant development in the jurisprudence of adjudication, and its strategic value ought not to be underestimated.

One needs also to keep in mind that related adjudications on a single project are not uncommon where a main contractor has a number of subcontracts or trade contractors – time and money issues are naturally interrelated and critical delay on one work package is likely to have an impact on other work packages.

The “artfulness” in adjudication continues …

Hamish Lal is a partner at Akin Gump Strauss Hauer & Feld