So often, cases handed down from the Technology and Construction Court demonstrate that a great deal of time, money and worry could have been saved if only the parties had taken a little time at the start of a project to properly read the contract, line by line, and make sure it actually said what they wanted it to say.  The recent case of Ecovision Systems Ltd v Vinci Construction UK Ltd (Rev 1) [2015] EWHC 587 (TCC) is such a case.

What happened?

Here, the defendant, engaged the claimant under a NEC3 subcontract to design, supply and install a heating and cooling system.  The subcontract contained three conflicting sets of adjudication rules: the subcontract rules, the main contract rules and (potentially) the Scheme for Construction Contracts. 

The heating and cooling system broke down. Alleging defective design, the defendant served an adjudication notice asking RICS to nominate an adjudicator. The defendant's application did not specify which set of rules the application was made under although after an adjudicator was appointed he confirmed the subcontract rules applied. 

The claimant sought a declaration arguing that the adjudicator had no jurisdiction because there were two or more potentially applicable adjudication procedures. In any event, it argued that the main contract rules were the correct rules and so the adjudicator had not been appointed by the correct body.

The Court held in favour of the claimant ruling that the adjudicator had no jurisdiction to determine whether he had jurisdiction. A choice between two sets of adjudication rules would amount to such a determination if the choice made a material difference as to how he should be appointed, what rules he had to follow or the effect of his decision. In any event, the main contract rules applied and so the adjudicator was appointed under the wrong rules. However, even if the subcontract rules did apply, the adjudicator still lacked jurisdiction because he was appointed one day late and this deprived him of jurisdiction.

Lessons

  • Make sure the contract states what the parties want it to state.    
  • Don’t be blinded by boilerplate. Read the contract carefully and if it incorporates terms from other contracts, check what those terms are. Chances are there may well be some kind of overlap particularly in the boilerplate provisions.