ADJUDICATION
Reservation of Position on Jurisdiction
Aedifice Partnership Ltd v Ashwin Shah [2010] CILL 2905 TCC
In a dispute over professional fees which the claimant surveyors referred to adjudication, the respondent client submitted that there was no adjudication agreement and that the adjudicator had no jurisdiction. The adjudicator indicated that he thought that he had jurisdiction and the respondent asked for his reasons. In enforcement proceedings by the claimant, the respondent successfully argued that he had reserved his position on jurisdiction and that his request for reasons did not constitute an agreement that the adjudicator had the power to decide his own jurisdiction.
Apparent Bias Allegation Fails
Fileturn Ltd v Royal Garden Hotel Ltd [2010 BLM August/September [2010] CILL 2912 and [2010] 131 Con LR 118.
The defendant failed to prevent enforcement of the adjudicator's decision on the grounds of bias by the adjudicator. The allegation was based on a pre-existing relationship between him and the claimant's claim consultants, of which the adjudicator had been a director between 2001 and 2004. The court found on the evidence that the reasonably fair-minded and informed observer would not conclude that an involvement more than 5 years previously would create an apparent bias.
Nature of Adjudicator's Decision
Rok Building Ltd v Celtic Composting Systems Ltd (No. 1) [2010] 130 Con LR 61 TCC
The defendant main contractor, Celtic, failed in its argument that the adjudicator's decision was merely declaratory of the position between the parties which could be reflected in future certification and payment procedures. The court in the words of the Con LR Editors "roundly dismissed this contention". The court held that the adjudicator's decision was by its nature directory, not declaratory, thus requiring the defendant to make a payment, even though there had been no stated obligation to pay within a specified time.
Natural Justice and Slip Rule
Rok Building Ltd v Celtic Composting Systems Ltd ((No 2) [2010] 130 Con LR 74 TCC
In a second adjudication in the above project, Celtic tried to resist enforcement proceedings on the ground that the adjudicator had failed to hold a meeting to test the parties' evidence, allowing Rok to misrepresent the financial position, comprising a breach of natural justice. The court held that it was not seriously arguable that it was a breach of natural justice not to hold a meeting. Neither was the adjudicator wrong in refusing to use the slip rule to correct alleged 'manifest errors'.
See Cleveland Bridge v Whessoe-Volker Stevin under Keating Chambers Reported Cases on the interpretation of the s.105(2)(c) exception to the HGCR Act adjudication provisions and refusal of enforcement of whole decision where exception partly applied.
Adjudicator's Finding on Jurisdiction Not Binding
Pilon Ltd v Breyer Group plc [2010] BLR 452 and [2010] 130 Con LR 90 TCC.
The adjudicator held that he had no jurisdiction to hear a set-off defence which derived from batches 1-25 of the project when the dispute referred to arbitration referred to batches 26-62. He therefore did not consider it. The judge, dismissing Pilon's application for summary judgment, held that the parties had not made an express or implied agreement to be bound by the adjudicator's ruling on his own jurisdiction. The adjudicator had breached the rules of natural justice by failing to consider a defence submitted and his decision would not be enforced.
See Yuanda (UK) v WW Gear under Keating Chambers Reported Cases on disapproval of Tolent clauses under s108 HGCR Act.
See William Hare v Shepherd Construction under Keating Chambers Reported Cases on the insolvency exception to the pay when paid provisions of the HGCR Act.
ARBITRATION AND DISPUTE RESOLUTION
Global Arbitration Review 2010 Vol. 5 Issue 4
contains the articles:
South Africa – is it time?
by Alison Ross
Russia – you have an award, but now
what?
by Victor Dumler, Egorov Puginsky Afanasiev, St. Petersburg
Journal of International Arbitration August 2010 Vol. 27
No. 4
contains the articles:
Pre-arbitral Urgent Relief: the new SCC Emergency
Arbitrator Rules
by Patricia Shaughnessy
Too many forums for investment disputes?
