A main contractor obtained an adjudication award against a flooring subcontractor for the cost of replacing all the flooring installed by the subcontractor. The subcontractor resisted enforcement, claiming, amongst other things, that the adjudicator had acted outside his jurisdiction by deciding matters outside the scope of the referred dispute and, alternatively, that he had dealt with two disputes when only entitled to deal with one, because there were separate claims under the contract and at common law. So how strictly is a dispute identified or counted?
The Scottish court agreed with the English law view in Cantillon v Urvasco that the courts should not adopt an overly legalistic analysis of what the dispute between the parties is, but should determine in broad terms what is the disputed claim or assertion. If the courts took an overly legalistic approach, each subissue or individual point of difference between the parties could be taken as a dispute. That approach is unrealistic and not in accordance with commercial common sense. The scope of the dispute is what a reasonable person in the defender’s position, with the background knowledge available to the parties, would have understood the Notice of Adjudication to mean. The language in the Notice must be construed against that background and, in a case like this, the exchanges between the parties leading up to the issue of the Notice might assist in construing its terms, to determine the scope of the dispute.
The court ruled that the adjudicator had not acted outside his jurisdiction and that there was only one dispute. Again it agreed with the English law view that one dispute might encompass two or more causes of action, heads of claim or issues. In this case, the factual basis and the contractual standard were the same, the reality was that there was one dispute and it was artificial to seek to characterise it as involving two separate disputes.
Morgan Sindall Construction and Infrastructure Limited v Westcrowns Contracting Services Limited