When drafting the dispute resolution procedures of a contract, the parties usually either name a specific adjudicator or state that the adjudicator should be nominated by one of the so-called Adjudicator Nominating Bodies (such as RICS or TeCSA). A recent case in the TCC has highlighted a lacuna in the law where parties can apply to ANBs for successive nominations until an adjudicator is appointed who they like.
In the case, the referring party (GTI) applied to the ICE for nomination of an adjudicator. Once nominated, GTI complained that the adjudicator was likely to be biased given his previous involvement acting on the other side of an acrimonious dispute. GTI then refused to participate any further in the adjudication and failed to serve their Referral Notice. A subsequent nomination to the ICE was then made. The respondent commenced proceedings seeking an injunction to restrain GTI from “continuing or making further applications to adjudicate a particular dispute”.
While ruling that the law permits “a referring party, time and again, if it did not ‘like’ the adjudicator nominated, to withhold service of the referral documentation so that the adjudication lapses, thus enabling it to seek a nomination which it does ‘like’”, Mr Justice Akenhead observed that “clearly that would involve what would be perceived by many as an abuse of the contractual and statutory process.”
The comments from Mr Justice Akenhead make it clear that this situation is unlikely to be allowed to persist for long. However, in the meantime, the safest course to avoid “adjudicator shopping” is to agree a named adjudicator, either at the outset when drafting the contract or when a dispute arises. If the latter, care should be taken when making unilateral contact with adjudicators in order to avoid complaints of bias (which, if successful, could render a decision unenforceable): see further here.
Guidance from the ANBs themselves that they would not be prepared to make successive nominations would also be welcomed.