In circumstances where a court refuses to enforce an adjudicator’s decision due to jurisdiction issues, the parties are left back at square one with no resolution to their dispute and unrecoverable sums wasted. In a somewhat novel approach in a recent adjudication, we see an adjudicator giving an alternative finding to be used in the event that their primary finding is found to be unenforceable. This is an approach often taken by litigators in the courts where a number of alternative arguments are offered in the hope that one of them sways the judge. Could this same approach be encouraged in adjudication decisions with a view to reducing the number of unenforceable decisions? 

Global Switch Estates 1 Limited employed Sudlows Limited to undertake fit-out and installation works at Global Switch’s north data campus in London. A series of adjudications ensued, with the adjudicator (Five) in adjudication 5 deciding that Sudlows was entitled to an extension of time (EOT). In adjudication 6, the adjudicator (Six) was asked to decide a further EOT. Six therefore had to consider to what extent he was bound by the decision of Five. 

Conscious that his interpretation of Five’s decision may be wrong, Six asked the parties if they wanted him to consider the alternative position of what his decision would be if he was bound by adjudication 5 and if he was not. Global Switch did not provide confirmation, but Sudlows invited Six to proceed on that basis (though confirmed that it made no concessions regarding Six’s jurisdiction to do so). 

Six went on to make his decision based on the premise that he was bound by the findings and reasoning of Five in relation to the EOT. This resulted in a further EOT in favour of Sudlows, with corresponding loss and expense. However, in the event that Six was not in fact bound by the findings and reasoning of Five, Six gave an alternative decision which resulted in no further EOT for Sudlows, and sums due to Global Switch.

Mr Justice Waksman in the TCC¹ considered a number of authorities regarding the extent to which Five and Six were asked to consider the same or substantially the same dispute, ultimately deciding that what was referred in adjudications 5 and 6 was not the same or substantially so. As a result, Six was not bound by Five’s decision in relation to the earlier EOT. The judge therefore decided that Six’s primary decision awarding a further EOT was wrong.

The judge then had to consider the extent to which Six’s alternative decision could be enforced, addressing arguments on severance and obiter findings. Mr Justice Waksman found that Six had jurisdiction to make an alternative decision, commenting that: “It would be most unfortunate if, having utilised the time spent in Adjudication 6, it was then to be of entirely no use for enforcement purposes.” Mr Justice Waksman therefore enforced Six’s alternative decision. 

Where it is clear to an adjudicator that their jurisdiction could be challenged, it may be sensible for adjudicators to offer an alternative finding with a view to avoiding their decision being held as unenforceable. Whilst parties may be reluctant to agree to this course of action due to the inevitable increased costs of the adjudicator, these costs must be considered against fees that would be expended in finally resolving the dispute were the adjudicator’s decision found to be unenforceable. Alternative decisions may therefore be the answer to reducing the number of adjudication decisions which are not enforced by the courts, thus cementing adjudication as an effective method of ADR in the construction industry.

1. Sudlows Ltd v. Global Switch Estates 1 Ltd [2022] EWHC 3319 (TCC)

This article was first published by Construction Law journal on 3 March 2023 here.