ICSID illustrations of parallel proceedings and
analysis
by Jamie Shookman
Is this a Great Leap Forward? A Comparative Review of
the Investor-State Arbitration Clause in the ASEAN-China Investment
Treaty: from BIT jurisprudential and practical
perspectives
by Wei Shin, City University of Hong Kong
Challenge to arbitrators: where a counsel and an
arbitrator share the same office – the Italian
perspective
by Pietro Ferrario
Learned lawyers attest: it is advantageous to be right
in (an Austrian) court?
by Barbara Helene Steindl, Brauneis Klauser Prändl, Vienna
Arbitration Law Monthly Vol. 10 No. 8 September
2010
contains the following:
Anti-suit injunctions: Conditions for grant
on Midgulf International v Groupe
Chimique
Contractual time limits: extension of time
on SOS Corporacion Alimentaria v Inerco
Trade
Serious irregularity: failure to deal with all
issues
on Buyuk Camlica v Progress Bulk
Carriers
The Commercial Litigation Journal No. 33
September/October 2010
contains the articles:
Settlement: what's in an offer?
by Matt McCahearty, MacFarlanes
(on Part 36 offers)
Product liability: the end of the decade
by Hugh Preston, Bedford Row
Jurisdiction: the litigation offside rule
by Andrew Horrocks and Rowena Lewis, Barlow Lyde &
Gilbert
(on Brussels Convention and Lugano Convention)
Privilege: circumstantial evidence
by Caroline Hadfield and Edward Coulson, Davies Arnold Cooper
Arbitration: recession proof or another casualty of the
global credit crunch?
by Sarah Walker, Boey Swee Siang and Luke Ryan, Bird &
Bird
(on insolvency during arbitration)
Limitation: trust me
by Shantanu Majumdar, Radcliffe Chambers
(on limitation in relation to fiduciary duties)
Block exemption: competition law issues in commercial
contracts
by Simon Dodd, Lawrence Graham
International Construction Law Review Vol. 27 Part 4
October 2010
contains the articles:
The availability of treaty arbitration in
construction
by John Uff QC, Keating Chambers and Alexander Uff
An annotated commentary on the 2010 Revised IBA Rules of
Evidence for International Arbitration
by Nathan O'Malley, Conway & Partners, Rotterdam
Arbitration Law Monthly Vol. 10 No. 10 November
2010
contains the articles:
Stay of judicial proceedings
on Billa v Nazir (refusal of stay of
proceedings for arbitration).
Enforcement of arbitration awards
on HJ Heinz v EFL Inc. (failure
to overturn Hungarian award for fraud).
Enforcement of arbitral awards: challenge to the
award
on Continental Transfert Technique v
Nigeria
Arbitrators: qualifications
on Jivraj v Hashwani (Court of
Appeal reversal on specified religious background).
Arbitrability: insolvency provisions
on Petroprod v Larsen Oil and Gas in the
Singapore High Court (dispute not arbitrable as raising public
interest issues).
Arbitration: the Chartered Institute of Arbitrators
Journal Vol 76 No 4 November 2010
contains the following articles in a special Ireland
issue.
The (Irish) Arbitration Act 2010
by Nael Bunni
An arbitration in Dublin: some practical issues
by Arran Dowling-Hussey, Irish Bar.
The courts and Alternative Dispute
Resolution
by Roderick Murphy, Irish High Court.
A view from the Bar: Arbitration in Ireland
2010
by Ercus Stewart, Irish Bar
Statutory adjudication for Ireland
by Anthony Hussey.
The role of Engineers Ireland in dispute
resolution
by Ciaran Fahy
Arbitration or the Commercial Court? End-Game resolution
of intellectual property disputes in Ireland
by James Bridgeman, Irish Bar.
Dispute resolution provisions in the Irish Public Works
Contract
by Roy Sherlock
Is Alternative Dispute Resolution suitable for
procurement disputes?
by Edward Quigg, Quigg Golden, Dublin.
