[2010] EWHC 66 TCC

Celtic resisted ROK's attempts to enforce an adjudicator's decision on the grounds that the adjudicator acted unfairly and contrary to the rules of natural justice. The basic issue between the parties related to whether or not ROK, as it claimed, should be treated as having completed its subcontract works on 8 June 2009. If ROK was right, Celtic was required to release half of the retention moneys. ROK issued its adjudication notice on 2 October 2009. Following various submissions, including on the part of ROK a response by way of Scott Schedule to the complaints about defects made by Celtic, the parties agreed to give the adjudicator until 1 December 2009 to make his decision. The parties had served 15 witness statements between them. There was also discussion about a meeting, which did not happen. No complaint was made about that at the time. The adjudicator duly issued his decision on time.

Upon receipt of this decision, Celtic asked the adjudicator to correct it. These were some typos which the adjudicator amended. However Celtic also invited the adjudicator to make more substantive changes. As noted in a letter sent "in the pursuit of natural justice", these included the adjudicator being asked to clarify:

 (i) why he had made no reference to incomplete work, such as the absence of isolation joints, highlighted by Celtic, in the Decision.

(ii) the relevance of ROK’s own sub-contractors' work. If ROK, acknowledged that this was incomplete, did it accept that its own works were incomplete? What were the procedural requirements of rectifying defects retrospectively in accordance with the contract?

The adjudicator declined to consider these matters noting that under the slip rule he was only able to clarify any simple mistake or ambiguity. In the enforcement proceedings before Mr Justice Akenhead, Celtic argued that the adjudicator failed to apply the rules of natural justice on the basis that the weight of evidence was so overwhelming that no adjudicator acting fairly could reach a decision which he did. It said that as a matter of fact he simply got the maths wrong and must have ignored the clear evidence that ROK had in effect been paid almost all of that which was payable. This was compounded by the adjudicator's failure or unwillingness to use the contractual "slip rule" to put right the manifest errors in what he had done in the first version of his Decision. It was wrong, and unfair that he permitted ROK to serve its Scott Schedule and that he failed to call a meeting during the adjudication in effect to test the evidence.

The Judge noted that the TCC and the appellate courts will be very slow to characterise even glaringly obvious errors made by adjudicators acting within their jurisdiction as breaches or evidence of breaches of the rules of natural justice to which all adjudicators are subject. As for the slip rule, that relates to accidental errors or omissions. The Judge thought it was necessary to consider whether there had really been any mistakes, obvious or otherwise, made by the adjudicator. He noted that the payment and certification position was confused and unclear and that nothing simple was put before the adjudicator. In any event, the mere fact that there was an error, and the Judge was not saying that there was such an error, even if it was a glaring and serious error, should not affect the enforceability of the decision.

Further it was clear that the adjudicator had not acted contrary to the rules of natural justice. It was not a decision on the facts which no adjudicator acting fairly and reasonably could not have reached.

"He reviewed the evidence and arguments obviously with real care and attention. He, as many arbitrators and judges would do, applied significant weight to the contemporaneous documents and the inferences to be drawn about what the parties said and did or did not say and do at the time. Faced with witness evidence from each party which was diametrically opposed, no proper criticism can be made of him for doing so."

It is not necessary for adjudicators in their decisions to give reasons as to why they found some evidence compelling and other evidence not.

The fact that no meeting was held is not obvious evidence that the adjudicator failed to comply with the rules of natural justice. He was not obliged under the agreed adjudication rules to have a meeting, although he had the power to do so. There was no objection taken when the idea of having a meeting was dropped. As for the Scott Schedule, all that ROK was doing was setting out in a schedule for each of the principal defects or incomplete works relied upon and put forward by Celtic itself and putting its comments against each item. It would have been a breach of natural justice if the adjudicator had refused to allow ROK to respond to these assertions by Celtic. As for the slip rule, the Judge thought that it must be the adjudicator who is, and was here, best placed to determine whether there really is an "accidental" error or omission. The Judge noted that Celtic was not without remedies. If the adjudicator had made an error of the magnitude suggested. It could institute arbitration proceedings to produce a final correction on the state of account between the parties.