The Court of Session upheld an adjudicator’s decision and ordered Scottish Hydro Electric pay £1.8 million to Amey Power Services and UK Grid Solutions, following a delay in the delivery and installation of two transformers.
The court held an adjudicator does not need to expressly refer to a party’s arguments, provided it is shown that the adjudicator has generally considered the submissions made and decided those with reasons. This case demonstrates the increasing difficulty parties have in resisting enforcement of adjudicators’ decisions.
Background
The pursuers, Amey Power Services and UK Grid Solutions, formed a joint venture consortium called GE Amey JV, and contracted with Scottish Hydro Electric (SHE) to carry out works on an existing electricity substation on the outskirts of Fort Augustus, Scotland.
Scottish Hydro Electric was responsible for the delivery and installation of two transformers, which were delayed. GE Amey referred the matter to an adjudicator and requested an order for payment in respect of the increased cost. The adjudicator ordered a payment of £1,834,573.43, plus interest. SHE refused to comply which led to GE Amey raising a court enforcement action. GE Amey sought enforcement of the adjudicator’s decision.
SHE’s position was that the adjudicator failed in his decision to address and determine a material line of defence, which resulted in unfairness and a breach of natural justice. SHE had argued for a set-off against GE Amey’s adjudication claim, based on the SHE being entitled to liquidated damages for delay. SHE argued the adjudicator’s decision must make clear that the adjudicator has decided all essential issues put forward in the adjudication, so that the parties can understand what the adjudicator has decided and why.
GE Amey argued there was no need for each of SHE’s arguments to be specifically addressed given the route the adjudicator had followed in reaching his decision. The adjudicator had concluded GE Amey’s approach to compensation events was correct, which was to assess them prospectively at the time when the Project Manager had or ought to have instructed the contractor to submit a quotation. Overall, that dealt with the pursuers’ argument.
Decision
The court stated that the case law is clear: it is not necessary for an adjudicator’s decision to deal expressly with every argument made, provided arguments which are necessary and sufficient to establish the route to a decision are dealt with.
The court concluded the adjudicator’s decision had, overall, reasonably considered, decided upon, and provided reasons for the decision on the submissions made. The decision did not specifically refer to SHE’s set-off and liquidated damages argument, but it followed from the adjudicator’s consideration of matters and from the result, that no liquidated damages were due. The court therefore rejected SHE’s arguments and ordered payment to GE Amey in line with the adjudicator’s decision.
Key points to take away
The adjudicator does not need to expressly refer to each argument for the decision to be valid;
The decision should show the adjudicator has, overall, reasonably considered, decided upon, and provided reasons on the submissions made;
It is sufficient for the adjudicator’s decision to deal with arguments that are necessary to establish the route by which the decision has been reached; and
The courts are increasingly unwilling to unpick adjudicators’ decisions and reasoning.