Axis M&E UK Ltd and Axis Plumbing New South Wales Pty Ltd v Multiplex Construction Europe Ltd [2019] EWHC 169 (TCC) (4 February 2019) (Mr Roger Ter Haar QC)

This case concerned the application and scope of the statutory adjudication slip rule inserted as part of the amendments to the HCGR Act in 1999. The rule, in section 108(3A) of the HCGR Act, requires a provision in the contract permitting an adjudicator to correct a decision ‘so as to remove a clerical or typographical error arising by accident or omission’. A similar requirement is contained in paragraph 22A of the Scheme for Construction Contracts.

The claimants, Axis M&E UK Ltd and Axis Plumbing New South Wales Pty Ltd (collectively Axis), were jointly engaged by the defendant main contractor, Multiplex Construction Europe Ltd (Multiplex), as the mechanical and electrical sub-contractor for a residential development in Kensington, London.

In an interim payment application Axis claimed about £7 million for variations. Multiplex’s payment notice reduced this to about £2.5 million and further deducted nearly £800,000 for contra charges. The dispute was referred by Axis to adjudication. The adjudication proceeded under the Scheme for Construction Contracts.

The adjudicator initially decided a negative balance due to Axis. However, this was because the adjudicator ‘double counted’ the amount for contra charges - which had already been taken into account by Multiplex in its payment notice (nearly £800,000) and again in the amount determined by the adjudicator (of about £250,000). Realising the error, and on the last date for the decision, the adjudicator issued an amended decision under the statutory slip rule resulting in payment to Axis of about £650,000.

Axis sought summary judgment. Multiplex resisted on the basis that the amended decision was beyond the scope of the statutory slip rule and the first decision therefore stood.

Mr Roger Ter Haar QC in the Technology and Construction Court found in favour of Axis. The Court emphasised the starting position is that adjudicators’ awards should be enforced save in exceptional circumstances. In reviewing the authorities, the Court also emphasised the distinction between correcting a decision to give effect to ‘first thoughts’ (which is within the scope of the slip rule and therefore permissible) and changing a decision to give effect to ‘second thoughts’ (which is beyond the rule and not permissible).

Here, the adjudicator’s first decision was properly confined to the dispute subject matter (variations and contra charges) and correcting the arithmetic for the amount due for contra charges to reflect the finding was giving effect to the adjudicator’s ‘first thoughts’.

The Court also relied on arbitration authorities to uphold the adjudicator’s ability to make necessary consequential amendments (in this case to interest and costs) so as to avoid an outcome which is ‘internally inconsistent’.

The Court’s decision is sensible and pragmatic and consistent with the overarching purpose of a presumption in favour of enforcing adjudicators’ decisions.