This case related to an application by the claimant (Jacobs) against the defendant (Skanska) for an injunction to restrain Skanska from proceeding with an adjudication, following Skanska’s withdrawal from an earlier adjudication in respect of the dispute between the parties.

Background

In February 2011, Skanska entered into a contract with Jacobs for the provision of design services relating to the design and replacement of street lighting in Lewisham and Croydon.

A dispute arose in relation to the adequacy of the design services provided by Jacobs and in February 2017 Skanska gave notice of its intention to refer the dispute to adjudication. Thereafter, the parties agreed the procedural rules and timetable for the adjudication.

The adjudication proceeded as might be expected at first: an adjudicator was appointed and the parties duly served referral and response documents (incurring substantial costs in the process). However, when the time came for Skanska to serve its Reply, the street lamp hit the pavement. Skanska's counsel became unavailable and consequently Skanska could not serve its reply within the agreed timescale.

Having failed to gain an extension of time from either Jacobs or the adjudicator, Skanska chose to withdraw its reference to adjudication and invited the adjudicator to resign.

Just over two months later, Skanska issued a fresh notice of intention to refer the same dispute (albeit slightly amended as one claim had been withdrawn) to a second adjudication.

Jacobs commenced Part 8 proceedings seeking to restrain Skanska's ability to continue the second adjudication as well as a declaration that its wasted costs of the first adjudication should be paid by Skanska.

The parties' arguments

Jacobs argued that Skanska's behaviour was unreasonable and oppressive and as such the court should grant an injunction under section 37 of the Senior Courts Act 1981.

Skanska's response was that there is no concept of abuse of process in an adjudication and a party has an unrestricted right to refer a dispute to adjudication at any time, which, in effect, "gives a party an unrestricted right to start, abandon and pursue serial adjudications in respect of the same dispute." It has already been established that the entitlement of a party to withdraw a claim persists even after the referral, regardless of the motive for the withdrawal, and that the party is not prevented from pursuing the claim in a later adjudication (Lanes Group plc v Galliford Try Infrastructure Ltd [2012] EWCA Civ 1617).

Decision

O'Farrell J held that, whilst there is nothing to stop a party from withdrawing from an adjudication and starting a new one and that the principle of abuse of process does not apply to adjudication, it would not always be open to a party to start and stop serial adjudications in respect of a claim. She held that:

"Subjecting a party to serial adjudications in respect of the same claim and requiring it to incur irrecoverable costs could amount to unreasonable and oppressive behaviour. It is a question of fact in each case as to whether the behaviour of the party to adjudication is found, on an objective basis, to be unreasonable and oppressive."

The key principle is that the behaviour must be both unreasonable and oppressive. Skanska's withdrawal was held to be unreasonable, however starting a second adjudication a mere two months later was not oppressive because the substance of Skanska's claims remained the same. This meant that Jacobs could "in large part" rely on its previous submissions. O'Farrell J held that:

"The inconvenience and additional costs suffered by Jacobs as a result of the second adjudication are not so severe or exceptional so as to warrant intervention by the courts by way of injunctive relief."

The specific facts of this case, where the parties had entered into an ad hoc agreement governing the procedure and timetable of the first adjudication after the notice of adjudication was given, meant that Jacobs was entitled to its wasted or additional costs caused by the withdrawal because Skanska had breached the parties' agreement by withdrawing.

This case reiterates the high threshold that needs to be reached in terms of unreasonable and oppressive behaviour before the courts will interfere with adjudication proceedings by way of injunctive relief. Whilst O'Farrell J did suggest that the court might intervene by way of injunctive relief where genuinely oppressive behaviour was evident, such an intervention would be justified only in the context of "severe or exceptional" costs.

Comment

The case is also another example of the court's appreciation that adjudication is a "rough and ready process" and that "the inherent unfairness in the adjudication process is justified by the advantage of speed and efficiency in obtaining a decision and balanced by the temporary effect of any decision."