Keeping sports out of the courts: the use of Alternative
Dispute Resolution in the Irish courts
by Jack Anderson, Queen's University, Belfast.
Incorporation of arbitration clauses
revisited
by Andrew Tweeddale, Corbett & Co. and Keren Tweeddale, South
Bank University.
The proper law of an arbitration
agreement
by Matthew Parish, Akin Gump, Strauss Hauer & Feld, Geneva.
The financial crisis: arbitration as a viable option for
European financial institutions
by Susan Kratzsch, Thűmmel Schűitze,
Stuggart.
Do Dispute Review Boards trump Dispute Adjudication
Boards in creating more successful construction
projects?
by Derek Griffiths
The 'reasonable man' in international
arbitration
by James Hope, Advokatfirman Vinge, Stockholm.
CONSTRUCTION AND ENGINEERING CONTRACT DISPUTES LAW
Utmost Good Faith and Reasonable Endeavours
CPC Group v Qatari Diar Real Estate Investment
Co. [2010] CILL 2908 Ch. Div
The Sale and Purchase Agreement on the Chelsea Barracks
site contained obligations on Qatari Diar, as joint venture
partners of CPC, to use "reasonable endeavours". The
court was required to consider the meaning of the expression, when
modified by "commercially prudent endeavours". A party
need not subordinate its own financial interests to obtaining an
objective in order to achieve that. The court thought it difficult
to see how there could be a breach of the duty of good faith
without showing bad faith.
Concurrent Liability and Collateral Warranty
How Engineering Services Ltd v Southern Insulation
(Medway) Ltd [2010] BLM August/ September 2010
How had sub-sub-contracted pipework to Southern and
brought a negligence claim against it for breach of duty in the way
it was insulated, alleging a concurrent duty of care in tort.
Southern sought to strike out the claim as having no reasonable
prospect of showing a concurrent duty of care to protect How from
economic loss. However, it was known that collateral warranties
were routinely provided, even if it was not specifically known that
How had provided them to a particular party. How could thus recover
from Southern losses paid out under its liability and
Southern's strike-out attempt failed.
Construction Law Vol. 21 Issue 8 October 2010
contains the following articles:
Equitable set-off without the headache
by David Friedman QC, 4 Pump Court
City Inn revisited
by Lindy Patterson, Dundas & Wilson
Experts' immunity from suit under
threat
by Paul Scott, HJB Gateley Wareing
Insurers raise the bar
by John D. Wright, JD Risk Associates
(on limitation and the Latent Damage Act).
Keep it simple
by Edward Freeman, Clyde & Co
(on "without prejudice" negotiations).
Implication of Terms Refused
Chantry Estates (Southeast) Ltd v Anderson [2010] 130 Con LR 11 CA
The appellant vendors failed in their contention that a term should be implied into an option for the purchase of a development site preventing the respondent purchasers from extending the option by delaying the process of obtaining planning permission. The CA held that it was not necessary to imply such a term, even though it was arguably a bad deal.
Causation and Lost Profit
Aldgate Construction Co. Ltd v Unibar Plumbing and Heating Ltd [2010] 130 Con LR 190
This case concerns the amount of damages claim made by the developer against a contractor whose admitted breach of contract caused a fire at a house which was being renovated. The developer, Aldgate, succeeded in claiming lost profits in respect of developments which it would have carried out during the period when it was prevented from operating because of the fire. The Con LR editors note the judge's "robust treatment" of Unibar's attempt to argue a break in the chain of causation as a result of Aldgate's changed development strategy.
Common sense wins out
by Lindy Patterson, Dundas & Wilson (on
City Inn v Shepherd Construction).
Note: now Lindy Patterson QC
Part 36 offers: some recent issues
by James Pratt, Pinsent Masons.
Unwritten rules
by David Owens, Clyde & Co.
(on contracts in writing).
