Adjudications hatch from disputes. You can’t have one without the other. The parties will usually have argued unsuccessfully about their claims before taking them to adjudication. But what if the dispute referred is different from the previous disagreement?
A Scottish court had to deal with this (and other) issues. It said that a party is not entitled to instigate the adjudication provisions of the contract unless and until the dispute or difference has crystallised, and that is the position even if (as in the case) the dispute relates to a Final Certificate. If the dispute described in the Notice first arises at the moment the Notice is served, then the Notice is premature.
In the court’s opinion, when a party resists enforcement of an adjudicator’s award on the ground that the relevant dispute had not crystallised the court should adopt a robust, practical approach, analysing the circumstances prior to the notice of adjudication “with a commercial eye” (as stated in Lord Justice Coulson’s book on construction adjudication). An over legalistic analysis should be avoided. The court should seek to determine in broad terms whether a claim or assertion was made and whether or not it was rejected. It should discourage nitpicking comparison between the dispute described in the notice and the controversy which pre-dated the notice.
Even looking at the matter broadly, however, the claims in the Notice for extensions of time and loss and expense appeared to be of a different nature and order of magnitude to the previous disagreements about extensions of time, prolongation and loss and expense. No dispute in anything like those terms had crystallised before the Notice and, consequently, a very material part of the dispute described in the Notice had not crystallised before the Notice was served. One of the four objections to enforcement consequently succeeded but the effect on the adjudicator’s decision, and the possibility of severance, could not be decided by the court at the hearing.
Dickie & Moore Ltd v Ronald James McLeish and others at: