A party wishing to refer a dispute to adjudication will generally be required by the terms of the construction contract to issue his notice of referral to the adjudicator selected by the prescribed nomination body. What happens when the referring party is unhappy with the adjudicator selected by the nominating body? Can he go through the nomination procedures as many times as he wants to until an adjudicator acceptable to him is selected?
These are the issues that were considered in the recent Technology and Construction Court decision of Lanes Group plc v Galliford Try Infrastructure Limited [2011].
Lanes Group Decision
In this case Galliford Try decided not to proceed to issue its notice of referral to an adjudicator nominated by the ICE. It would seem that this was because of exchanges between the solicitor for Galliford Try and the nominated adjudicator in a previous but unrelated adjudication. Galliford Try went through the nomination procedures again and an adjudicator acceptable to them was nominated.
Lanes sought an injunction to prevent the adjudication before the second adjudicator proceeding. They maintained that the failure to refer the dispute to the first adjudicator was a repudiation of the adjudication agreement that they accepted.
The Court did not accept that the adjudication agreement between the parties could be repudiated. This was because the contract was subject to the HGCRA. Accordingly, both parties had rights to refer any dispute at any time to adjudication and those rights cannot be lost by a party in some way repudiating the adjudication agreement.
While the repudiation argument was rejected, the Court nonetheless recognised that a failure to refer a dispute to the nominated adjudicator was a breach upon which a claim for damages or, in certain circumstances that were not defined, an application for an injunction could be founded.
Comment
What is of particular interest about this decision is that there is a clear recognition of what is referred to as "a lacuna in the HGCRA and in many standard form adjudication agreements" that allows a referring party to repeat the nomination procedures time and again until an adjudicator they like is nominated. Such behaviour may be perceived to be an abuse of the contractual and statutory process and the broad hint given is that the Courts will be keen to explore ways to prevent a referring party taking advantage of this "lacuna".
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