CONTRACT AND PROCUREMENT LAW
Battle of Forms
GHSP Inc. v AB Electronics Ltd [2010] BLM
August/September and CILL [2010] 2915 TCC
The case concerned a contract for motor vehicle parts, which had
been found to be defective. The parties had exchanged their
standard terms of contract but neither had been executed. The
defendant wished to rely on an exclusion clause in its own standard
terms purporting to exclude liability for consequential loss. The
court held that neither set of standard terms had been incorporated
and that the terms would be implied, specifically from the Sale of
Goods Act.
Construction Newsletter September/ October 2010
contains the articles:
New EU Directive on the energy performance of
buildings
by Noel Butcher, Stephenson Harwood
New developments in liquidated damages
by Chris Hoar, Foot Anstey
Construction Law Vol. 21 Issue 8 October 2010
contains the articles:
New way of showing changes needed
by Michael Phipps, Thurston Consultants (on JCT 2005 Revisions 1
and 2)
New procurement routes of little benefit
by Prof. Peter Hibberd, Joint Contracts Tribunal
Sub-contracting – risks and
opportunities
by Zac Spyrou, Pinsent Masons
International Construction Law Review Vol. 27 Part 4
October 2010
contains the articles:
PPPs in Egypt
by Said Hanafi Khaled El Dardiry, Orascom
Termination for convenience clauses – a shield
or a sword in times of economic downturn?
by Martin Hirst
Is it the correct time for an ASEAN Standard Form of
Building and Construction Contract?
by Philip Chan and Asanga Gunawansa, National University of
Singapore
On Demand Guarantees
Rainy Sky SA v Kookmin Bank [2010] 130 Con LR 19 CA
The Commercial Court decision was reversed by a majority of the Court of Appeal in this shipbuilding contract case. The defendant bank was held to be obliged to pay the claimants under the terms of an advance payment bond "on first written demand" and the first instance judge held that the bank could not defend the claim by reference to absence of breach of the underlying contract. However, the CA focussed on the wording "All such sums due to you under the Contract". The contractor had become subject to a 'debt work out procedure' but this did not offer the owner a remedy and so was not something for which the bank was liable under the bond. The Con LR Editors welcome this as a return to "a black letter legal approach to construction" while noting that it may not find favour with the Supreme Court, if Chartbrook v Persimmon was an indication.
Construction Law Vol 21 No 9 November 2010
contains the following articles:
Read properly and live happily ever after
by Michael Phipps, Thurston Consultants, (on the JCT Minor
Works Contract)
Tolent clauses fetter removed
by Gurbinder Grewal, HBJ Gateley Wareing
(on Yuanda v WW Gear: Gideon Scott
Holland).
A fresh breeze or choppy waters
by Vijay Bange, Trowers & Hamlins
(on replacement of British Standards by Eurocodes).
NEC 3: judicial scrutiny lies ahead
by Mike Barlow, MacRoberts.
The joint names jungle
by John D. Wright, TD Risk Associates
(on joint names insurance clauses).
GENERAL AND PROFESSIONAL NEGLIGENCE
Consequential Loss
Network Rail Infrastructure Ltd v Conarken Group
Ltd [2010] BLM August September TCC
Following rail incidents caused by the defendants'
lorry drivers, the claimant rail track company sued in negligence,
trespass and nuisance. The court held that demonstrably
consequential losses suffered by the claimant could include
compensation, including loss of profit, payable to train operating
companies by the claimants under contract, provided it was closely
associated with the physical damage suffered and the repair
work.
Economic Loss in Tort of Negligence
Linklaters Business Services v Sir Robert McAlpine Ltd [2010] 130 Con LR 111 TCC
The case concerns the possible liability of a subcontractor directly to the employer in respect of economic loss caused by negligence. Damage had occurred allegedly because of defective insulation of chilled water pipes. The Con LR editors note that there are 3 categories of situation where a duty of care might be alleged by an owner: i) where subcontractor's own subcontract work fails; ii) where subcontractor's work damages something outside the works and iii) where subcontractor's work damages another subcontractor's work in another part of the building. The third category, where there is little case law, is the basis of the argument in this case and explains its importance. In the result, the court decided that there was far too much uncertainty to allow summary judgment or a strike out application. It was apparent from that the 'complex structure' theory still has potential relevance in such cases.
