Question a silly answer

An adjudicator makes a boob and the judge says he has answered the wrong question. But he hasn't: he's just answered the right question wrongly

"On the path to the ultimate answer, the adjudicator has to answer important sub-questions. Each is a potential error"

Thank goodness that C&B Scene Concept Design Limited vs Isobars – number 71 in our adjudication enforcement series – was not case number one. It is, how shall we say … not quite on all fours with the guidance given to the industry in previous cases. The judge would not oblige Isobars to obey the adjudicator's decision on the grounds of "excessive assumption of jurisdiction".

Put another way, the judge didn't agree with the adjudicator's interpretation of the contract, which was the basis of his decision. It was rather like asking Patrick the way to Kilkenny and him saying: "Well, I wouldn't start from here." The judge didn't like where the adjudicator started; he was now on the wrong road and "addressing himself to the wrong task", hence the "excessive assumption of jurisdiction".

Let me tell you the story. C&B Scene Concept Design had developed a unique cafe-bar for roll-out throughout England. Isobars engaged C&B to build the concept. The contract was JCT with Contractors' Design 1998. That document gives a choice for payment machinery. Guess what: they didn't choose. The Scheme for Construction Contracts filled the gap. The judge and the adjudicator are at one here. But now they part company.

This particular contract contains a special rule. I don't know of any other contracts that say this. It is that if the contractor sends in his interim claim it becomes "the amount due" if and only if the employer fails to reply with a different figure. By the way, some adjudicators have thought that this rule applied in loads of other contracts. It doesn't. Anyway, the adjudicator decided that since the employer had not raised a quarrel with C&B's interim application, it should be paid. Oh no, said the judge, all that falls away; that rule can't apply when the scheme is imported.

Hold on a moment. Let's doff our cap to the judge. Assume he is right. The 70 previous cases in this column have repeatedly told us that adjudicators' decisions, even if wrong, are binding until the case goes to arbitration or litigation. The only exception is if an adjudicator makes a decision on something outside their jurisdiction; then they can be challenged. Adjudicators have to mind their own business.

But, let me put this next bit gently: judges also have to mind their own business. The court can't revise or review an adjudicator's decision on the grounds of errors of fact or law. And if that is right, the adjudicator's decision as to the status of the contractors application for payment and whether it is payable is binding whether right or wrong. If he wrongly interpreted the contract, he hasn't answered the wrong question and gone outside his jurisdiction; he has answered the question wrongly.

In C&B Scene, the key issue of substance was whether or not an invoice was payable. That is the ultimate question. But when travelling the path to the ultimate answer, the adjudicator always has to answer important sub-questions on the way. Each is a fork in the road. Each fork is a potential error. But the answers are solely for the poor old adjudicator. No court has jurisdiction to investigate the trail, the forks, the route, then choose different answers.

Bouygues UK Limited vs Dahl-Jensen, case 12, offered the following guidance: "Where the adjudicator has gone outside his terms of reference, the court will not enforce his purported decision. This is not because it is unjust to enforce such a decision. It is because such decision is of no effect in law. In deciding whether a decision has been made outside an adjudicator's terms of reference, the court should give a fair, natural and sensible interpretation to the decision in the light of the disputes that are the subject of the reference.

"There will be some cases where it is clear that the adjudicator has decided an issue that was not referred to him or her. But in deciding whether the adjudicator has decided the wrong question rather than given a wrong answer to the right question, the court should bear in mind that the speedy nature of the adjudication process means that mistakes do occur, and it should guard against characterising a mistaken answer … as an excess of jurisdiction."

Readers are invited to forward recent judgments for reporting in this column (with full acknowledgement) to: Tony Bingham, 3 Paper Buildings, Temple, London EC4Y 7EU. DX:007I LDE

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