The courts’ rigorous approach to the issue of enforcing adjudicator’s awards - sanctioned by the Court of Appeal in Carillion Construction Limited v Davenport Royal Dockyard [2005] EWCA Civ 1358 - is well known. Yet there are rare exceptions, when a court will not enforce an adjudicator’s award. The following case is interesting because the Court of Appeal had no doubt that one of these rare exceptions applied.

Lead Technical Services Limited v CMS Medical Limited [2007] EWCA Civ 316

The employer and the engineer entered into an agreement in 2002 in relation to the provision of services. The parties subsequently entered into a signed deed of appointment in 2003, under which it was expressly stated that the Technology and Construction Solicitors’ Association (“TeCSA”) Rules should apply in relation to any adjudication.

The engineer referred a dispute in relation to fees under its appointment to adjudication. The adjudicator issued a decision in favour of the engineer and the engineer obtained summary judgment to enforce that award. The employer appealed.

The arguments against enforcing the adjudicator’s decision

The employer argued that the adjudicator’s decision should not be enforced since:

  • the adjudicator was appointed by the ICE and not, as the deed of appointment provided, by TeCSA; and
  • there was no agreement ‘in writing’ under section 107 of the Construction Act since the parties had agreed orally that the engineer’s fees would be capped at £20,000.

The Court of Appeal’s analysis

The Court of Appeal stated that an adjudicator could not act where there was a real prospect, based on cogent grounds, of establishing that the adjudicator had acted without jurisdiction.

This was the position here for the following reasons:

  • The existence of the deed of appointment meant that the adjudicator had no jurisdiction (having been appointed by the wrong appointing body).
  • The evidence of an oral agreement to cap the engineer’s fees meant that the contractual relationship between the parties was partly in writing and partly oral. This meant that there was no agreement ‘in writing’ as required under section 107 of the Construction Act. Part II of the Construction Act (setting out the provisions for adjudication) did not therefore apply.

It would be wrong for the court to enforce the adjudicator’s decision.

Editors’ comments

There have been a number of cases regarding section 107 of the Construction Act, and the need for agreements to be ‘in writing’ in order for the adjudication provisions set out in Part II of the Construction Act to apply. The key issue - which has been the subject of conflicting judicial dicta in the Court of Appeal in RJT Consulting Engineers v DM Engineering (Northern Ireland) 2002 BLR 217 - is whether, under section 107, all or only all material terms need to be in writing.

It would have been interesting if, in this case, the Court of Appeal had been required to address this issue. However, since the adjudicator clearly had no jurisdiction (having been appointed by the wrong nominating body) the Court of Appeal did not need to, and did not, address this issue.