PRACTICE AND PROCEDURE
In-House Lawyers Not Privileged
Akzo Nobel Chemicals v European Commission
C-550/07 14 September 2010
The court followed the opinion of the Advocate General
that legal advice from an in-house lawyer in competition law
proceedings would not attract legal professional privilege nor any
related protection.
Order for Sale
Packman Lucas Ltd v Mentmore Towers Ltd [2010] BLR 465 TCC
Although the court was not persuaded that a sale of a large and expensive property should never be ordered to pay a comparatively modest judgment debt, it deferred making an order for sale because a sale was said to be imminent. It warned that the order might be made if the sale fell through.
Equitable Set-Off
Geldof Metaal Constructie v Simon Carves Ltd [2010] BLR 401 and [2010] 130 Con LR 37 CA
The Court of Appeal allowed the appeal by Simon Carves, the main contractor, against the TCC's decision in favour of Geldof, the sub-contract supplier. Simon Carves had been held not to be entitled to set-off against sums owed to Geldof under the supply contract an unliquidated but provisionally quantified sum for damages for repudiation of the installation contract. The CA provided useful clarification of the test to be applied in such cases. The Con LR editors describe the 2 elements of the test as "the requirement for a close connection between the claim and cross claim" and "the functional requirement that the court should be satisfied that it would be unjust to enforce the claim without taking into account the cross-claim". Geldof had themselves linked the two contracts by insisting that the supply contract invoices be paid before they would return to the installation work, so it would be unjust to enforce payment without taking into account the cross-claim.
KEATING CHAMBERS REPORTED CASES
William Hare Ltd v Shepherd Construction Ltd [2010] Con LR 1 CA
The Court of Appeal dismissed the appeal from the TCC in
deciding that a pay when paid clause could not be brought within
the insolvency exception, because the contract had not been updated
to reflect the change in the statutory definition of insolvency.
The Con LR editors note that the CA held that it was "not open
to Shepherd to argue that there was a lack of clarity in a
provision that it had drafted which relieved it from
liability". The onus is upon the party seeking to rely on its
own clause to get it right.
Stephen Furst QC
Alexander Nissen QC
Krista Lee
Yuanda (UK) Co. Ltd v WW Gear Construction Ltd [2010] BLR 435 and [2010] 130 Con LR 133 TCC
The adjudication provisions under a trade contract on a luxury
London hotel project were an amended version of the TecSA Rules,
making Yuanda liable for all costs in the adjudication, whatever
the outcome. This was held to be not unreasonable for UCTA purposes
nor void for uncertainty, but it did fail to comply with the
requirements of s.108 HGCR Act and so would be replaced by the
Scheme. Bridgeway v Tolent clauses were disapproved. On
the Late Payment of Commercial Debts (Interest) Act, 0.5% above
base would be replaced by 8% above the reference rate.
Gideon Scott Holland
Cleveland Bridge (UK) Ltd v Whessoe-Volker Stevin JV [2010] BLR 415 TCC
Cleveland Bridge was engaged as contractor by the Joint Venture
for works on a LNG terminal at Milford Haven. Cleveland Bridge, the
claimant, issued an adjudication notice when their invoice was not
paid. The claimant sought to enforce the adjudicator's decision
in its favour, but the JV resisted summary judgment. The JV's
case was that a significant part of the work came under the
exception in section 105(2(c)(ii) of the HGCR Act, namely
"assembly, installation or demolition" of plant on a site
where "the primary activity is ... the production,
transmission, processing or bulk storage .,.. of ...gas".
Following the approach in North Midlands v Lenjes (Stephen
Furst QC), the court construed the provision narrowly, meaning
that part of the works was excluded, although part included. The
adjudicator's decision had covered disputes over both included
and excluded works. The judge therefore refused to enforce the
whole decision, since it could not be dissected.
Adrian Williamson QC
Lucy Garrett
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