Severing adjudicator’s decisions

The court has given guidance on the circumstances in which it will order the severance of an incorrect portion of an adjudicator’s decision.

Willow Corp Sarl v MTD Contractors Ltd [2019] EWHC 1591 (TCC)

The court has given guidance on the circumstances in which it will order the severance of an incorrect portion of an adjudicator’s decision. Even in cases where one dispute has been referred to adjudication, severance of an erroneous decision can be ordered where it is possible to identify a core nucleus of a decision that is untainted by the error and which can safely be enforced.

The general rule is that adjudication awards are enforceable

“…unless it is plain that the question which he has decided was not the question referred to him or the manner in which he has gone about his task is obviously unfair.” ( per Chadwick L.J. in Carillion Construction Ltd v. Devonport Royal Dockyard Ltd [2006] B.L.R. 15).

However, adjudicators have jurisdiction to make errors of fact and law. Usually such errors will not prevent an award from being enforced.

There has been a move towards severing the decisions of adjudicators even in circumstances where the adjudicator has exceeded his jurisdiction or acted unfairly and in breach of the rules of natural justice (Pilon Ltd v. Breyer Group plc [2010] EWHC 837 (TCC), and Cantillon Ltd v Urvasco Ltd [2008] EWHC 282 (TCC)).Although it can be difficult to remove a major flaw from the balance of a decision, the court will consider whether it is possible to safely enforce any aspect of a decision after the flawed reasoning has been removed. The correct part of an adjudicator’s decision should be enforced if it is unaffected by the error.

In this case, however, having rejected a contention that the adjudicator was in breach of the rules of natural justice, the judge went on to consider whether to sever that part of a decision that was tainted by a major error of law on the part of the adjudicator. The TCC held that the error of law was limited to the dismissal of the claim for liquidated damages and did not impact the rest of the decision. It was therefore possible to sever that part of the decision. The balance of the decision could be enforced.

This decision may well be controversial. It may open up awards to appeals on questions of law (and possibly fact, subject to the guidance given by the court in Hutton Construction Ltd v Wilson Properties (London) Ltd [2017] EWHC 517 (TCC)), a situation not envisaged by the Housing Grants, Construction and Regeneration Act 1996. It remains to be seen whether this decision will be followed.

If you have any questions or would like to know more about our update, please get in touch with Chris Doran, Partner on 020 7842 0831, or chris.doran@weightmans.com, or Camelia Nesari, Paralegal on 020 7822 1973, or camelia.nesari@weightmans.com.

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