Bouygues E&S Contracting UK Ltd v Vital Energi Utilities Ltd

[2014] CSOH 115

Bouygues sought to challenge an adjudicator’s decision that they should pay some £1.6 million to Vital. They raised a number of familiar arguments. First Bouygues said that before any payment order could be made, the adjudicator was required to decide whether and to what extent the works they carried out were defective. This the adjudicator had failed to do which prevented him from addressing an important part of the defence, namely that Vital had not proved that there was any defective workmanship. Vital said that the adjudicator was asked to quantify the costs of completion of the subcontract. This was what he did. It was immaterial whether the costs related to defective or incomplete work. The adjudicator decided that all of the awarded costs fell into one or other of those categories, and were supported by invoices. Lord Malcolm agreed. In essence, Bouygues was asking the court  to hold that the adjudicator had reached the wrong answer to their line of defence. It was not a breach of the rules of natural justice.

Bouygues then referred to advice the adjudicator sought and received from a consultant engineer who was asked to assess whether, on their face, the invoices, of which there were a large number, related to matters which needed to be carried out for the completion or rectification of the subcontract works.  Based on a sample of 10% of the invoices, the assessor said yes. The adjudicator accepted this advice. However, Bouygues said that they had not been given an opportunity to respond to this view. The adjudicator should have found out which invoices were considered by the assessor; the criteria adopted to select the 10%; and the basis on which it was thought that this sample was representative of the whole. This all went to “the heart of the adjudicator’s decision”. Vital noted that the assessor reviewed the same invoices which their expert relied upon. These had been provided to Bouygues  and to their expert. This was not a case where the adjudicator considered evidence of which the parties were unaware.

The Judge agreed. There was no unfairness in the adjudicator taking into account the assessor’s advice based on a sample of the invoices. He did not have to seek additional information, nor give the parties an opportunity for further comment. He had Bouygues’ views on the assessor’s sampling exercise in their response to the draft determination. He was entitled to proceed as he saw fit. This was another complaint as to the merits of the adjudicator’s decision. Particularly given that the assessor was an expert, the adjudicator was entitled to accept his advice without seeking more information. While Bouygues might disagree with his decision to rely on the assessor’s advice, there was nothing manifestly unfair in the way he went about his task.

Finally, Bouygues submitted that the parties should have had an opportunity to comment on the adjudicator’s intention to rely upon his own experience. Again, the Judge disagreed. It was common for a decision-maker to draw on his own experience without giving advance notice of this to the parties for their comment. There is nothing particularly unusual in this decision, but it does reinforce the robust approach the courts will take to adjudication enforcement decisions.