Lanes Group Plc V Galliford Try Infrastructure Ltd (No 2)
Technology and Construction Court
19 April 2011
The contractual adjudication agreement required the referring party to send to the adjudicator its referral documentation within two days of the adjudicator’s appointment. The contractor served a notice of adjudication, objected to the particular adjudicator appointed by the nominating body (on the ground that he was apparently biased against it), refused to serve its referral documentation, served a second notice of adjudication and secured the appointment of another (different) adjudicator. The sub-contractor applied for an injunction restraining the contractor from continuing or making further applications to adjudicate the dispute in question on the ground that the contractor was in repudiatory breach of the contractual adjudication agreement.
Akenhead J held that the contractor was in breach of the contractual adjudication agreement by deliberately failing to serve its referral within two days of the adjudicator being appointed but that this breach could not constitute a repudiatory breach of the agreement which was accepted by the sub-contractor, let alone a partial repudiatory breach. It was technically unnecessary to consider whether there actually was repudiatory conduct by the contractor because the concept of repudiation was simply inapplicable and even if it was applicable, there was no separable agreement to refer the specific dispute to adjudication which could be repudiated. This meant that the adjudication agreement in the sub-contract remained alive and capable of being used in other disputes and the sub-contractor was not entitled to an injunction restraining the contractor from continuing or making further applications to adjudicate the dispute in question. It also did not matter whether there was apparent bias on the part of the appointed adjudicator because (i) If there was such bias, the breach would be a nominal one which would attract little if any damages since it could not be expected that the parties should go through with the adjudication if such bias existed (ii) The parties would often incur substantial cost by pursuing adjudication when the adjudicator was apparently biased and (iii) The contractor challenged the adjudicator’s jurisdiction with the result that any damages might be small, if non-existent. There was, however, a respectable argument, albeit one not deployed in this case, that a referring party could only refer a given dispute once to adjudication provided that there was no valid ground for challenging the adjudicator's impartiality or jurisdiction or the enforceability of the adjudicator’s decision.