Implications of Second Adjudicator’s Reliance upon a First Adjudicator’s Decision – not in breach of natural justice

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Arcadis –v-  May & Baker trading as Sanofi [2013] EWHC 87, TCC Akenhead J

Facts

Sanofi had a brownfield site in Dagenham and employed Arcadis to carry out site remediation by soil washing and chemical treatment under NEC3.  In a first adjudication Arcadis pursued entitlement to payment for work in the zone referred to as “the Northern Boundary”.  In a second Adjudication Arcadis pursued payment issues in respect of work at the “Southern Boundary” before a second adjudicator.

The second Adjudicator ruled in favour of Arcadis and ordered payment of £480,000 which Sanofi refused to pay. In Sanofi’s defence to the subsequent application it raised “a kitchen sink of arguments.

HELD

  1. Sanofi maintained that the second Adjudicator was not entitled to rely upon elements of the first Adjudicator’s Decision and thereby had failed to hear the case fully, in breach of natural justice.  The Judge ruled that this was incorrect.  Sanofi was ordered to pay up.

Comment

a)             It was perfectly permissible of Arcadis to inform the second Adjudicator of the first Adjudicator’s Decision.  The first Adjudicator had to make his own mind up in respect of any peripheral issues in respect of any reasoning or arguments expressed by the first Adjudicator.

b)            Nevertheless he was free to adopt and agree with and adopt the reasoning of the first Adjudicator.

c)             Although adjudicators should not restrict their jurisdiction or act unfairly, the court will be VERY slow to find that this has happened.  The Judge stressed yet again the guidance of the Court of Appeal in Carillion –v- Devonport Royal Dockyard [2006] that “the need to have the right answer has been subordinated to the need to have an answer quickly“.

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