It is commonly accepted that an adjudicator does not have jurisdiction to hear a dispute which is the same or substantially the same as a dispute which has previously been adjudicated.
The case of Hitachi Zosen Inova v John Sisk & Sons Ltd [2019] EWHC 495 (TCC) confirms that what is important to look at is what the previous adjudicator actually decided –not what he/she was asked to decide – to determine whether there is jurisdiction for a later adjudication.
In Hitachi v John Sisk the court was asked to decide whether the question asked in the eighth adjudication between the parties was the same or substantially the same question as had been answered in the second adjudication.
- Sisk was entitled to all reasonable and unavoidable additional direct cost and expense incurred based upon the actual cost and expense ‘substantiated by contemporary records and audits of [Sisk's] books of account’ or, in Hitachi's absolute discretion, any suitable relevant rates or prices used by Sisk for agreeing the contract price. Sisk was required to notify Hitachi of its intention to make a claim within five days and provide detailed evidence 15 days later (by all accounts a very short timescale to provide substantiation for a complicated variation). Hitachi was entitled to request additional information; if Sisk did not comply with such a request it would not be entitled to additional cost and expense.
- Hitachi was required to determine the adjustment to the contract price “acting reasonably in the circumstances at the time.”
- The contract provided that if an adjudicator's decision was not referred to court within 10 business days it would become final and binding.
The second adjudication
In the second adjudication Sisk claimed for, among other items, Event 1176 in the sum of £1,092,497.45. From the pleadings it was clear that Sisk was asking the adjudicator to evaluate Event 1176 in the sum claimed or such other sum as he found to be proved. However, as set out below, that is not what the adjudicator decided as he considered that he did not have enough information to do so.
The adjudication decision stated “In very many cases, however, the detail provided both in Application 6 and Payment Notice 6 falls short of that required by clause 30.1 and in such situations I have been unable to conclude a valuation for the purposes of Interim Application/Payment Notice 6. This is not to say that no value is due on a subsequent application, but rather, that none could be ascertained as due for this Application 6/Payment Notice 6.”
As such, the adjudicator decided that Event 1176 was a variation that required valuation, but insufficient information had been provided to let him value the claim.
In adjudication No 8 Sisk sought to recover sums for Event 1176. The adjudicator thought that whether or not Event 1176 was a Variation had already been decided, but that the valuation of Event 1176 had not yet been decided and was open to adjudication.
The court confirmed the general principle that an adjudicator does not have jurisdiction to decide a dispute which is the same – or substantially the same – as a dispute that has been decided in a prior adjudication.
Extension claim based on two letters
Whether a dispute had already been decided was a matter of fact and degree, and the court referred to Quietfield Ltd v Vascroft Construction Ltd [2006] EWHC 174 (TCC), which decided that a claim for an extension of time based on two letters was not the same or substantially the same as a defence to a claim for liquidated damages where a thought through document analysing the critical path was submitted.
Further, the court referred to Matthew Harding v Paice and Springhall [2015] EWCA Civ 123, where the emphasis was on what had been decided in the previous adjudication, not what had been referred.
The court indicated that what was required was an element of common sense. Although there are policy reasons against permitting a series of “serial” adjudications, this is not what Sisk were attempting to pursue. Accordingly, the court considered that Sisk should not be punished forever for underestimating the amount of substantiation required to support a substantial variation claim, the work for which had already been undertaken.
Related competencies include: Conflict avoidance, management and dispute resolution procedures, Contract practice