Eurocom Ltd v Siemens plc (TCC - 7.11.2014)
The referring partys claims consultants naming of individuals as potentially having a conflict of interest in the RICSs application form for the nomination of an adjudicator constituted a fraudulent misrepresentation which deprived the adjudicator of jurisdiction
7 November, 2014
EUROCOM LTD v SIEMENS PLC
Technology and Construction Court
7th November 2014
Disputes arose between the contractor and the sub-contractor which the sub-contractor referred to adjudication on two separate occasions. When the sub-contractor’s claims consultant served a notice of adjudication to begin the second adjudication, its representative completed the RICS’s application for the nomination of an adjudicator form. In answer to the question "Are there any Adjudicators who would have a conflict of interest in this case?" the representative named several individuals, including the adjudicator in the first adjudication.
Ramsey J held that: (i) The sub-contractor’s claims consultant’s answer to this question constituted a fraudulent misrepresentation (ii) The contractor in consequence of that fraudulent misrepresentation had established a strong prima facie case that the nomination of the adjudicator in the second adjudication was invalid and the adjudicator was therefore not properly appointed and did not have jurisdiction (iii) That prima facie case was sufficiently strong for it to have real prospects of successfully defending the claim made by the sub-contractor to enforce the adjudicator's decision in its favour and (iv) The sub-contractor’s application for summary judgment to enforce the decision should therefore be rejected.
Ramsey J stated that the false statement was (i) material (ii) made in the context of a process by which an adjudicator had to be nominated by an impartial adjudicator nominating body and (iii) made improperly to eliminate candidates on the basis they had a conflict of interest when they had no such conflict. Where, as here, a party puts forward some names and seeks to exclude other names on the false basis that there was a conflict of interest, the likely outcome is that those people would be wrongly eliminated from the pool of potential adjudicators, thus improperly limiting the pool. Despite the possibility that the adjudicator appointed would have been appointed in any event, the fact that he was appointed after an application which improperly limited the pool of adjudicators was sufficient in itself to provide sufficient causation between the fraudulent representation and the process of appointment to defeat an application for summary judgment. The fraudulent misrepresentation invalidated the process of appointment and make the appointment a nullity so that the adjudicator did not have jurisdiction.