Air Design (Kent) Ltd V Deerglen (Jersey) Ltd
There was one 'main' sub-contract which was in effect varied by the parties with the introduction of additional works with the results that the adjudicator was entitled to rule on his jurisdiction and had the jurisdiction to decide all the disputes referred
23 December, 2008
The sub-contractor entered into a sub-contract for the "base build" works to be carried out in Jersey. The contractor later asked the sub-contractor to quote for tenant fit out works and some additional works and awarded them to it. The parties then entered into a supplementary agreement which dealt with payment terms in relation to all the sub-contractor's works. Disputes arose which the sub-contractor referred to adjudication on the basis that there was one contract varied by the supplementary agreement. The contractor contended that (i) There were four contracts (ii) Disputes relating to at least three if not four separate contracts were being sought to be referred to adjudication and (iii) The adjudicator had no jurisdiction over the disputes which arose under the contracts for the tenant fit out works and the additional works (and possibly for the supplementary agreement) since there was no adjudication clause in the contracts for those works and since the Construction Act did not apply to work carried out in Jersey unless there was such a clause. The adjudicator (i) rejected the contractor's contention (ii) decided that there was one contract (perhaps varied by the supplementary agreement) and (iii) awarded a specified sum to the sub-contractor, which it sought to enforce in the court. The contractor repeated its contention in the court enforcement proceedings. Akenhead J rejected the contractor's contention. There was one ?main? sub-contract which was in effect varied by the parties with the introduction of the tenant fit out and the additional works. The adjudicator acted within his jurisdiction when he ruled that that there was one ?main? sub-contract which was varied and decided that all the disputes fell within the original sub-contract as varied. The substantive decision-making process upon which the adjudicator had to embark in relation to the disputed claim put before him necessarily involved a consideration of whether there was more than one contract. Even if the adjudicator did not have such jurisdiction, his ruling that there was one ?main? sub-contract which was in effect varied by the parties was nevertheless correct. In particular, the supplementary agreement recognised in a way which had contractual effect that the parties were treating their contractual relationship as being in one "main contract" which was effectively varied.