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Contract Dispute Adjudicator Did Not Breach Natural Justice

Fencing on Vacant LandIn the context of a contractual dispute in respect of a land decontamination project, arguments that an adjudicator unlawfully restricted his own jurisdiction by treating himself as bound by another adjudicator’s previous decision have been rejected. There was nothing improper or contrary to the rules of natural justice in the adjudicator having regard to the earlier decision, the High Court ruled.

A landowner and a contractor, to whom it had agreed to pay £4.5 million for the decontaminating a former landfill site with a view to industrial development, found themselves in dispute after the project turned out to be more substantial than at first expected and suffered delays in completion.

The first adjudication related to the northern boundary of the site and resulted in findings in favour of the contractor. The second adjudication dealt with disputes in respect of the site’s southern boundary and the contractor’s arguments were again largely successful.

The landowner argued that the second adjudicator had taken an erroneously narrow view of his own jurisdiction in treating himself as bound by aspects of the first adjudicator’s determination. It was submitted that this had led to an appearance of bias on the part of the second adjudicator and that he had embarked on ‘a frolic of his own’ in assessing the quantum of the contractor’s claim.

However, ruling that the second adjudicator’s decision was valid and should be enforced, the court ruled that there was nothing inappropriate or unjust in the first adjudicator’s decision being placed before the second and the latter having had regard to its contents. The second adjudicator had fairly considered the landowner’s defence and no fair-minded and informed observer would have considered that he had been biased.